Epiphanies from Jim O’Neill
The chairman of Goldman Sachs Asset Management talks BRICs.
The British-born guru of Goldman Sachs has long been ahead of the curve: As head of research back in 2001, he coined the acronym BRIC (Brazil, Russia, India, and China) to highlight the role of developing economies in world finance. But today, the term has taken on a life of its own, as much a symbol of the countries’ global political emergence as it is a sign of market dynamism.
When I came up with BRICs, I was looking for a thematic thing: 9/11 left a powerful impact in my mind just like everybody else’s. Below the horror, it told me that in order for globalization to thrive in the future, it had to become more complex, less U.S.-centric. I’d always been fascinated by China, which played a huge role in stopping the Asian crisis. And when I combined these things together and started to think about the world going forward, I thought this was going to be the next big thing. I had no idea it would be what it’s become.
It all happened faster than I estimated. It’s slightly scary how closely the rise of the BRICs has happened compared with what I said.
People used to accuse me of having Brazil there purely to have the acronym. In 2004 I gave a speech in Rio, and as I went up to the podium, the host whispered in my ear, "We all know the reason why Brazil is there.…"
It’s quite striking to me how little developed countries understand the power of the BRIC economies. Take Germany. Within another year, German trade with China will be as big as German trade with France. Virtually no European policymaker realizes that. China is not only transforming itself, but also the world.
Some people seem to think that the only thing I ever did in my life was BRICs. For 20 years before that I was more known as a foreign-exchange guy. The first thing I do when I wake up in the morning is I look at the euro-dollar exchange rate — it’s the world’s vegetable store.
People asked me in 1999 about how long the euro would exist. I said at the time there was zero probability of it collapsing in the first 20 years. I don’t think the probability is zero anymore.