Jim O'Neill: Mint or Bric? Indonesia's drive is impressive as Russia's future dims

Economic View: Indonesians have a healthy preoccupation with the country's prospects

I spent last week in Indonesia, working on a series for BBC Radio about four of the world's most populous non-Bric emerging economies. The Bric countries – Brazil, Russia, India and China – are already closely watched. The group I'm studying for this project – let's call them the Mint economies – deserve no less attention. Mexico, Indonesia, Nigeria and Turkey all have very favourable demographics for at least the next 20 years, and their economic prospects are interesting.

Policymakers and thinkers in the Mint countries have often asked me why I left them out of that first classification. Indonesians made the point with particular force. Over the years, I've become accustomed to being told that the Bric countries should have been the Briics all along, or maybe even the Biics. Wasn't Indonesia's economic potential more compelling than Russia's? Despite the size of its relatively young population (a tremendous asset), I thought it unlikely that Indonesia would do enough on the economic-policy front to quickly realise that potential.

Now, meeting a diverse group of Indonesians – from the leading candidates for the 2014 presidential elections to shoppers in Jakarta's busy malls – I found a healthy preoccupation with the country's economic prospects. Could Indonesia do what's needed to lift the country's growth rate to 7 per cent or more, they were asking, or would it have to settle for "just" 5 per cent?

During the trip, I got word that Russia's Economy Minister, Alexei Ulyukayev, had suggested Russia was likely to grow by just 2.5 per cent a year over the next 20 years. How's that for contrasting ambitions? It made me wonder about the "R" all over again.

Certainly if Russia can only grow by 2.5 per cent this decade and beyond – far too little to maintain, let alone increase, its share of global output – that would be cause for concern. Not least because the country faces a growing demographic challenge as it moves toward 2050.

By that year, I and many others assume Russia's population will be closer to 100 million than today's 140 million. This worsening demographic drag will slow the economy further.

Russia's recent economic performance has undoubtedly been poor, and demography isn't the only problem. The country is far too dependent on oil and gas, afflicted with corruption, and lacking a credible legal framework for business. Even so, one wonders about the thinking behind Mr Ulyukayev's public pessimism. Until recently, Russian officials were determinedly upbeat. I recall in 2008 telling a group in St Petersburg that Russia would probably grow at 4 per cent a year or less through 2020, and that it was a mistake to assume ever-rising oil prices. As they made very clear, that wasn't what they wanted to hear. I suspect the new pessimism may be deliberately exaggerated. Maybe some influential policymakers are trying to build support for genuine reform by asking, see what happens if we don't act? Let's hope so.

Last week also saw the build-up to the much-anticipated meeting of China's leaders that began over the weekend. As I discuss in a new book, The Bric Road to Growth, China has a unique role in the group, not just because of its size but also because of its global economic reach and ambition. Nonetheless, its approach to development needs to be adjusted. Reports suggest that the government is considering new steps to create a more consumer-led economy, which is indeed necessary to lessen China's dependence on low-value exports and state-directed investment.

That will be a difficult transition to manage, but, by emerging-economy standards, China's leadership has a history of clear thinking about economic strategy – not to mention an unmatched record of success. The policy review coincides with new figures that continue to be somewhat better than expected. China is likely to grow by more than 7.5 per cent this year. If so, it will have beaten my expectations for growth since the start of this decade, the only Bric country to have done so.

By the end of this year, China's annual output will be more than $9trn – not far off 1.5 times the output of the other three Bric countries put together. If its leaders can deliver the reforms they've been discussing since the weekend, the country's rapid growth can be sustained. The global economy will continue to be transformed, and the other Bric and Mint economies will have an even more daunting standard against which to measure their performance.

Jim O'Neill, former chairman of Goldman Sachs Asset Management, is a Bloomberg View columnist. ©Bloomberg News

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003