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
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions