The Western financial crisis means the fast-growing economies of Brazil, Russia, India and China (Bric) will grow their share of the world economy even faster than originally forecast, the founder of the four-nation Bric concept said.
The term Bric was coined by Wall Street bank Goldman Sachs to describe how the four rising economies are set to rival and probably overtake many of the West's leading economies over the next half century.
Jim O'Neill, the Goldman Sachs economist who coined the term in 2003, said the financial crisis that began in US mortgage markets was allowing the Bric countries to take a bigger share of world gross domestic product.
"On a relative basis it definitely allows the Bric to develop faster as they are going to take an even bigger share of GDP sooner," O'Neill told a news agency in an interview at an economic forum in Russia's former imperial capital of St Petersburg.
"This is a financial crisis of the West and we must not forget that of the world's six billion people most of them are not affected by this," he said. "I was in India four weeks ago and there were no signs of India being affected by all of this."
O'Neill, head of global economic research at Goldman, said China, India and Russia were actually growing faster than originally predicted by his research.
"Of the four Brics, Russia, China and India have all grown on average two per cent more than we suggested," he said. "It is a hell of a lot so they are now collectively 16 per cent of global GDP so it is all happening a lot quicker."
These countries have been seeking to form a political club to convert their growing economic power into greater geo-political clout.
Last month in the Russian city of Yekaterinburg, the four sought to formalise their club at the first stand-alone meeting of Bric foreign ministers.
"I would hope that Western leaders take note of that meeting and start to accelerate bringing them into the G8 club and the IMF because the world does not want a separate club just looking after the growing countries the same as it does not need an old club looking after the declining – it needs a better club involving them both," O'Neill said.
"I think that the lack of progress by the G8 and the Western leaders to change is really bad and is one of the biggest problems in the world today," he said.
O'Neill says the combined GDP of the Bric countries could overtake the combined economic might of the G7.
Russia not on investors' favourite list
Russia is one of the world's biggest economic success stories but it has been treated differently to other top emerging markets because of politics, a top Western banker said yesterday.
Michael Klein, chairman of one of Citigroup's four main divisions, said many investors did not view Russia like Brazil, India and China – the other emerging markets which with Russia make up the so-called "Bric" nations – term coined by a Goldman Sachs economist .
"While there is clearly a Bric definition, there is however one country that unfortunately is consistently viewed not from the Bric economic lens but with a political lens and that is Russia," he said.
"The Russian economy is largely invisible – when you have an export economy that is 85 per cent basic materials and not brands, not consumer goods, not food, not automotive, the high street and the main street do not understand the Russian economic power that has been achieved," Klein added.