BRIC theory is profoundly flawed?

The other day I had a very interesting discussion about BRICs with my friend. He was of the opinion that still a lot has to done to challenge the might of the US - and basically BRICs was a flawed theory . Here is a summary of the discussion.

For the starters BRICs theory was first introduced by Jim O’Neill, managing director of Goldman Sachs (investment bank) in 2003. The four BRIC countries are, Brazil, Russia, India and China. The Goldman Sach’s thesis contemplated that the economies of the BRICs are rapidly developing and by 2050 will eclipse most of the current richest countries of the world. This theory appears to be more of a wishful thinking rather than a hard-headed economic analysis. I do not see the fundamentals existing in any of the four mentioned economies, for a sustained economic expansion. These are certainly a group of exciting possibilities, besides Mexico, South Africa, South Korea, Vietnam and others. It is important to measure all these countries against some basic conditions and parameters. There are a lot of essential elements that made the Western World rich and powerful.

The first condition is a stable political environment. There can not be any long-term political stability without the consent of the governed. This consent must be reaffirmed periodically, not later than 4-6 years. When a government looses the confidence of the governed, there must be a peaceful transfer of power as and when necessary. A single party in power breeds corruption, cronyism and stalemate, no matter how well intentioned. No country in the world has sustained growth and prosperity over long periods of time, without a political consensus. How many of the BRIC countries would qualify in this test?

The second and probably the most important condition is the ‘Rule of Law’. Every country must have a written ‘Constitution’, giving equal protection to all it’s citizens under all circumstances. There must be an independent Judiciary, capable of interpreting the laws and providing justice to all including the foreigners and international agreements. The government must be accountable to the Courts and Justices. The Executive and the Legislator must stand by the law of the land. Without the rule of law and the transparency of justice, long term trade and agreements can not be sustained. Where do BRIC countries stand on this - particularly INDIA?

Another important condition for the ‘Emerging Economies’, is the development of Intellectual Infrastructure. We are not just talking about basic educational institutions, we are talking about the world-class universities and research laboratories. How many countries around the world have centers of excellence like Stanford, Harvard, MIT (Massachusetts Institute of Technology), Cambridge and Oxford? How many countries produce innovators like Bill Gates, Steve Jobs, Jerry Yang, Larry Page and Sergey Brin? Surely we do have Ratan Tata, Narayan Murthy, but they very few in number.Would Brazil, Russia, India and China, encourage students from around the world to come to their Universities and do research, find jobs, raise families and then become full citizens of their countries?

Immigration has been the foundation of an idea called “America”. The United States of America was founded by immigrants. Few would know that even their ‘Revolutionary War’ for independence was fought by Irish immigrants who were not even born in America. Hundreds of thousands of people come to The United States every year and over time become permanent residents and finally citizens of this country. It is the genius of these immigrants, that has fired the imagination of the US. Immigrants have rejuvenated the creative instincts of this ‘Economic Power House’. If BRIC countries and others around the world aspire to be the great powers of the 21st Century, they would have to learn to live with others, in peace and harmony.