“Over the past three years, conventional wisdom divided the world’s major economies into two basic groups – the Brics and the sicks,” notes a leading analyst:
The US and the EU were sick – struggling with high unemployment, low growth and frightening debts. By contrast the Brics (Brazil, Russia, India, China and, by some reckonings, South Africa) were much more dynamic. Investors, businessmen and western politicians made regular pilgrimages there, to gaze at the future.
“But now something odd is happening. The Brics are in trouble,” in part because “all five nations are finding that endemic corruption is eroding faith in their political systems, and imposing a tax on their economies,” writes the FT’s Gideon Rachman:
There is no straight line that links unrest at South African platinum mines to troubles at Chinese electronics factories, via a power cut in India, a protest in Moscow and a corruption probe in Brazil. Yet there are broad themes that link the troubles of the Brics. First, declarations of “decoupling” from the west were premature. ….Second, all the years of rapid growth have not brought political harmony to the Brics. One theme that I have come across repeatedly, visiting each of these countries – democracies and autocracies alike – is that popular rage against corruption is central to politics. That makes both politicians and investors nervous about potential instability.