A decade on, rise of BRICs shaped by September 11

Last Updated: Sunday, September 11, 2011 - 13:38

London: As his global teleconference broke up in disarray on September 11, 2001, a top economist at a US investment bank began to ponder what the attacks on the United States might tell him about the future shape of the world. His conclusions had little to do with Al Qaeda.

Jim O`Neill of Goldman Sachs had been at a meeting in the World Trade Center only two days before, and flew home to London just hours before airliners slammed into New York`s twin towers. About to become head of the bank`s global economics team, he was looking for a "big idea" to put a stamp on his leadership.

Soon, he had it: the decade after September 11 would be defined not by the world`s sole superpower or the war on terror but by the rise of the four biggest emerging market economies - China, Russia, India and Brazil. O`Neill nicknamed them the "BRICs" after the first letter of their names.

"I`ll never forget that day," O`Neill told Reuters. "It was right at the core of how I dreamt up the whole thing... Something clicked in my head that the lasting consequence of 9/11 had to be the end of American dominance of globalisation... that seems to be exactly what happened."

O`Neill, who now heads Goldman`s global asset management business, launched the BRIC phrase in a pamphlet published in November 2001. The numbers from the past decade suggest the trend he identified will resonate more in world history than the strikes and their aftermath.

When O`Neill dreamed up the BRIC acronym, the four big emerging powers made up eight percent of the world economy. The top five world economies were, in order, the United States, Japan, Germany, Britain and France.

Ten years later, the BRICs have grown faster than even O`Neill expected to constitute nearly 20 percent of the global economy. China is the world`s number two economic power, while Britain - the closest ally of the US in the decade-long war on terror -- has dropped out of the top five, overtaken by Brazil. India and Russia are not far behind.

Within days of the attacks on New York and Washington, the US had launched a costly and attention-sapping global "war on terror" and was plotting retaliation against not just Al Qaeda but also other members of what it saw as a wider "axis of evil", including Saddam Hussein`s Iraq.

At first sight, the US and its allies appear to have won their war. The Al-Qaeda network is badly damaged, Osama Bin Laden and other key leaders are dead and the group has not pulled off a major terror strike in the West for years.

What is less obvious is the cost of that apparent victory, both financially and diplomatically.

"For most of the first decade of the century, as the world economy gradually shifted its centre of gravity towards Asia, the United States was preoccupied with a mistaken war of choice in the Middle East," said Joseph Nye, a former US under-secretary of state and defence as well as ex-chair of the National Intelligence Council and now a Harvard professor of international relations.

US actions, he says, critically undermined its "soft power" in diplomacy, values and culture, while diverting and ultimately weakening its military and economic "hard power".

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First Published: Sunday, September 11, 2011 - 13:38

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