It was back in 2001 that my good friend Jim O’Neill of Goldman Sachs coined the acronym ‘Bric’, short for Brazil, Russia, India, China. These were the emerging markets that were going to surpass the developed economies. And so they have.
Well, nearly. I, too, am partial to a good acronym and it has always seemed to me very unfortunate that there isn’t a matching one for the four biggest established economies. According to the International Monetary Fund, these are currently the United States, Japan, Germany and the United Kingdom (based on last year’s GDP figures).
I therefore propose ‘Juugs’. The rise of the Brics and the fall of the Juugs has a good ring to it. According to one of the IMF’s measures — admittedly the one most favourable to emerging markets — the Brics have not quite overtaken the Juugs, but they will do within five years. The fact that their shares of global output are currently about the same (27 per cent compared with 31 per cent) is itself astonishing. Thirty years ago those shares were, respectively, 14 per cent and 45 per cent.
This is an extract from Niall Ferguson’s diary in this week’s Spectator.