Magazine article The Spectator

Diary

Magazine article The Spectator

Diary

Article excerpt

Sao Paolo

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.

Yet a trip to Brazil is a reminder that all is not entirely solidly built in Bricland.

According to the country's central bank, Brazil went into recession in the second half of last year. The gloom is palpable in Sao Paolo. 'There are two kinds of Brazilians, ' I am told. 'The depressed and the really depressed.' I can see part of the reason why. I have never endured worse traffic in all my life than the two journeys from and back to the airport. It does not surprise me that an increase in bus fares sparked riots last year. You might think that, with the World Cup due to start in just 15 weeks, and with the host country as the hot favourites, the mood would be more cheerful. The converse is true. More than one person I met here expressed the hope that Brazil would get knocked out - to increase the chance that the deeply unpopular President Dilma Rousseff would lose the election due later this year. Usually, the organisers of world cups worry most about the England fans. But visiting supporters will have their work cut out just getting to the matches on time. It may well be the locals who cause the crowd trouble.

No one here gives a hoot about the centenary of the first world war. That may be because, like the United States, Brazil did not enter the war until 1917. …

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