Ten years ago this month, I published a paper titled The World Needs Better Economic Brics.
It was the first time I had used the term, which I coined to describe the group of countries comprising Brazil, Russia, India and China.
It is now clear the growth of these four countries has been even stronger than I envisaged in the paper. The Brics have become a household name in both business and culture, as well as forming a political grouping.
The 10th anniversary of that paper coincides with some tremendous concerns about the world economy, especially for the more developed economies. I remain optimistic that as the four emerging giants, and some others, continue to grow in size and wealth, their prosperity will not only bolster their role in the world, but also give the more challenged economies a chance for a better future.
The rise of the Bric nations will be good for them and the rest of us. Moreover, their continued rise suggests we may finally see some considerable improvements to the optimality of global policymaking and its institutions.
My 2001 paper had three main messages: First, I showed that if Brazil, Russia, India and China continued to experience their rapid growth rates, these Brics would become a much bigger element of the world economy by last year. In the more optimistic of the scenarios, I suggested their combined share of global GDP could rise from around 8 per cent to perhaps 14 per cent. In the event, by the end of this year, they will probably be close to about 20 per cent with their own GDP rising from around US$3 trillion (Dh11.01tn) to probably just beyond $13tn today. This represents about one-third of the total increase in global nominal GDP these past 10 years.
The Brics real growth rate of about 8 per cent helped power the world to an average growth rate of 3.5 per cent despite the immense problems of 2001 to 2002, 2008 and, of course, since. Without the Brics, world growth would have been closer to the disappointing 1.6 per cent achieved across the so-called developed world. As I often suggest to people, the Brics' combined $10tn increase effectively created between six or seven equivalents of a 2001 UK - or a whole new US economy.
As we look to this decade, the Bric countries' growth rates will probably slow, but their share of global GDP will almost definitively rise. China seems set to grow by 7 or 8 per cent as it deals with the many challenges it faces, but India might accelerate and finally achieve Chinese-style growth rates, especially if it persists with its new-found zeal for reform, as exhibited by the important decision to welcome foreign majority ownership of its retailing industries.
In a few years, the combined nominal GDP of the Bric countries will probably overtake those of the US and Europe.
Based on their likely growth, the second part of my 2001 paper argued the Brics needed to become more central to global economic policymaking. They remained outside for many years, which led them to set up their joint annual political meetings. It took the full-blown crisis of 2008 for the advanced countries to finally realise how central the Brics are to the modern world economy and the decision to place the Group of 20 leading and emerging economies at the centre of world policymaking was essentially a move to bring in the Brics. I argued back in 2001 that each of the Bric nations should join the US, Japan and the euro zone, and perhaps Canada and the UK, to be at the centre of a new group, perhaps a G9, or if the UK and Canada were excluded, a new G7.
The third idea in the 2001 paper suggested that, given they now shared a common currency, France, Italy and Germany should abandon their individual representation in global bodies and the G7, allowing for more effective global governance. What better way of demonstrating their true commitment to the European Monetary Union (EMU) than such a bold step of true leadership? As we have subsequently recently found, bold leadership from the EMU has not been present. Hopefully, the scale of the current crisis will drive Europe's leaders to such bolder steps.
Meanwhile, as the Bric countries continue to see their fortunes rise, they will offer more and more opportunities for the rest of us to improve living standards and prosperity.
For the world to continue growing despite the challenges facing many developed economies, we need the economic mortar of the Brics, and fortunately they have plenty of it.
(Jim O'Neill is chairman of Goldman Sachs Asset Management)