BOSTON — The BRICs are growing restless.
For those of you who aren't globalization nerds, here's a quick primer:
The word "BRIC" has assumed almost mythical status since 2001, when Goldman Sachs economist Jim O'Neill penned a research paper titled "Building Better Economic BRICs."
In it, O'Neill coined the term, arguing that by 2050 the combined economies of Brazil, Russia, India and China (get it?) could eclipse the total economic output of the world's richest countries.
The bet was that these fast-growing, rapidly liberalizing places — which make up 40 percent of the world's population and a quarter of the the planet's land mass — would rule the future.
How? China and India would provide manufacturing and services, while Brazil and Russia would offer up the necessary raw materials.
The BRIC thesis has been challenged (and defended) ever since, but by and large it's been accepted by giant corporations and intrepid entrepreneurs alike. You can't shake a stick in China without smacking some corn-fed Midwesterner lost in the hutongs of Beijing, and it's hard to miss all those green-faced U.S. executives fighting off Delhi Belly.
But the BRIC mythology wasn't only a hit with Corporate America. It also resonated with savvy investors looking to make a fortune from this newly emerging economic order. Indeed, from 2001 to 2007, Russia's stock market rose 630 percent, India's surged 500 percent, Brazil's gained 370 percent and China's jumped 200 percent.
So despite the ongoing global financial crisis — which, to be sure, has damaged these high-flyers too — the BRICs have most definitely arrived. And, yes, they are here to stay.
That point has been reinforced again and again in recent days and weeks. And one thing is clear whether it's spoken in Mandarin, Russian, Hindi or Portuguese: the BRICs want a bigger say in how to manage the global economy.
Two weeks ago at the G20 finance minister's meeting in Horsham, England the BRIC countries — for the first time — released their own communique on how the global economic crisis should be managed. In it, they called for a bigger voice.
Then in what felt like a very public smackdown, Chinese Premier Wen Jiabao had this to say about Washington's profligate spending:
“We are very concerned about the economic developments in the U.S. economy. We have lent a huge amount of money to the United States and of course we’re concerned about the security of our assets and, to be honest, I am a little bit worried."
And this week China's Central bank governor Zhou Xiaochuan called on the International Monetary Fund to create a new "super-sovereign reserve currency," presumably to displace the dollar's key role.
Meanwhile, Russia's prime minister Vladamir Putin has long criticized U.S. dominance in economic (and political) affairs.
Brazil's president Luiz Inacio Lula da Silva complains loudly that the international system is skewed towards the U.S. He has pushed for a U.N. Security Council seat for Brazil.
So what's going on here?
Politics. Economics. And the inevitable tension that arises when great power shifts.
The global economic crisis — with its roots in the U.S. housing bubble, the lax regulation of Wall Street, the creation of indecipherable financial instruments that wiped out global markets, and the freewheeling brand of American capitalism that's come to be associated with villains like Bernard Madoff and the Financial Products Division of AIG — has weakened the U.S. capacity to lead.
The world is, of course, angry and America's image has taken a hit. As a result, Washington cannot now so easily bend other countries to its economic will. Note the quick response to U.S. Treasury Secretary Timothy Geithner's calls for governments to produce bigger economic stimulus packages. A "non," from France. "Nein," said Germany.
Leaders of the BRICs recognize this changing dynamic and are looking to exploit the weakness. It's not only business. It's politics, too.
The jockeying has been particularly intense ahead of the April 2 G20 leaders summit in London, when President Obama and the heads of the world's biggest economies meet to hash out a global rescue plan.
The BRICs want a bigger say in what goes down in London. Will they get it?
A lot will depend on President Obama's management style, which so far has been to bring together different sides and reconcile differences in a soothing, lawyerly fashion. A lot, too, will depend on the demands made by the BRICs.
How hard will China push for this idea of a "super reserve currency?" How worried is Beijing about U.S. spending and borrowing? How long can it continue to be America's top banker, as it gradually shifts its own economy from a reliance on exports to one that relies more on consumer spending?
Those are difficult questions. But the truth is China — for better or worse — is stuck with us. They hold our debt. We give them a market for their goods. That dynamic won't be changing anytime soon.
So don't pay too much attention to the recent braying of the BRICs. Their day is coming, no doubt. But that day isn't here.
(Read Seth Kugel on Brazil's (unofficial) economic forecast.)
Other recent Commerce columns by Thomas Mucha:
(Editor's note: this story was changed to correct the original definition of the BRICs)