The Growth Map Kolkata , October 9 2012. Edition XXVI
Invest and Prosper
Chapter 9
Jim O’ Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries
including the US, the UK and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.

DO YOU
KNOW
WHAT
ARE
BRICs

In economics, BRIC is an acronym that refers to
the countries of Brazil, Russia, India and China

• The acronym was coined by Jim
O'Neill, global economist at Goldman
Sachs, in a 2001 paper entitled "Building
Better Global Economics”
• Goldman Sachs argues that the economic
potential of BRICs is such that they could
become among the four most dominant
economies by the year 2050

• 25% of the world's land coverage
• 40% of the world's population and
• Combined GDP of $18.486 trillion
• Embrace global capitalism
• China and India- suppliers of manufactured
goods and services
• Brazil and Russia -suppliers of raw materials.

GROWTH MARKET CONCEPT AT GOLDMAN SACHS.
WHY ARE WE NO MORE EMERGING MARKETS?

The Growth Map Kolkata , October 9 2012. Edition XXVI
Growth Market Concept
at Goldman Sachs
Jim O’ Neill’s Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7
countries including the US, the UK and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging
forces of Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer of the most compelling economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria of the most compelling
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies. economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that could have a BRIC-like
impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeriaof the most compelling economic concepts of our time.
He sets out the 'Next 11' concept for the set of fast-growing countries that could have a BRIC-like impact on the world
(Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria

Growth market concept of Goldman Sachs
• Growth market economies will be the driver of
the world economy in the coming decade.
• Goldman Sachs Asset Management (GSAM) has
adopted the term “Growth Markets,” believing
the traditional labels of “Developed” and
“Emerging” countries no longer reflect the
fundamental nature of the global economy
today.
• GSAM describes Growth Markets as any country
outside the developed world that is responsible
for at least 1% of global GDP.

WHY THE BRICS ARE NOT CONSIDERED
EMERGING MARKETS ANYMORE
• In 2001 and 2002, real GDP growth in large
emerging market economies will exceed that of
the G7.
• At end-2000, GDP in US$ on a PPP basis in BRICs
was about 23.3% of world GDP. On a current
GDP basis, BRIC share of world GDP is 8%.
• Using current GDP, China’s GDP is bigger than
that of Italy.
• Over the next 10 years, the weight of the BRICs
and especially China in world GDP will grow.

• World policymaking forums should be re-
organised and in particular, the G7 should be
adjusted to incorporate BRIC representatives.
• The results are startling. If things go right, in less
than 40 years, the BRICs economies together
could be larger than the G6 in US dollar terms.
By 2025they could account for over half the size
of the G6. Of the current G6, only the US and
Japan may be among the six largest economies
in US dollar terms in 2050.
• By 2050. The largest economies in the world (by
GDP) may no longer be the richest (by income
per capita).

• BRICs to increase their contribution to global
domestic demand through higher consumption.
• Real retail sales in the BRICs much better than in
the advanced economies over the past two
years. By 2010, the BRICs will contribute almost
half of global consumption growth.
• Two billion people could join the global middle
class by 2030, mainly from BRICs. China and India
also set to dominate infrastructure demand over
the next decade. Excellent opportunities for the
best positioned companies from DM & EM
markets. Two new ‘BRICs Nifty 50’ baskets to
help access this opportunity.

• Recently, BRICs have continued their climb up the
global rankings of economies by size, as measured
by US $ GDP.
• China moved past Japan to become the world’s
2nd largest economy. Brazil passed Spain and Italy
to become the 7th largest economy, and is now
fast approaching the UK. India and Russia both
jumped over Spain to move into 9th and 11th
positions, respectively.
• China and India have experienced the fastest
infrastructure growth rates. Russia hasmore
advanced infrastructure in place than the others
due to heavy investment during the Soviet era.

Investing in BRICs

The Growth Map Kolkata , October 9 2012. Edition XXVI
INDIA
Jim O’ Neill’s Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7
countries including the US, the UK and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging
forces of Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer of the most compelling economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria of the most compelling
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies. economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that could have a BRIC-like
impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeriaof the most compelling economic concepts of our time.
He sets out the 'Next 11' concept for the set of fast-growing countries that could have a BRIC-like impact on the world
(Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria

• INDIA is the greatest mystery among the
BRICs!!!
• We’re populous, resource-rich and
entrepreneurial.
• Its demographics are astonishing and its
economy is mostly driven by domestic
demand thus cushioning it from global turmoil.
• From being a provider of natural resources and
labor, INDIA now also has an affluent middle
class consumer market.
• India’s private entrepreneurship has been
instrumental in achieving 8–9% annual growth of
the economy in recent years.

• Private initiative led to IT sector
growth.
• The Right to Information Act is
increasing the transparency and
accountability of government
operations
• The MGNREGA Scheme is a
major step towards making
growth inclusive.
• India’s positive potential and
image overseas, makes Equity
market valuations very high

The Indian Billionaires are the face of the
economy outside which attracts a lot of
investments due to its self-sufficiency
image.

BUT THEN THE QUESTION ARISES WHAT IS STOPPING
INDIA FROM GROWING FULLY
• The scale of poverty is very high and India’s
federal structure does not allow for pan-India
policy making.
• INDIA’s literacy rates are by far the lowest.
• Many foreign investors feel INDIA is difficult to
break into.
• The slow Indian bureaucracy shuns away even
the potential investors like WALMART or TESCO.
• Indian household credit is only 8% of GDP;

SO WHAT IS NEEDED???
• Making the growth process more inclusive
and balanced
• Improving physical infrastructure
• Developing the agriculture sector
• Enhancing delivery of essential public
services, such as education and health, to
large parts of the population
• Reduce corruption!

• Financial sector reforms are also needed to
improve the intermediation of India’s large
private savings.
• The government also needs to raise social
spending in the areas of education, healthcare
and pensions
• There is also a need to improve the
investment structure

THE INDIAN CAPITAL MARKET SCENARIO
• The capital market in INDIA has also played its
own role in the development. The bond
market in INDIA is typically classified into
three categories---
• GOVERNMENT BOND MARKET----- 85%
• FINANCIAL BONDS--------------------- 10%
• CORPORATE MARKET----------------- 5%
• But the most underdeveloped part remains
the corporate debt.

• The non-uniform stamp duty prices and long
gestation have retarded the growth in this
sector.
• The lack of transparency around its capital
markets, and private lending in India makes it
impossible for public debt markets to develop
when the need for it is immense.

By 2016 the INDIAN
debt market, public or
private could reach $1.5
trillion. But for this to
happen at a faster pace
it needs to

• Lower the high disclosure requirements
• Improve the legal framework for contract
enforcement
• Lift restrictions on foreign investors
holding Indian corporate debt
• Develop better settlement and clearing
systems
• Most important of all INDIA needs to
decouple its debt market from its broader
economic goals

It is perhaps as
simple and as
difficult as this –
INDIA must wrestle
in so many areas to
change and
advance, because it
is such a complex
nation to lead and
govern and all its
issues come to only
one point- lack in
LEADERSHIP.

The Growth Map Kolkata , October 9 2012. Edition XXVI
BRAZIL
Jim O’ Neill’s Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7
countries including the US, the UK and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging
forces of Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC nations have experienced
significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred economic and social change, created new political
structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK and Japan would no longer of the most compelling economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that
be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria of the most compelling
urbanized and overflowing with raw materials and ambition - would overtake the largest Western economies. economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that could have a BRIC-like
impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeriaof the most compelling economic concepts of our time.
He sets out the 'Next 11' concept for the set of fast-growing countries that could have a BRIC-like impact on the world
(Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria

PROS:
• Brazil today is the most popular of the
BRICs so far as foreign direct investment is
concerned
• Brazil has always been popular as “the
country of the future”
• Vast territory
• Abundant natural resources

• Fifth largest population in the world
• Young and growing population
• Brazil has the potential to overtake
Germany & Japan
• Brazil is now home to giant companies
such as Petrobras,which launched the
worlds largest share offering

CONS:
• Currency rising therefore slowing down
the manufacturing part of the economy
• High interest rates
• Centralized political leadership
• Extreme slumps
• Extreme violence
• Corruption and inefficiency

The Growth Map Kolkata , October 9 2012. Edition XXVI
RUSSIA
Jim O’ Neill’s Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a
startling prediction: the G-7 countries including the US, the UK and Japan would no longer be the world's economic powerhouses. With
globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly urbanized and
overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC of the most compelling economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that could have a
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria of the most compelling economic concepts of our time. He sets
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers. out the 'Next 11' concept for the set of fast-growing coun
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further tries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeriaof the most compelling economic concepts
south and east? of our time. He sets out the 'Next 11' concept for the
set of fast-growing countries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria

Russia
PROS:
• Russia is the world's largest country
in terms of territory
• A consumer market of over 140 million
people

• Middle class:
-68% in Russia (100 million people)
- 31% in Brazil (75 million people)
- 13% in China (160 million people)
- <3% in India (30 million people).
• GDP/Capita:
- Russia: $17,000
- Brazil:$11,600
- China: $16,100
- India: $3,700

• Vast natural
• Large energy and mineral resources
• A highly educated workforce
• Technologically advanced research
and production capabilities

• Russia is today one of the most financially stable
countries in the entire world, with among the
lowest levels of sovereign debt and an inflation
rate of below 4%.
• By enabling its treasury bonds – known as OFZs –
to be settled through international
clearinghouses, it is sweeping away regulatory
barriers that have kept foreign investors away.
This could trigger a $30-50 billion foreign
investment into the ruble bond market
•

Russia
• Cons
• Unfavorable demographics - population decline
due to emigration, HIV, rising death rates and
falling birth rates.
• Excessive dependence on energy and raw
materials
• Poor record in governance and legal structures
• Corruption and weak corporate transparency is
another major ongoing risk for investors

• Politics represents the biggest investment risk:
Yukos was forced into bankruptcy!
• . In 2003, Mikhail Khodorkovsky, CEO of Yukos,
one of Russia's biggest and most successful oil
companies was convicted, on trumped-up
charges, to an eight-year jail sentence. Yukos was
forced into bankruptcy, and its assets sold off for
a fraction of its market value.
• Poor infrastructure though large sporting events
like the Winter Olympics in Sochi 2014, and the
FIFA World Cup in 2018 could change all that.

The Growth Map Kolkata , October 9 2012. Edition XXVI
CHINA
Jim O’ Neill’s Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a
startling prediction: the G-7 countries including the US, the UK and Japan would no longer be the world's economic powerhouses. With
globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly urbanized and
overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC of the most compelling economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that could have a
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria of the most compelling economic concepts of our time. He sets
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers. out the 'Next 11' concept for the set of fast-growing coun
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further tries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeriaof the most compelling economic concepts
south and east? of our time. He sets out the 'Next 11' concept for the
set of fast-growing countries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria

• China is the biggest of all the
BRIC nations. In fact, there
would be no BRIC story without
China.
• GDP grew from $500 billion
USD in 1995 to a massive 7.52
trillion U.S dollars in
2011, averaging a fantastic 10%
growth rate every year.
• It is the 2nd largest economy in
the world after USA and the
only BRIC nation whose

• Projected to be world’s
largest economy by 2027.
• Holds more than $ 3 trillion
in foreign exchange
reserves, close to 50% of
their own GDP, vastly larger
than any country in the
world.
• Rising personal
consumption, no longer an
export and a low-cost
labour phenomenon.

Equity Market
• Shanghai stock exchange is the 5th
largest in the world by market
capitalization at U.S.$2.3 trillion
as on December 2011
• It is not entirely open to foreign
investors due to tight capital
controls exercised by the
government.
• It is also not very transparent
leading to most Chinese investing
in real estate or the shadowy
world of underground lending.

Recent reforms in June this year by the China
securities and regulatory Commission (CSRC) has
sought to bolster investor confidence:
• Increase in the amount of
shares foreign investors can
buy in an otherwise closed
market.
• Listed Companies urged to pay
more cash dividends to
shareholders.
• Focused on improving fair play
in the market and protecting

Debt Market or Fixed income market
It is said that the richer a
country becomes, the
more it borrows. The
Chinese bond
market, even though now
underdeveloped, is at the
threshold of huge
expansion.

Characteristics of the debt market in China:
• Debt markets are still dominated
by Government debt
• Consumers save rather than
borrow
• Companies depend on bank
lending, retained earnings or
informal private transactions to
fund expansion.
• Chinas $666billion corporate
bond market is just 9% of its
GDP, whereas in developed G7
countries it is usually more than

It is important to develop the bond market
because:
• It would allow the financing and
sustaining of China’s boom.
• It would divert risk from state
owned banking system that
provides 75% of the nation’s
credit.
• It would provide capital to the fast
growing small and medium
enterprises that comprises 60% of
GDP and generates 50% of tax
revenues.
• It would provide alternate avenues
of investment to China’s savers.

Private Equity
With Chinas stock exchanges in
Shenzhen and Shanghai still in an
early stage of development, private
equity and venture capital are
natural avenues of investment. The
private Equity business is already
huge and is also growing rapidly.
However, the problem is that there
is too much money chasing too few
deals. The Blackstone group is a
notable investment and advisory
firm that has active programs in

Real estate
• Real estate was the most safe avenue
for investment.
• Real estate prices rose very high and
there were chances of it being a
bubble.
• The government enacted certain
reforms from 2010 to prevent the
bubble from occurring and prices
slowly started falling in 2011.
• The key drivers for real estate are GDP
growth, strong urbanization trend and
strong household income growth.

The Growth Map Kolkata , October 9 2012. Edition XXVI
PROSPECTS
Jim O’ Neill’s Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a
startling prediction: the G-7 countries including the US, the UK and Japan would no longer be the world's economic powerhouses. With
globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly urbanized and
overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC of the most compelling economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that could have a
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria of the most compelling economic concepts of our time. He sets
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers. out the 'Next 11' concept for the set of fast-growing coun
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further tries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeriaof the most compelling economic concepts
south and east? of our time. He sets out the 'Next 11' concept for the
set of fast-growing countries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria

Prospects
• The existing prospects of the BRIC countries
are good for us all.
• Apple is opening ore outlets in China. We
believe that one of the Shanghai Stores
attracts even more visitors than their famous
glass cube on the 5th Avenue in New York. The
next decade will power the BRIC economies to
be bigger than the US.

• Wal-Mart is trying significantly to expand in the
BRIC Market, as is true for the UK’s Tesco. China
is setting up a campus of Nottingham University.
The expansion of educational products and
services could and should become a huge
opportunity for the west in both China and India.
• Germany sees direct benefits from the BRIC
consumer appetite for its cars.
BMW, Mercedes, Audi, VW all are experiencing
dynamic growth in their sales to the BRICS!
• China alone has many billionaires compared to
many countries put together.

The Growth Map Kolkata , October 9 2012. Edition XXVI
CONCLUSION
Jim O’ Neill’s Neill book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a
startling prediction: the G-7 countries including the US, the UK and Japan would no longer be the world's economic powerhouses. With
globalization, a new era would emerge in which the emerging forces of Brazil, Russia, India and China - populous, increasingly urbanized and
overflowing with raw materials and ambition - would overtake the largest Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers.
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further
south and east?
In this landmark book Jim O'Neill, chairman of Goldman Sachs Asset Management, shares his insights on how and why he developed one
book, The Growth Map has been an eyeopener. Ten years ago, Jim O'Neill made a startling prediction: the G-7 countries including the US, the UK
and Japan would no longer be the world's economic powerhouses. With globalization, a new era would emerge in which the emerging forces of
Brazil, Russia, India and China - populous, increasingly urbanized and overflowing with raw materials and ambition - would overtake the largest
Western economies.
The BRICs were born. No other economic idea has defined the 21st Century more powerfully or more accurately. In the past decade all four BRIC of the most compelling economic concepts of our time. He sets out the 'Next 11' concept for the set of fast-growing countries that could have a
nations have experienced significant growth and are now among the top ten economies in the world. Jim O'Neill's single prediction has spurred BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria of the most compelling economic concepts of our time. He sets
economic and social change, created new political structures and challenged the thinking of business leaders, governments, and decision makers. out the 'Next 11' concept for the set of fast-growing coun
But what does the future hold? Can the BRICs sustain their exceptional levels of growth? Which other nations will drive economic power further tries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeriaof the most compelling economic concepts
south and east? of our time. He sets out the 'Next 11' concept for the
set of fast-growing countries that could have a BRIC-like impact on the world (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria

• BRIC exposure
• Nifty fifty
• BRIC equity markets more difficult in comparison
to advanced markets
• Growth of BRICs
• Commodity companies are great BRIC
investments
• Improved regulatory and legal frameworks
• Rapid increase in the number of billionaires in
BRICs

• BRIC and N-11 economies have cyclical variation
• Capitalization of public companies
• Growth and asset returns in ERP
• Hardest questions for equity investors- invest in
BRICs directly, or companies investing in BRICs??
• Performance relative to a benchmark of the
market
• Careful judgment to ensure future earnings
• Challenges?
• UIDAI
Great change in our current world!