Jan 26, 2011
Long live BRIC, welcome MIST
By Sreeram Chaulia
After setting the terms of discourse in world affairs at the turn of the millennium with the coinage, “BRIC” (Brazil, Russia, India and China), Jim O’Neill – the former chief economist of Goldman Sachs – has just kick-started the new decade with a fresh acronym: “MIST” (Mexico, Indonesia, South Korea and Turkey).
The catchiness of a four-country grouping which can be uttered in a simple abbreviated form that can play on every stakeholder’s lip has proven a sure hit with BRIC, which captivated the investor community and shook global geopolitics. Whether MIST can achieve the same haloed status as a byword for high, guaranteed return on money and as a harbinger of further redistribution of power in the international system remains to be seen.
O’Neill, who is now chairman of Goldman Sachs Asset Management, believes that these four distinct economies deserve to be uttered in the same breath because each of them fulfills the size criterion of accounting for more than 1% of global GDP in nominal terms. He also expects the MIST economies to rise further in size and hence makes the case for them to be taken seriously as growth markets.
O’Neill has an uncanny knack of timing his neologisms to coincide with large pools of investment funds seeking new opportunities and pastures. The magical and solid-sounding BRIC helped channel enormous sums of capital into its constituent countries at a time where interests rates were low globally and money managers were on the look out for higher yielding destinations in Asia. BRIC countries themselves seized upon O’Neill’s phrase and engaged in their own BRIC heads-of-state summits, BRIC investment forums, and BRIC academic seminars to cash in on the euphoria.
(As long as they do not rearrange them to CIRB and STIM)