Will Indonesia Replace India in the BRICs

[roma]

I won't say there is no chance. Indonesia has a population base of 250 million, and that's enough potential in human resource for a country to grow as big as a median-sized developed country, something like South Korea nowadays or even bigger. Choosing the right way to industrilize itself is the most important part. Indonesia isn't such a backward country in many aspects. They even had a small scale of commercial aviation industry once before their ecnomic suffering huge lost in 1998. Meanwhile, there are strong competitors within similar developing stage in SE Asia. Vietnam, Malaysia, Indonesia or even the joke Philippine will have to compete for those industries transfered from other countries. Vietnam, with its better organized goverment and citizens, might have an upper hand in efficiency.

as much chance as Argentina has of replacing brazil in that case ! all the arguments given in favour of inddonesia can also be applied to the possibility of argentina replacing brazil i that case .....

choosing the right way to industrialise ........ those few words ..... but it takes years and decades to get it done right ....easier said thatn done ?

but really i feel that the initial article by HSBC (?) is fault to begin with -... why replace one member ? why not add a new member .....after all the G7 has become the G8 and there is the other group the g20 ?

so why get asian countries to fight each other when the industrialised worlds doesnt practice the same ....they ADD new members ....why cant brics do the same ...if and when indonesia makes the grade, come on in --- the name might have to be changed , small deal !

i suppose the reason might have been someone gunning for india ???

 

[panduranghari]

Well said Roma! what an elegant solution . Add don't substitute

 

[Adux]

but really i feel that the initial article by HSBC (?) is fault to begin with -... why replace one member ? why not add a new member .....after all the G7 has become the G8 and there is the other group the g20 ?

i suppose the reason might have been someone gunning for india ???

The reasons is simple, they want India to liberalize more, especially in Banking and Retail, something which India is reluctant to do. Therefore you see so many such articles being planted. Dont believe it, there are multiple pressure points being done, to force India to liberalize, which I agree with. The only reason India is not doing so, is because of Mamta banerjee and other lefty idiots in India.

 

[Yusuf]

Adu, our "non liberalized" banking sector saved the day when the west crashed with sub prime crises.

 

[Adux]

Adu, our "non liberalized" banking sector saved the day when the west crashed with sub prime crises.

Yes, but you are assuming my liberalization or even the government of India's is going to be exactly like that of the West. Nopes. Its for a different thread. But No.

 

[Yusuf]

Yes, but you are assuming my liberalization or even the government of India's is going to be exactly like that of the West. Nopes. Its for a different thread. But No.

What the west probably wants is banks that have now failed to have access to Indian market and work according to their policies as followed in the west.

 

[Adux]

What the west probably wants is banks that have now failed to have access to Indian market and work according to their policies as followed in the west.

But that was not the liberalization policy being put forward by the RBI and the Indian Government, we need to give access, we need investments. We dont have to give them a free run, but we do need to give them something. From what I know, The west was even happy with it.

 

[roma]

Yes, but you are assuming my liberalization or even the government of India's is going to be exactly like that of the West. Nopes. Its for a different thread. But No.

it would be good to have that thread started for discussion ! :thumb:

 

[panduranghari]

But that was not the liberalization policy being put forward by the RBI and the Indian Government, we need to give access, we need investments. We dont have to give them a free run, but we do need to give them something. From what I know, The west was even happy with it.

What makes you believe banks invest in the local economy? Banks are nothing less than parasites. Investment banks more than the others. Retail banking is what we have in India. We have Morgan Stanley, Goldman Sachs et al in India advising fund houses but they are not standing alone. Indian government has never allowed investment banks to do what they are doing in London, New York and Hong Kong. And I am thankful for that.

However we have a big problem.

Our nationalised banks have lent a lot of money into the property bubble which I think has even reached tier 3 cities. We are going to see some sort of a reset when the banks have shortage of cash.

 

[ejazr]

Intersting article debating the BRIC and Indonesia comparison

Despite policy paralysis, India's growth is still among the highest for emerging economies - Economic Times

Arvind Panagariya, Professor at Columbia University

Panic has struck the vast majority of commentators on the Indian economy in the wake of the recent decline in the growth rate. In turn, they have spawned a number of myths that pose additional threats to future growth by creating self-fulfilling negative expectations.If the India growth story is to sustain, these myths must be exposed for what they are and balance restored to the policy discourse.

The first myth is that growth has collapsed. It is expressed variously in the press. Some commentators say that gross domestic product (GDP) has collapsed; others say growth has collapsed; and still others say that India growth story is over. Then there are cynics who assert that the 'I' in acronym Bric is about to drop out or that it now stands for Indonesia.

But let us do some fact-checking. Rather than collapse, GDP has continued to grow in every single quarter, not just every year. Even the rate of growth of GDP has not seen a dramatic decline.

In the last fiscal year, which ended on March 31, 2012, GDP grew 6.5%. While below the 8.5% average of the preceding eight years, this is still well above what we have achieved during any other period on a sustained basis and among the highest growth rates in the world now.

To those who think that the 'I' in Bric is about to drop out, let me first remind them that India supplies the only vowel in the latter. But more seriously, commentators making such claims need to check the record of the other countries in the quartet.

Brazil has grown faster than 6.5% a year only once in the last 20 years and its average growth rate since 1996 has been less than 1%. Russia has done better than Brazil since 1999 but its growth rate was -7.8% (yes, negative 7.8%) in 2009, 4% in 2010 and 4.2% in 2011. So, if the acronym is going to shrink, IC is a far better candidate than BRC!

As for those who think that Indonesia should replace India to provide 'I' so as to preserve the elegance of the acronym, let me point out that in doing so, they would be dropping a country whose minimum annual growth rate has been 6.5% since 2003-04 in favour of one whose maximum annual growth rate has been 6.5% since 1997.

The second myth is that India's investment rate has collapsed. If you believe that growth has collapsed, inference of the collapse of the investment rate is the natural next step: how could growth have collapsed with the collapse of investment?

But even the recent Standard & Poor report, which revels in predicting India's fall out of Bric, tells you that the gross investment has been a healthy 35% of GDP in 2011-12. This is well within the range of 27-39% since 2003-04, the year in which growth shifted to the 8-9% range.

The third myth is that reforms are stalled. In a literal sense, this is not a myth since the reforms are indeed stalled.

What is strange, however, is the sudden discovery of this fact by India observers who evidently assumed that since growth was progressing well all these years, progress on reforms must be on track as well.

The reality, however, is that liberalising reforms have been in hibernation ever since the United Progressive Alliance (UPA) assumed office in May 2004.

If anything, in the immediate past, reforms have seen a small forward movement. UPA has restored the petroleum price deregulation, which it had abandoned soon after coming to power in 2004.

Though the government rolled back the opening of multi-brand retail to FDI, it did lift the cap on FDI in single-brand retail with happy results: the world's largest furniture retailer has just announced the plans to invest nearly $2 billion.

There is much that is wrong with the entire approach to economic policy of UPA, as I have written, starting as early as July 2004. But this is not enough to diminish my confidence in the India story just yet for reasons that I have stated in many of my writings in the past several years, which have now found their way into the writings and speeches of many, including top government officials.

To recapitulate the reasons, first, gross investment as a proportion of GDP has remained well above 30% in the last seven years; temporary falls in the growth rate have not dented this key determinant of long-term growth.

Second, the mega reforms done under Prime Minister Narasimha Rao, whose 91st birthday we celebrate tomorrow, as also under Prime Minister Atal Bihari Vajpayee, remain intact.

Policy paralysis has not meant policy reversal. And finally, Indian entrepreneurs remain as cutting edge as ever. Delivery of nearly 4% growth even with their hands and legs tied at the height of the license raj bears eloquent testimony to their entrepreneurial talent.

Does this mean that nothing stands in the way of India becoming the third-largest economy in the world in 15 years? Alas, this is by no means guaranteed.

In addition to the threats posed by possible economic crises abroad, we must also live with our politicians who show no dearth of talent to suppress growth impulses to promote narrow personal interests. So, we need some bit of good luck too.

 

[Bhadra]

Intersting article debating the BRIC and Indonesia comparison

Despite policy paralysis, India's growth is still among the highest for emerging economies - Economic Times

Arvind Panagariya, Professor at Columbia University

Panic has struck the vast majority of commentators on the Indian economy in the wake of the recent decline in the growth rate. In turn, they have spawned a number of myths that pose additional threats to future growth by creating self-fulfilling negative expectations.If the India growth story is to sustain, these myths must be exposed for what they are and balance restored to the policy discourse.

The first myth is that growth has collapsed. It is expressed variously in the press. Some commentators say that gross domestic product (GDP) has collapsed; others say growth has collapsed; and still others say that India growth story is over. Then there are cynics who assert that the 'I' in acronym Bric is about to drop out or that it now stands for Indonesia.

But let us do some fact-checking. Rather than collapse, GDP has continued to grow in every single quarter, not just every year. Even the rate of growth of GDP has not seen a dramatic decline.

In the last fiscal year, which ended on March 31, 2012, GDP grew 6.5%. While below the 8.5% average of the preceding eight years, this is still well above what we have achieved during any other period on a sustained basis and among the highest growth rates in the world now.

To those who think that the 'I' in Bric is about to drop out, let me first remind them that India supplies the only vowel in the latter. But more seriously, commentators making such claims need to check the record of the other countries in the quartet.

Brazil has grown faster than 6.5% a year only once in the last 20 years and its average growth rate since 1996 has been less than 1%. Russia has done better than Brazil since 1999 but its growth rate was -7.8% (yes, negative 7.8%) in 2009, 4% in 2010 and 4.2% in 2011. So, if the acronym is going to shrink, IC is a far better candidate than BRC!

As for those who think that Indonesia should replace India to provide 'I' so as to preserve the elegance of the acronym, let me point out that in doing so, they would be dropping a country whose minimum annual growth rate has been 6.5% since 2003-04 in favour of one whose maximum annual growth rate has been 6.5% since 1997.

The second myth is that India's investment rate has collapsed. If you believe that growth has collapsed, inference of the collapse of the investment rate is the natural next step: how could growth have collapsed with the collapse of investment?

But even the recent Standard & Poor report, which revels in predicting India's fall out of Bric, tells you that the gross investment has been a healthy 35% of GDP in 2011-12. This is well within the range of 27-39% since 2003-04, the year in which growth shifted to the 8-9% range.

The third myth is that reforms are stalled. In a literal sense, this is not a myth since the reforms are indeed stalled.

What is strange, however, is the sudden discovery of this fact by India observers who evidently assumed that since growth was progressing well all these years, progress on reforms must be on track as well.

The reality, however, is that liberalising reforms have been in hibernation ever since the United Progressive Alliance (UPA) assumed office in May 2004.

If anything, in the immediate past, reforms have seen a small forward movement. UPA has restored the petroleum price deregulation, which it had abandoned soon after coming to power in 2004.

Though the government rolled back the opening of multi-brand retail to FDI, it did lift the cap on FDI in single-brand retail with happy results: the world's largest furniture retailer has just announced the plans to invest nearly $2 billion.

There is much that is wrong with the entire approach to economic policy of UPA, as I have written, starting as early as July 2004. But this is not enough to diminish my confidence in the India story just yet for reasons that I have stated in many of my writings in the past several years, which have now found their way into the writings and speeches of many, including top government officials.

To recapitulate the reasons, first, gross investment as a proportion of GDP has remained well above 30% in the last seven years; temporary falls in the growth rate have not dented this key determinant of long-term growth.

Second, the mega reforms done under Prime Minister Narasimha Rao, whose 91st birthday we celebrate tomorrow, as also under Prime Minister Atal Bihari Vajpayee, remain intact.

Policy paralysis has not meant policy reversal. And finally, Indian entrepreneurs remain as cutting edge as ever. Delivery of nearly 4% growth even with their hands and legs tied at the height of the license raj bears eloquent testimony to their entrepreneurial talent.

Does this mean that nothing stands in the way of India becoming the third-largest economy in the world in 15 years? Alas, this is by no means guaranteed.

In addition to the threats posed by possible economic crises abroad, we must also live with our politicians who show no dearth of talent to suppress growth impulses to promote narrow personal interests. So, we need some bit of good luck too.

Why Indonisia? The Terrorist State of Pakistan may do it with all the amout of zakat they collect.

 

[TrueSpirit]

This thread has been dead since a year. Am giving my shot to re-invigorate it.

The BRIC Countries Are The World's New Global Navy

Offshore from Syria, Russia's navy is conducting probably its largest naval deployment outside its own waters since the Soviet breakup. The Chinese navy is in another potential confrontation today with Japan in the East China Sea, and raising questions about where it is headed next.

But the BRIC nations as a whole—a force in the global economic conversation since the acronym was coined by Goldman Sachs to refer to the high-growth economies of Brazil, Russia, India and China—are becoming an increasing naval presence on the high seas. One reason is simple nature—when nations become wealthier, they tend to build up their fighting capabilities. But another is natural resources—all four nations either want to buy or sell oil and natural gas, and they are venturing further and further to do so.

A paradox is that while the shift challenges US primacy on the high seas, the US itself—because of its oil and gas boom—is driving part of the BRIC naval expansion.

Because it is providing for more and more of its own energy requirements, the US is importing much less African and Middle East crude, and the chief new buyers replacing it are BRIC nations—the US is about to be displaced by India as the largest buyer of Nigerian crude oil, for example. "It is only a matter of time before we see Indian ships in the South Atlantic [to patrol the coast of West Africa]," Brahma Chellaney, of the Center for Policy Research in New Delhi, told the Financial Times.

Such a shift—an expansion of Indian forces from the Indian Ocean to the Atlantic—would be huge. But so is the entirety of the BRIC naval activity. Russia has been a maritime power since Peter the Great, and Zheng He made China a major 15th century naval power. But Russia all-but stopped venturing outside former Soviet waters in 1992, and China has not fielded a major navy in the six centuries since Zheng He. Brazil and India have largely stuck to their own shores.

Beijing's and Moscow's naval assertiveness, particularly in Syria and the South and East China seas, attracts most of the attention. But India is building a second aircraft carrier, and may have three by 2020, along with four nuclear-powered submarines and various other modern ships. In 2012, India dispatched warships to the Horn of Africa, the Red Sea and the western Mediterranean. And in 2008 and 2010, India and Brazil conducted joint naval operations with South Africa on the Indian Ocean side of Africa.

In November 2012, some 10,000 Brazilian sailors and soldiers conducted an exercise called "Operation Atlantico 3," meant to demonstrate the country's ability to defend its offshore oilfields.

A greater BRIC role on global trade routes is not a negative development for the US, says Ely Ratner of the Center for a New American Security in Washington, DC.

"There's no reason the American taxpayer should be subsidizing the freedom of navigation in the Indian Ocean when emerging powers like China and India are both increasingly capable of providing this service and are the primary beneficiaries of open sea lanes between Africa, the Middle East and Asia," Ratner told me in an email exchange. "These trends will only become more prominent as the United States becomes even less reliant on direct access to Middle Eastern oil."

Link

 

[ninja85]

only in wet,sweet and short dream of pakibeggars and indonesia

 

[IBSA]

No chance of India quits BRIC group. India has yet a lot of workforce to employ and a emerging middle-class to consume and warm Indian economy for a long time

I think most likely Indonesia enters in the place of South Africa or even Brazil.

 

[amoy]

It is worth noting Russian AF just restores a polar airport on the Novosibirsk Archipelago, in connection with exploration of the Arctic and the northeastern passage.

Among the acronym BRICS only R+C are the most compatible and complementary - in energy, and security, hence sharing a bright prospect.

Sent from my 5910 using Tapatalk 2

 

[Compersion]

It is worth noting Russian AF just restores a polar airport on the Novosibirsk Archipelago, in connection with exploration of the Arctic and the northeastern passage.

Among the acronym BRICS only R+C are the most compatible and complementary - in energy, and security, hence sharing a bright prospect.

Sent from my 5910 using Tapatalk 2

Was reading posts about the BRICS and came across what you said. Would be good if you can elaborate more on the R+C and "sharing a bright prospect". Have the Russians forgiven PRC for the 1970 border war. Not sure if there is documentation where a nuclear armed state has attacked another nuclear armed state in such a manner (hint: kargil and both have one thing in common). Also the PRC ditching on Russia (Soviet Union) during the deng xiao ping era. The embezzlement of technology and defense related skills. PRC looking down on Russia. I also add the Russians agreeing to provide Oil - Energy to PRC (please refer to the following link).

Russia in the European energy sector - Wikipedia, the free encyclopedia

Would be good if you can elaborate how you envision Russia and PRC to have a "bright prospect". Unless you are saying that PRC is a juvenille and subservient to Russia and it is a strong "Economic relationship". That way one can agree with you. Because that is surely what Russia is treating PRC (and rightly after the way PRC behaved with them).

http://en.wikipedia.org/wiki/BRICS_Development_Bank

What is the capital infusion (and voting rights) by each country for the BRICS bank. Please mention the amount PRC contributed and wanted to (and why). why was there disagreement on the amount.