Goldman Sachs, the global investment bank, released a report in early October concerning the rise of the BRICs economies - referring to Brazil, Russia, India and China by their initial letters - as a formidable force in the world economy over the next 50 years.
Goldman said that in 2050, China would become the largest economy in the world, followed by the U.S., India, Japan, Brazil and Russia.
"By mapping out gross domestic product (GDP) growth, income per capita and currency movements in the BRICs until 2050, we find that the BRIC economies together could be larger that the G6 (excluding Canada from the G7) in U.S. dollar terms," said Dominic Wilson and Roopa Purushothaman, economists at Goldman.
"Currently, the BRIC economies account for less than 15 percent of the size of the G6 but by 2025, they could account for over half the size of the G6," they said.
Goldman forecast that China could overtake Germany in the next four years, Japan by 2015 and the U.S. by 2039.
It added that India's economy could be larger than all but the U.S. and China in 30 years while Russia would overtake Germany, France, Italy and the U.K.
While the trend is BRIC, it is Malaysia interest to make it IRIC! What is IRIC? IRIC stand for Indonesia, Russia, India and China.
Size of Indonsia and it population are similar to Brazil. Indonesia is also resource rich like Brazil.
By replacing Brazil with Indonesia. Malaysia would be surround by at least three economic power house, China, India and Indonesia. It three major race, Chinese, Indian and Malay can capitalize on their language , network and connection in all the three country. Malaysia would become prosperous if IRIC replace BRIC.
However, due to Indonesia bad track record in Nationalise private foreign investment.Indonesia has difficulties in attracking Foreign Direct Investment(FDI).
Malaysia private sector have invest a lot in plantation sectors in Indonesia. Including KL Kepong Group, IOI Group and PPB oil plam. A few auto parts manufacturer also invest in Indonesia, including Tan Chong Group and Ingress Corporation Bhd.
However, after the ill treatment of chinese by Indonesia government during Asia Financial Crisis has slow down the appetide of privite sector in Malaysia to invest in Indonesia.
Then the Government Link Company(GLC) like Gutherie and Bumiputra Commerce Bank invest aggressively in Indonesia.
However, there is an oil rich island dispute between Indonesia and Malaysia government few month ago and Indonesia government sent it warship to the dispute area. Indonesian also burn Malaysia flag in a demonstation. This make even the bumiputra in Malaysia get angry as they help Indonesia during Tsunami crisis.
It is Malaysia interest to make IRIC work. However, how Indonesia react, response reciprocate it neighbour is also important.
Update: Global Voice Online
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