Bankers and business people are used to the acronym BRIC. Ordinary people, however, may think that it just an incomplete way of spelling the construction material used in the building of houses. In the vocabulary especially of investors, BRIC stands for the four countries of Brazil, Russia, India and China. These are the four countries with a total consumer population of about 2.8 billion that according to Jim O'Neill, the Goldman Sachs Group economist who coined the acronym in 2001, will dominate the global economy in the next twenty years. What is the main reason for their economic strength? Large populations and income levels at which rapid increases in per capita income result in exponential growth of demand for consumer goods and services like motorcycles, cars, television sets, mobile phones, computers, telecom services, etc. They can produce large volumes of goods and services by just selling to their own domestic markets. They are not completely dependent on exporting goods, unlike the tiger economies such as Singapore, Taiwan, and Hong Kong.

To these four countries, the Goldman Sachs economists added another eleven with largepopulations.

These are Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey, and Vietnam. What is common to these countries is a population of at least 50 million people. As has become more evident this year, when a deep recession has hit the entire world, most of these so-called emerging markets are still growing in their national incomes while all the advanced countries are suffering large declines. Our more developed neighbors, Japan, Singapore, Hong Kong, and Taiwan are experiencing declines of as much as -7 to -9 in GDP.

Another advantage of most of these emerging markets, as contrasted with the tiger economies of the last century, is that they are also rich in natural resources, such as agricultural lands, energy resources, minerals, forest, and water.

They can export the products from these natural resources to the resource-poor countries such as Japan and South Korea. But their most important resource is what is known as human capital. As long as they are investing heavily in education, they can really dominate the world economy as most of the developed countries stagnate under the burden of the demographic winter. With the exception of the United States, that still has a relatively young population, the rest of the developed world is facing the great challenge of the rapid aging of the population. This is another reason why economic power will shift to the emerging markets in which populations are still rising and less than 10 percent of the population are above 65 years of age.

The Philippines is fortunate for being included among the emerging markets whose economic future is brightest in the next 20 years. We can, however, fail to take advantage of our potential growth if we choose the wrong leaders in the coming May, 2010 elections. We need leaders who will address the poverty problem by building more rural infrastructures, investing in quality education for the masses, improving governance in both the public and private sectors, and removing the many remaining obstacles to investments – both local and foreign – that are encrusted in our institutions, including our outmoded Constitution. For comments, my e-mail address is bvillegas@uap.edu.ph.