BRIC countries disappoint as growth targets
Do you know how to speak Kannada yet? You might very well have to learn it if you want to speak to any of those customer service folks based in Banglore (a city in the state of Karnataka, India). At a meeting with a group of business executives of Indian origin yesterday, I learned that the government in that state has banned the use of English in schools. Well, I am just kidding about us having to learn Kannada. Hopefully, we can find enough English speakers in The Philippines.
In any case, this development highlights while the so-called BRIC countries have failed to live up their expectations. Except India (which is still at a depressing #43), all other countries fell in their global competitiveness: Brazil and Russia by 9 positions while China by 6 positions.
Brazil
I had hoped that the pace of reform in the country would be faster, but bureaucracy, red tape, and debt levels are dragging it down.
Russia
The country has not made much progress in erasing its image as just a difficult place to do business – the corruption simply makes you sick.
India
The only country in the group that has improved its rank but the corruption, red tape, and bureaucracy make India a depressing place to do business and raise the stakes since infrastructure is non-existent and whatever little exists, is unreliable. The hype about India may actually be doing more harm than good because it does not put pressure on the politicians to speed up reforms.
China
I had expected China to translate its manufacturing success into becoming a technological powerhouse, but instead it showed a scary drop in the quality of China’s institutions. In other words, investors must exercise caution while dealing with Chinese institutions and factor it in their ROI and risk calculations.
And finally, the drop in American competitiveness had been expected by me when I wrote about it two years ago, except that tax policy, deficits, and rising healthcare costs have happened faster than most of us expected.
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