Given the lousy growth prospects of mature economies, it is no surprise that the world has been hooked on emerging markets acronyms. The one that has stuck over the years is ‘BRICs’. What has made the godfather of alphabetical allies far more interesting than any other investment label is that its members have decided to turn it into a self-fulfilling political prophecy, replete with high profile meetings, joint statements, and a letter-matching new member (South Africa, with a capital S). How far the recapitalized ‘BRICS’ bloc can go depends on a wide range of factors. Strategic rivalries, markedly different political systems, structural constraints, and an uncertain global outlook provide easy headlines, but beneath them resides a thornier problem: how to align hydrocarbon supply and demand in a restive geopolitical environment. As the balance between established and emerging markets shifts, a common energy formula will be the key to BRICS success - or indeed failure. Roughly translated, that means Russia and India allowing for a Chinese hydrocarbon lead, with Brazil and South Africa providing gradated BRICS buffers. No doubt a tall order, but one to seriously ponder.
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