“If, in fact, the BRICS bank is announced, this will be the beginning of an institution that sort of becomes a World Bank for their huge sphere of influence,” Jim O’Neill told state-run China Daily here.
BRICS, originally was named ‘BRIC’ by O’Neill in 2001 before the inclusion of South Africa in 2010.
The bank could be helpful in promoting BRICS (Brazil, Russia, India, China and South Africa) countries’ trade, he said, stressing that the new group’s economic achievements are much bigger than political.
With respect to economics, he said, BRICS countries – except South Africa -have become much bigger much more quickly than he expected, even if they have lost some momentum in the past 12 months.
He said the BRICS countries achievements were “remarkable” as their collective GDP in 2011 increased by around USD 2.3 trillion, which is equivalent to the size of Italy’s GDP.
“By 2015, if not before, the combined size of the BRICS economies seems highly likely to become as big as the US and they are set to become as big as the G7, as we assume, by 2027,” O’Neill said.
O’Neill continues to put his confidence in emerging markets, remains bullish on China, and believes the country’s slowing 2012 growth will pick up in 2013.
“The importance and scale of China for the world, never mind within the BRICS group, is next to none and vital for us all,” he said.
As a result, he said, the decisions China makes – both in its own right and within a BRICS context – are extremely important.
“This decade, China will grow by around 7.5 per cent (annually) and I am happy with that,” O’Neill said.
He is also a bit surprised by the weakness of the retail sales numbers reported this year, which suggests that China needs to boost consumption, which might need more policy support.
Assuming the Chinese government does pull that off, O’Neill said it would mean China will succeed in doubling both real GDP and real incomes this decade as planned, and this would be good for the world.
Other BRICS countries, O’Neill said, need to concentrate on their own priorities rather than worry about China, as they also have things to achieve.