If you were a journalist at the G20 in Toronto next weekend, would you rather interview Stephen Harper or Lula? (Assuming you could get through security, of course.)
The answer is Lula, of course. It would be polite to feign interest in the host prime minister, but let’s face it: Brazil’s Luiz Inacio Lula da Silva, or Lula as he is known in a country that likes to give its soccer stars single names, is a global player.
He’s the president of one of the biggest and fastest-growing economies in the world.
Brazil is, after all, the “B” in BRIC, which is an acronym that has been at the top of a lot of CEO agendas lately (the other letters standing for Russia, India and China).
Brazil’s economy has been doing extremely well in recent years, and its approximately 200 million people have been rapidly becoming more productive and wealthier.
The IMF projects that Brazil’s economy will grow at 5.5 per cent this year, not as fast as China or India but more than double the developed economies. In the next five years, for example, 9 million Brazilian households are expected to join the global “middle class.” To put it in perspective, that’s the equivalent of roughly two Ontarios.
Furthermore, in terms of international clout, people are paying a lot more attention to countries like Brazil. Lula’s intervention in the nuclear sanctions on Iran made global headlines, with Brazil and Turkey signing a nuclear fuel deal with Iran.
Brazil’s Vale already owns some of the biggest mines in Canada, and Yukonomist is writing this column on one of Air Canada’s Brazilian Embraer 190s on the Calgary-Whitehorse route.
Brazil’s exports are growing at 15 per cent per year, and are expected by some analysts to be about as big as Japan’s in 2020.
The forces behind the G20’s growing global importance go much deeper than just the four BRIC powers. Think about the hundreds of millions of people represented by other G20 leaders in Mexico, Indonesia, Turkey and beyond. An interesting way to think about it is to look at the rise of the “emerging markets city.”
There are already more than 400 cities in the BRIC countries, plus Mexico, Indonesia and Turkey, with populations over 500,000. In the next 20 years, another 200 cities will join the list.
Some United Nations forecasts suggest that 1.3 billion more people will live in emerging markets cities in 2030 compared to 2.6 billion now. That’s around 4 billion people, a staggering figure.
In the same period, cities in the developed world are expected to grow a mere 100 million people. If you haven’t heard of places like Salvador, Suqian or Ahmedabad, you probably will. All have populations bigger than Vancouver and economies growing at least twice as fast as, say, the European Union’s.
So, while the G20 coverage we watch will likely focus on European and American topics, such as the Greek debt crisis and banking regulation, with the odd Chinese exchange-rate story thrown in, we should remember that in the background a massive tectonic shift of the globe’s centre of economic gravity is happening.
What does this mean for Yukoners? For many, perhaps not much. Protected from reality inside our transfer payment bubble, they can continue to have meetings and participate in multi-stakeholder consultations. But for others it is a big deal.
Yukoners are already drilling for minerals in Mongolia and selling mineral properties to Chinese investors. A momtrepreneur in Yukonomist’s neighbourhood with connections in Rajasthan is in business selling Indian textiles.
The new world economy raises a lot of opportunities, especially for young people. Many universities are trying hard to grow their connections with the rapidly developing world, increasingly building opportunities for study in rapidly developing countries into their course programs. Western Ontario’s Ivey business school has a campus in Hong Kong.
This point hit home the other day, when a friend asked why Yukonomist’s kids were in French immersion instead of Mandarin immersion.
It’s a good question and, interestingly, one that the Edmonton school board has answered with a program that has almost 2,000 students.
They, unlike the rest of us, will be able to read what the Chinese papers say about next week’s G20 shindig.
Keith Halliday is a Yukon economist and author of the Aurore of the
Yukon series of historical children’s adventure novels.