Niall Ferguson’s diary: Brazil is overtaking us – but it no longer feels like that

 São Paolo

It was back in 2001 that my good friend Jim O’Neill of Goldman Sachs coined the acronym ‘Bric’, short for Brazil, Russia, India, China. These were the emerging markets that were going to surpass the developed economies. And so they have. Well, nearly. I, too, am partial to a good acronym and it has always seemed to me very unfortunate that there isn’t a matching one for the four biggest established economies. According to the International Monetary Fund, these are currently the United States, Japan, Germany and the United Kingdom (based on last year’s GDP figures). I therefore propose ‘Juugs’. The rise of the Brics and the fall of the Juugs has a good ring to it. According to one of the IMF’s measures — admittedly the one most favourable to emerging markets — the Brics have not quite overtaken the Juugs, but they will do within five years. The fact that their shares of global output are currently about the same (27 per cent compared with 31 per cent) is itself astonishing. Thirty years ago those shares were, respectively, 14 per cent and 45 per cent.

Yet a trip to Brazil is a reminder that all is not entirely solidly built in Bricland. According to the country’s central bank, Brazil went into recession in the second half of last year. The gloom is palpable in São Paolo. ‘There are two kinds of Brazilians,’ I am told. ‘The depressed and the really depressed.’ I can see part of the reason why. I have never endured worse traffic in all my life than the two journeys from and back to the airport. It does not surprise me that an increase in bus fares sparked riots last year. You might think that, with the World Cup due to start in just 15 weeks, and with the host country as the hot favourites, the mood would be more cheerful. The converse is true. More than one person I met here expressed the hope that Brazil would get knocked out — to increase the chance that the deeply unpopular President Dilma Rousseff would lose the election due later this year. Usually, the organisers of world cups worry most about the England fans. But visiting supporters will have their work cut out just getting to the matches on time. It may well be the locals who cause the crowd trouble.

No one here gives a hoot about the centenary of the first world war. That may be because, like the United States, Brazil did not enter the war until 1917. In both cases, it was the German policy of unrestricted submarine warfare — directed against neutral shipping — that triggered intervention. The Lusitania remains a name to conjure with (whatever that means). I have to admit I did not know the name of the Brazilian steamship Paraná, torpedoed on 5 April 1917. Nor did I know that the incident forced the resignation of the Brazilian foreign minister, whose surname, unfortunately for him, was Müller.

To the visitor from the United States, the things Brazilians complain about have a familiar ring to them. Corruption, bureaucracy, public sector inefficiency, failing schools, crumbling infrastructure — it’s just like being back home. ‘We used to think São Paolo was New York,’ one of my hosts lamented. But maybe the reality is that New York is São Paolo — or getting that way. A few years ago, in a book called Civilisation, I speculated that the real story of 21st-century America might be North-South convergence. I am more and more certain this is right. The fact that the Brics are catching up with the Juugs is not just about economics. In myriad ways, Brazilians have become more American than they were when I was born (which, to my consternation, was 50 years ago). But Americans have become more Brazilian. Does anyone have an acronym to replace ‘wasp’?

I never cease to be astonished at what makes the news in America and what gets ignored. The lead story in the New York Times, as I write, is ‘Obesity Rate for Young Children Plummets 43% in a Decade’. This month, however, the Organisation for Economic Cooperation and Development published a report on educational standards that I would have put on the front page. We have known for some years that the average teenager in the Shanghai district of China is better at mathematics than the average American teenager. The latest Pisa study shows that the children of American professionals do worse in standardised tests than the children of Chinese manual workers. (The same goes for children of British professionals.) It is small consolation that Brazilian teenagers are even less numerate. Maybe it is just because I resent having been forced to drop maths at the age of 16, but I firmly believe that western civilisation will cease to count when our children can no longer count.