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In his book, The Growth Map: Economic Opportunity in the BRICs and Beyond , Jim O'Neill argues that the term emerging markets no longer applies to the BRIC nations (and a few others, including Mexico and Korea). While he has long been bullish on the economies of Brazil, India, and China, O'Neil--chairman of Goldman Sachs Asset Management--has come to realize that, in many ways, these economies have earned a little more respect as strong, stable markets. He spoke recently with Charlie Rose about the strength of the BRIC economies, and how we all need to stop regarding "growth markets" as "developing." Here is an excerpt: Watch the full interview here .

In a new report at the McKinsey Quarterly , McKinsey analysts Richard Dobbs , Jeremy Oppenheim , and Fraser Thompson point out that we are in the midst of an historic expansion of middle class consumers globally. They estimate the global middle class will reach 5 billion people by 2030, with China and India leading that growth. This has brought on a significant challenge for economies and for global business: resource costs. While the economic growth of the 20th century was aided by "cheaper natural resources," commodity prices have been high for the start of this century, and are likely to remain so. Dobbs, Oppenheim, and Thompson argue that this problem represents an opportunity to companies that are willing and able to lead a "resource revolution," and take measures to adapt. The chart below shows their estimates of how much value companies can find in adjusting strategies to account for rising costs. They call this the "resource prize": The authors write that the key is to "create cost advantages" and "generate new stresses on the management of risk and regulation" by pursuing the following: Pursue growth opportunities. Helping consumers and companies to use or access resources more efficiently should be very good business in the years ahead. For instance, the fastest-selling elevator line in Otis’s 150-year history is the Gen2, which uses up to 75 percent less energy than conventional elevators. Major companies, such as General Electric and Siemens, are building resource productivity businesses by investing heavily in emerging clean-energy and clean-water opportunities ranging from wind turbines to industrial-energy efficiency. And in technology centers such as Silicon Valley, a broad range of clean-tech investors and entrepreneurs seek profits by revolutionizing resource productivity. In fact, venture capitalist Vinod Khosla predicted in a recent paper that positive “Black Swans” will “completely upend assumptions in oil, electricity, materials, storage, agriculture, and the like.” Boost internal efficiency. Companies have large, profitable opportunities to improve the efficiency of their resource use across the value chain. Consumer-packaged-goods manufacturers have cut their energy costs by up to 50 percent by pulling productivity levers that pay back their costs in less than three years. Wal-Mart Stores has implemented a sourcing strategy that aims to reduce supplier packaging from 2008 levels by 5 percent no later than 2013, for estimated direct savings of $3.4 billion.7 Capturing many of these supply chain opportunities will require much closer collaboration between upstream and downstream players. Manage risk. As resource inputs to production processes become increasingly scarce, companies need to develop a more sophisticated understanding of their exposure to different natural resources, including supply chain dependencies and regulatory risks. Steel, for example, is becoming ever more critical in the oil-and-gas sector because of the shift to offshore deepwater drilling. Steel production depends crucially on the supply of iron ore, which in turn relies heavily on the water used to extract it. Almost 40 percent of iron ore mines are in areas with moderate to high water scarcity, and a lot of steel is produced in places where water is relatively scarce. Read Mobilizing for a resource revolution here .

We find it hard to talk about China without talking about India. Sometimes, for the sake of economic comparison, we pit the two against each other. Other times we pit the two, often along with South American kindred spirit Brazil, against the developed economies of the West. india and China seemed to zag while the rest of the world zigged during the global economic crisis, and were able to grow while the US, China, and Europe stagnated. But as 2011 ends, the two growing powerhouse economies are showing some vulnerability. At Project Syndicate , Stephen Roach warns us not to carried away by concerns that China and India will struggle in the coming year. He is a little worried about India's ability to avert crisis. As for China, Roach says not to expect a "hard landing," as China's policymakers have taken necessary action to ward off any major downfall: That is particularly evident in Chinese officials’ successful campaign against inflation. Administrative measures in the agricultural sector, aimed at alleviating supply bottlenecks for pork, cooking oil, fresh vegetables, and fertilizer, have pushed food-price inflation lower. This is the main reason why the headline consumer inflation rate receded from 6.5% in July 2011 to 4.2% in November. Meanwhile, the People’s Bank of China, which hiked benchmark one-year lending rates five times in the 12 months ending this October, to 6.5%, now has plenty of scope for monetary easing should economic conditions deteriorate. The same is true with mandatory reserves in the banking sector, where the government has already pruned 50 basis points off the record 21.5% required-reserve ratio. Relatively small fiscal deficits – only around 2% of GDP in 2010 – leave China with an added dimension of policy flexibility should circumstances dictate. India, however, "is more problematic," Roach notes: India is more problematic. As the only economy in Asia with a current-account deficit, its external funding problems can hardly be taken lightly. Like China, India’s economic-growth momentum is ebbing. But unlike China, the downshift is more pronounced – GDP growth fell through the 7% threshold in the third calendar-year quarter of 2011, and annual industrial output actually fell by 5.1% in October. But the real problem is that, in contrast to China, Indian authorities have far less policy leeway. For starters, the rupee is in near free-fall. That means that the Reserve Bank of India – which has hiked its benchmark policy rate 13 times since the start of 2010 to deal with a still-serious inflation problem – can ill afford to ease monetary policy. Moreover, an outsize consolidated government budget deficit of around 9% of GDP limits India’s fiscal-policy discretion. Read Why India is Riskier than China here .

Bloomberg 's Kartik Goyal reports that India's economy grew 6.9% in the third quarter of 2011. While that number looks great from the US, it is the lowest level of growth since the second quarter of 2009. Inflation and exposure to Europe's economic woes are leading causes for the lower expansion rate, but India is certainly not alone feeling the effects of global slowdown. Goyal writes: While India’s growth is still the fastest after China among major economies, expansion in BRIC nations is starting to falter as demand from Europe wanes. China’s economy grew 9.1 percent in the third quarter from a year earlier, the least since 2009. Manufacturing in India grew 2.7 percent in the three months through September from a year earlier, slower than the 7.2 percent gain in the previous quarter, today’s report showed. Mining fell 2.9 percent, farm output rose 3.2 percent and construction grew 4.3 percent. Investment by companies and the government declined 0.6 percent in the three months ended Sept. 30 from a year earlier after a 7.9 percent gain in the previous three months, according to the report. “The slippage in investment that we are seeing doesn’t jeopardize the medium-to-long term story at all,” Kaushik Basu, chief economic adviser in India’s finance ministry, told reporters in New Delhi today. He expects India’s economy to expand about 7.5 percent in the year ending March 31. Read India’s Economy Expands Least Since 2009 as Fastest BRIC Inflation Bites here .

Jagdish Bhagwati once again states his case for economic growth as the best path toward increased welfare of citizens across the income spectrum. At Project Syndicate , he argues that the best policy for countries with large populations living at or below poverty levels is growth with an explicit "inclusive development" strategy: Since the 1950’s, developmental economists have understood that growth in GNP is not synonymous with increased welfare. But, even prior to independence, India’s leaders saw growth as essential for reducing poverty and increasing social welfare. In economic terms, growth was an instrument, not a target – the means by which the true targets, like poverty reduction and the social advancement of the masses, would be achieved. A quarter-century ago, I pointed out the two distinct ways in which economic growth would have this effect. First, growth would pull the poor into gainful employment, thereby helping to lift them out of poverty. Higher incomes would enable them to increase their personal spending on education and health (as seems to have been happening in India during its recent period of accelerated growth). Second, growth increases state revenues, which means that the government can potentially spend more on health and education for the poor. Of course, a country does not necessarily spend more on such items simply because it has increased revenue, and, even if it does, the programs it chooses to fund may not be effective. Read Does Redistributing Income Reduce Poverty? here .

The OECD 's composite leading indicators (CLIs) are "designed to anticipate turning points in economic activity relative to trend." The CLIs for August, just released today, are now pointing toward a global slowdown: Anything below that 100 marker points to economic activity below the long term trend. The August numbers show most countries in the OECD already below the line. India, Brazil and China are all below the line as well, with India and Brazil well below. The US, Germany, and Russia are looking better, but are also trending toward slowdown. Japan, is an outlier. Its CLI "continues to indicate a potential turning-point in economic activity." See the specific CLIs for OECD countries here .

Scotch as an economic indicator? The high priced whiskey has had a very strong year. The Guardian 's Severin Carrell reports that revenue from exports of Scotch were up more than 20 percent during the first half of this year. That is more than a little pleasing to the Scottish government as it has set some very ambitious growth targets over the next few years--50% growth in exports by 2017, according to the Guardian. But what we find striking is where the growth is: Foreign shipments of blended and malt whisky were worth £1.8bn, compared with £1.47bn in the first half of 2010, despite the global economic downturn, the relative high cost of whisky and depressed overseas sales by other British exporters. The Scotch Whisky Association (SWA) said that the strongest sales increases were in Asia, rising by 33% to £423m, and in Central and South America, where the value of exports jumped by nearly 50% to £214m. Sales in the US hit £268m, up 14%, and in France rose by 13%, up to £220m. Gavin Hewitt, the SWA's chief executive, said whisky was now a "main driver" for the UK in building overseas markets. The association's success in breaking down trade barriers and strengthening legal protections for the Scotch brand in India and Turkey had been essential, he added. Brazil, China, India? Scotch nations? Surely the growth in Scotch buying there is a sign of a rising consumer class, and bodes well for other luxury items globally. Read the full article here .

While Europe and the US are struggling with low growth and calls for austerity, some key developing economies are thriving. In a commentary at Project Syndicate , Dani Rodrik points out that, unlike their counterparts in most developed economies, "[p]olicymakers in China, Brazil, India, and Turkey worry about too much growth, rather than too little." As is often the case, fiction best reflects the changing mood. The émigré Russian novelist Gary Shteyngart’s comic novel is as good a guide as any to what might lie ahead. Set in the near future, the story unfolds against the background of a US that has slid into financial ruin and single-party dictatorship, and that finds itself embroiled in yet another pointless foreign military adventure – this time in Venezuela. All the real work in corporations is done by skilled immigrants; Ivy League colleges have adopted the names of their Asian counterparts in order to survive; the economy is beholden to China’s central bank; and “yuan-pegged US dollars” have replaced regular currency as the safe asset of choice. But can developing countries really carry the world economy? Much of the optimism about their economic prospects is the result of extrapolation. The decade preceding the global financial crisis was in many ways the best ever for the developing world. Growth spread far beyond a few Asian countries, and, for the first time since the 1950’s, the vast majority of poor countries experienced what economists call convergence – a narrowing of the income gap with rich countries. This, however, was a unique period, characterized by a lot of economic tailwind. Commodity prices were high, benefiting African and Latin American countries in particular, and external finance was plentiful and cheap. Moreover, many African countries hit bottom and rebounded from long periods of civil war and economic decline. And, of course, rapid growth in the advanced countries generally fueled an increase in world trade volumes to record highs. Still, Rodrik is not too quick to dismiss the possibility that some developing economies will become effective engines for global growth. He is, for example, generally pleased to see improved economic governance in the new economies. But, he warns that moments of high growth for sizable economies will remain just that: moments. Read The Future of Economic Growth here .