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<b>Letters: </b>Rising BRIC

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Business Standard New Delhi
Last Updated : Jan 29 2013 | 3:14 AM IST

In your article, ‘BRIC shoppers can’t hold off world recession’, December 21, Alexandre Marinis has made some extraordinarily pertinent observations that observers of the current economic scenario need to consider carefully.

Nevertheless, it needs to be pointed out that if Marinis had assumed that the three leading economies, viz, the US, EU and Japan will contract by 1 per cent (or even 1.5 per cent) in 2009, he would have found that growth in the BRIC nations may be able to compensate.

While investors do become more risk-averse during economic crises, Marinis’ assumption that the “flight to quality” of investments necessarily means a flight to developed economies may have already started to lose validity. In the end, the question is not how much funds any enterprise (or even nation) is able to raise and at what cost, but what returns it can generate on that investment.

This is where the dice is increasingly loaded against the developed economies and it is hard to see how their competitiveness can be sustained. The workforce in developed countries draws so much more pay and benefits that it is becoming increasingly difficult for them to maintain their competitive edge over even the less trained, less disciplined and less technologically equipped workforces of developing nations.

Alok Sarkar, Bishnupur

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First Published: Dec 23 2008 | 12:00 AM IST

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