A second look....

• Author: Bremmer, Ian
• Position: A World Without the West - Brazil, Russia, India and China

SINCE A team of Goldman Sachs economists popularized the term "BRICs" (Brazil, Russia, India and China) in October 2003, this group of emerging-market countries has assumed ever-greater importance in the international investment community's collective imagination. The Goldman Sachs analysts argued that, with sound political leadership and a bit of luck, these four economies could outpace the original G-6 industrialized nations in dollar terms by 2040--a profound shift in the world's economic balance of power.

Yet, the political factors that help drive economic policy in these countries differ in crucial ways, undermining any notion that they carry collective weight as a coherent economic bloc. Their growth stories (thus far) are impressive. But the sorts of future risks they will face reveal that they have much less in common than meets the eye.

Her Name is Rio

FOUR YEARS ago, when Luis Inacio Lula da Silva became Brazil's first elected "leftist" president, many feared he would renege on pledges to pursue disciplined economic policy at the first sign that profligate social spending would boost his popularity. Some worried that he would follow the lead of Venezuelan President Hugo Chavez and throw Brazil's economic liberalization into reverse. None of that has happened. Lula is known as a "leftist" mainly because he made his reputation as a tough-minded labor negotiator. But he also understands the value of compromise and of keeping his promises. Lula is a pragmatist and deal-maker, not a Chavez-style ideologue.

The Brazilian president has, for the most part, successfully balanced the need to raise living standards for Brazil's poorest citizens with the demands of responsible economic policy. Since he was first elected in 2002, the state has made its debt repayments on schedule. The economy has generated more than 4.5 million new jobs. Trade surpluses top $40 billion per year. The lowest inflation rates in decades and an expansion of consumer credit have bolstered the purchasing power of millions. Many among the rural poor receive small but badly needed monthly payments from the state in exchange for keeping their children in school and ensuring they are properly vaccinated.

Brazil has come a long way over the last half decade. The variables that now determine how fast Brazil's economy will grow and how much foreign investors can earn there have more to do with economic reforms, inflation, growth forecasts and fiscal policy than with risks of serious political instability or debt default. In these ways Brazil is unlike Argentina in the 1990s in that it has acknowledged the importance of not just paying its debt but also paying it on schedule. In that sense Brazil is well on its way to graduating from emerging-market status. It is no longer simply an eternally promising Latin American economy.

Among the BRICs, Brazil may seem an odd choice for best bet. It has by far the lowest average growth rate of the four countries, driven by a tax burden of nearly 40 percent of GDP and torpid reform projects. But the transformation of Brazil's political left, a domestic political consensus in favor of disciplined and...