Sberbank, it would seem, may be of the mindset that that all great ideas begin with a great acronym. A new report released by Russia’s largest lender today has suggested that Belarus, Ukraine, Russia and Kazakhstan, or BURK, could be a new economic force to be reckoned with (a sort of eastern antidote to the EU’s debt-laden PIGS or a young lodestar within the BRIC’s vast spread?) The choice of acronym will provide the British media with ample opportunities for derisive headlines; some analysts contend however that the notion of this grouping is far from preposterous. AFP introduces the concept:
Sberbank coined the peculiar acronym for Belarus, Ukraine, Russia and Kazakhstan to put the four heavyweight ex-Soviet economies into a group rivalling the BRIC union of Brazil, Russia, India and China.
The state-run institution admits that BURK’s combined markets account for little more than three percent of the world’s gross domestic product and that its transparency record is not great.
But it argues that the vast region shares similar problems and could follow the same prescriptions to achieve growth similar to what Asia and Latin America have been witnessing for much of the past decade.
And to that end, the 170-year-old bank issued a novel report entitled “The BURK Countries. 2010 Results and 2011 Prospects.”
The report’s authors — including the bank’s Macroeconomic ResearchCentre Director Ksenya Yudayeva — conceded that their term may not havethe same ring as the BRIC acronym coined in 2001 by an analyst atGoldman Sachs.
They brushed aside snickering comments and argued that the English word actually means “a very firm lump of solid ore.”
“By this, we mean to say that we do not expect the necessary reforms inthese four countries to follow a smooth course,” said the study.
“Quite the contrary, these reforms will encounter significant resistance — both political as well as administrative,” it said.
The report went on to admit that the group of nations that Russia ishoping to bring into a closer union faces an uncertain future whoseoutlook is only “moderately optimistic”.
“The uncertainty level is very high,” it added. “But this makes work andadopting business decision here all that much more difficult andinteresting,” it concluded.
Unfortunately, the report was not received in Moscow with the level of seriousness its authors might have expected.
Some of the criticism was obvious. After all, there is little disputingthat BURK sounds disturbingly similar to the British English word “berk”– slang for a fool.
“This is amusing, but in the wrong sense,” ING Wholesale Bank chief economist Rob Carnell told the Vedomosti business daily.
“I doubt that you would really want the term BURK to become too popular,” he added.
Others saw the wrong kind of economics behind Sberbank’s decision to invent a new term.
“I think this is probably related to Sberbank’s own (expansion) strategy,” said Renaissance Capital economist Ovanes Oganisyan.
“Sberbank has already made acquisitions in Belarus and is preparing tomake more in Kazakhstan. I think that this will be their strategy –coining this term before continuing their expansion into EasternEurope.”
The Russian bank essentially admitted as much by noting that it pickedthe three other nations because they “have a Sberbank presence.”
Read on here.