Ben Aris in Istanbul -

On the sidelines of October's IMF meeting in Istanbul, Jim O'Neill, head of research at Goldman Sachs, is holding court, surrounded by a buzz of journalists keen to talk to "Mr BRIC," the man who predicted in 2001 the big four economies of Brazil, Russia, India and China would emerge as the largest in the world within the next 20 years.

Before the crisis, the BRICs were seen as a trendy investment theme that made investors good money if they were lucky enough to invest in a non-crisis year. There was even talk more recently of adding a new country to the quartet, Indonesia, which has been growing fast, and appending the anonym to BRICI (or iBRIC if you want to be really trendy - the term, after all, is little more than a marketing tool for equity salesmen).

But things have changed since the financial world went into meltdown in September 2008. The G20 has replaced the G8 and countries like China and Russia have been promoted to the top table as key partners in global efforts to jumpstart the world economy. Still, O'Neill says that the West still hasn't dropped their prejudices to what is still widely referred to as the "emerging markets."

"The global approach to the international crisis is coming from a western perspective; Asia is still growing," says O'Neill. "The crisis made obvious to all the interconnected nature of the global economy and the fact that it is not dominated by one player so we now have to work together."

Relevant again

The International Monetary Fund (IMF) has also been prompted. After eight years of boom, the IMF was looking obsolete, but the collapse of financial systems around the world shoved it back into the frontline and its stand-by agreements are back in fashion as the must-have financial accessory for many developing economies.

At the Istanbul meeting, IMF chief Dominique Straus-Khan said that going forward his institution wants to play a new role as a super-national central bank that will pool currency reserves of countries that run large surpluses - China and Russia are both in the top five cash-richest countries in the world - and will implement the decisions reached by the G20 heads of leading countries.

O'Neill is positive on this development. "The crisis is good for the world, as the solution will have to be done on a global level. We got into this mess in the first place as everyone was focused on the US consumer before. Now we need to develop a more balanced approach that takes in the economies of the whole world. We wouldn't have had this crisis if it weren't for the bubble in the US housing market."

China, India and, to a lesser extent, Brazil have come through the crisis smelling of roses, but not Russia, leading some to suggest that the "R" should be removed from BRIC. "All this talk about removing Russia from the 'BRIC' is ridiculous. It will still grow, but of course it has specific problems and it will not grow as fast as China," says O'Neill. "Russia has faced the biggest challenges of any country during this crisis because it had such high leverage and it was so dependent on oil - both these things collapsed."

O'Neill goes on to say that the basic investment story for Russia hasn't changed and on several occasions says that investors and international financial institutions are not paying enough attention to the positive aspects of the crisis. The Kremlin was wrong-footed by the global collapse, but it came at a time when it was losing its focus on the need to reform - a need that has just been underscored in the most dramatic way possible. "Russia needs to change its model and the elite say they want change, but to change will be hard," says O'Neill. "But ongoing growth in all these countries means that over 100m have been lifted out of poverty even now. The West is preoccupied with its own problems and has lost sight of what is happening elsewhere. Things look bad now, but in a few years we will look back and see this was a defining moment in the ongoing shift of economic power to the east."

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