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The BRICS economies already account for more than 25 per cent of global GDP and the collective middle class for these emerging powers is expected to grow from 800 million in 2010 to over 1.6 billion by 2020.
“To build a new global economy” is the theme of this year’s forum.
The participants of the session debated whether income growth stimulates transparency and generates accountability, with the BRICS countries being held up as a case in point.
“At low income levels corruption is a bigger problem. All countries with lower income including India have a significant problem with corruption. But as countries get richer they demand transparency” said Charles Robertson, global chief economist with Renaissance Capital.
“We’ve seen big corruption scandals in India over the past years. In China, the middle class is even stronger, but also wanting to reduce corruption. And there is also a strident anti-corruption campaign in Russia,” added Robertson.
There are currently 1.8 billion people considered as middle class, and their income ranges from $10 to $100 a day.
This phenomenal rise in economic, and increasingly political clout, is not only impacting key macro-economic factors such as access to commodities, capital flows, resource management, and purchasing power, but it is also redefining political dialogue, social welfare systems, education, and culture on a global scale.
The International Monetary Fund (IMF) expects over three billion people to be defined as middle class by 2020, and over five billion by 2030.
Asia is expected to witness the largest growth in its middle class.
But there should also be “the right balance between the role of state and the role of the private sector,” said George Magnus, an expert on emerging markets.
The 17th St Petersburg International Economic Forum (SPIEF), which will be attended by thousands of economic experts, business managers and political leaders, opened on Thursday morning.
By Daria Chernyshova in St Petersburg, Russia for The BRICS Post