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BRICS underestimated by western economies
March 6, 2013, 11:14 am

Mr O'Neill said Britain should be wary of sidelining the BRICS while pursuing trade with Europe [Getty Images]

Mr O’Neill says Britain should be wary of sidelining the BRICS while pursuing trade with Europe [Getty Images]

Former Goldman Sachs chairman and noted economist Jim O’Neill has said that western economies still underestimate the scale of growth of the BRICS.

Together with the next four big emerging market economies of Indonesia, Mexico, Turkey, South Korea, Mr O’Neill sees the BRICS as the key movers in world economy.

“This decade, those eight countries will contribute as much to the dollar value of world GDP as that of the US and euro area put together, twice,” he said.

“So in the context of what’s really going on in the world, the surprisingly strong showing of the Five Star movement in the Italian elections, the shenanigans known as Washington; these are not for manufacturing exporters the key things that matter in the world, it is the emerging market economies.”

He asserted that Britain should beware sidelining the BRICS while pursuing trade with Europe, arguing that by the end of the decade, Britain’s trade with the BRICS countries will account for 17 per cent of the country’s total exports.

He was speaking at the EEF’s National Manufacturing Conference 2013 at the Queen Elizabeth II Conference Centre in London.

Mr O’Neill had coined the “BRIC” acronym 11 years ago.

He told the EEF conference in London, that while Europe will remain Britain’s biggest export destination, the country could not “afford” to maintain the links at the expense of emerging markets.

When asked if Britain should leave the European Union, Mr O’Neill said that membership could hinder opportunities with emerging economies.

“Given the speed of the growth of China and others, I don’t think we can afford to have our opportunities constrained by decisions that may be taken to ensure the United States of Europe,” he said. “It’s a trade off and it’s less clear than it used to be.”

He argued for Britain boosting trade ties with the BRICS even as calls for stricter immigration control have been gaining ground.

“While our position with EU and eurozone is of number one importance, we should not get blindsided as that being the key thing for our export future. Our big future for exports this decade… is going to be other parts of the world, particularly China.”

Mr O’Neill warned Britain against rushing ahead with tighter controls on immigration.

“Having a rising workforce helps economic growth. There are sensitivities surrounding immigration, but we should be careful not to cut that off.”

Source: Agencies


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