BRICS capable of strong growth: WEF panel
January 23, 2015, 5:32 am

Job growth for the Chinese economy was 13.2 million jobs last year, in excess of the government target of 10 million [Image: WEF]

In a session debating the economic outlook for BRICS countries, participants discussed the near- and long-term priorities of BRICS in the context of their trade and investment partnership.

“We continue to invest in all these countries, because we invest not for the next two or three years, but for the next 10 or 15 years,” said Carlos Ghosn, chairman and chief executive officer of Renault-Nissan Alliance. Ghosn emphasized that despite the adjustments currently taking place in the BRICS countries, they are all capable of strong growth.

Peking University economics professor Justin Lin said China would have to depend less on exports and more on domestic consumption and investment, but the government’s strong balance sheet and high private savings would facilitate this transition.

“I am confident that China will be able to maintain a seven percent growth rate over the next five or even 10 years. China will continue to be an engine of world growth,” Lin said.

Meanwhile, South African Finance Minister Nhlanhla Nene said the “message that SA & Africa are open for business is resonating widely with all participants” at Davos.

“South Africa will host the BRICS Bank African office to ensure funding priorities in Africa are aligned to development objectives,” said Nene. The $100 billion BRICS Bank stems out of a two-decades long process of greater economic engagement by and among developing nations.

Meanwhile, President Jacob Zuma played down fears of a negative impact on the African investment climate owing to the militant Islamist group Boko Haram – which has caused havoc in parts of Africa through a wave of bombings, assassinations and abductions.

“There are issues that have arisen since the fall of (former Libyan ruler) Moammar Gadhafi in particular, because that tended to undermine the security in the northern part of Africa. Boko Haram is part of what happened there,” said Zuma.

At the session, Indian finance minister Arun Jaitley said India intended to return to an eight to nine per cent growth rate.

“The world is looking at India again,” he said. Lower oil prices were helping India’s current account balance and bringing down inflation, Jaitley added. The Indian government, however, is scrambling to contain the fiscal deficit at 4.1 per cent of GDP in the fiscal year ending March, after a sharp shortfall in revenue that forced it to rein in spending.

Marcelo Côrtes Neri, Minister of Strategic Affairs of Brazil, said Brazil is returning to the “middle path” it had originally begun in 2003: a combination of redistributive social programmes and market-friendly economic policy. He added that the country’s recent slow growth has not prevented impressive social achievements. “In Brazil inequality has fallen, and fallen sharply, since 2001,” he said.

Russia’s Former Finance Minister Alexei Kudrin said lower prices were obliging Russia to make structural reforms and diversify its economy in a way that would benefit the country in the long term.

“Russia will have to learn how to live with more moderate oil prices,” said Kudrin.

 TBP and Agencies