This is according to ministers, industrialists and academics from the BRICS countries (Brazil, Russia, India, China and South Africa), speaking at the 45th World Economic Forum Annual Meeting in Davos.
“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 of automobile manufacturer, Renault-Nissan Alliance.
He also emphasised the fact that despite the adjustments currently taking place in the BRICS countries, they are all still capable of strong growth.
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Justin Lin, a professor at the National School of Development at Peking University believes that China would have to depend less on exports and more on domestic consumption and investment, but that the government’s strong balance sheet and private savings will facilitate this transition.
“I am confident that China will be able to maintain a seven per cent growth rate over the next five or even 10 years. China will continue to be an engine of world growth,” he said.
Arun Jaitley, minister of finance, corporate affairs and information and broadcasting in India, added that India intends to return to an eight to nine per cent growth rate, and that the recent change in government has led to a mind-set change, both in and out of the country.
“The world is looking at India again. Lower oil prices are helping India’s current account balance and bringing down inflation,” he added.
According to Alexei Kudrin, dean of the School of Liberal Arts and Sciences at Saint Petersburg State University, Russia will have to learn to live with more moderate oil prices.
He also explained that the lower prices have led to the creation of structural reforms and the diversification of Russia’s economy in a way that will benefit the country in the long term.
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Brazil, on the other hand, is returning to the path it had originally begun in 2003, said Marcelo Côrtes Neri, minister of strategic affairs in Brazil. This path is a combination of redistributive social programmes and market-friendly economic policy.
“In Brazil, inequality has fallen, and fallen sharply since 2001,” Neri said.
Nhlanhla Nene, South Africa’s minister of finance, added that Africa’s most developed economy is also taking concrete steps towards rebalancing the economy, while maintaining social programmes.
He emphasised the fact that the government is working to improve the private and public sectors as well as trying to make the state more accountable to its citizens.
“Fiscal restraint is needed at present, but we will continue to develop infrastructure and to protect the poor,” Nene said.