Speakers discussed how Brazil, Russia, India, China, and South Africa are preparing for their sixth Summit of Heads of State to be held in Fortaleza, Brazil, in July 2014. Discussion examined the economic performance of BRICS amidst growing skepticism toward emerging markets and the potential convergence between advanced and developing economies. Panelists also weighed in on the prospects for the BRICS Development Bank and what these five nations should accomplish in order to increase their economic clout and further contribute to global growth
Marcos Troyjo, Co-Director, BRICLab-CGEG and Adjunct Professor of International and Public Affairs at Columbia SIPA, gave the welcome remarks and introduced the panelists: Otaviano Canuto, Former Vice President and Senior Adviser of the World Bank; Ivan Isakov, Managing Partner, Crown Point Equity LLC; Ann Lee, Adjunct Professor of Economics and Finance, New York University. Loy Pires, Senior Manager, International Finance Corporation, World Bank; Atsi Sheth, Vice President and Senior Credit Officer, Moody’s Sovereign Risk Group and Fernando Sotelino, Adjunct Professor of International Banking and Financial Institutions, Columbia SIPA. All the speakers coincided on the need of BRICS countries to have a specific agenda and institutions based on common interests.
Octavio Canuto discussed on BRICS growth opportunities, the relationship between technology productivity, the emerging middle class and the commodities prices. “Middle-income countries seeking to reach the next stage of development can no longer simply import or imitate existing technologies or capabilities; they must build their own. This requires a robust institutional framework – including, for example, a strong education system, well-developed financial markets, and advanced infrastructure – that encourages innovation and can support complex supply chains”. Later, Fernando Sotelino focused on what he considered the most critical milestone in economic development for any emerging economy: a functional financial system, capable of provide long term credit in domestic currency and affordable interest rates.
Atsi Sheth began his presentation asking: “800 million people are eligible to vote in India. What has the government to do to aggregate their interests?” According to Sheth, India is vulnerable but does have some hidden advantages; its outlook depends on policy measures. “For India, growth is not automatic. Macroeconomic balance must be maintained. Infrastructure and human capital have to be improved” she asserted. Thereafter, Ann Lee pointed out that China has developed a huge industrial base as well as strong trade ties with countries all over the world. “Surpassing the U.S., China became the most trading nation in the world”, she indicated. Lee also remarked that China's reserve currency is able to give credibility to the proposed BRICS development bank.
Ivan Isakov discussed on the governance challenges that Russia should face to diversify the economy: “Even if the balance sheet is still strong, slow GDP growth numbers will go up only if Russia improves its rule of law and institutional environment” Isakov said. Similarly, Loy Pires asserted that BRICS countries that do well will have their people asking for more governance and transparency. Pires also highlighted the flourishing of BRICS private sector, the income effect and the strong demands coming from the emerging middle class. According to him, growth opportunities for BRICS will depend on changes in the working population of these countries, percentage of people moving to the middle class, and willingness to reform.”
Dariela Sosa
CGEG Research Assistant
