Brics will see slower growth without political reforms, report says
Brazil, Russia, India, China and South Africa are urged to focus on creating competent and stable political institutions and improving their education, health and judicial systems
The world’s five emerging economic powerhouses will experience significantly slower growth if they delay in implementing key political reforms, according to a report released on Monday by Germany’s Bertelsmann foundation.
The report said the five BRICS countries — Brazil, Russia, India, China and South Africa — must focus on creating competent and stable political institutions and improving their education, health and judicial systems in order to achieve sustainable growth.
Brazil, which the report says has halved incidences of extreme poverty and moved 20 million people into the middle class in the last decade, was called “the most promising of the BRICS states” because of its institutional reforms and infrastructure improvements.
The “worst-performing” country in the comparative study was Russia, which suffers from “a unilateral economic strategy, patronage and the lack of involvement of civil society.” It said Russia must diversify its economy by overcoming its reliance on natural resources.
The Bertelsmann report, titled “Sustainable Governance in the BRICS,” said the results for China were “ambivalent” as the country grapples with problems related to demography, social inequality and pollution. India too is plagued by “enormous regional and social imbalances,” as well as infrastructure shortfalls and widespread corruption, which hinder growth.
The report lauded South Africa for its economic stability, reduction of state debt and strengthening of social welfare policies, but said it held a “middling” position within the BRICS, due in large part the poor performance of its education system and labour market. It has the highest level of social inequality in the grouping.
The five countries are home to 42 per cent of the world population and make up some 18 percent of global gross domestic product (GDP). Goldman Sachs, the investment group that coined the BRICS acronym in 2001, forecasts the countries to account for some 40 percent of global GDP by 2050.