The 2012 Jno. E Owens Memorial Foundation Conference on Thursday brought together scholars and economic policy experts to discuss whether emerging markets will continue to boost world growth.
The keynote speaker, Anne Krueger, spoke during the conference luncheon at the Meadows Museum about the emerging economic markets in Brazil, Russia, India and China; together known as BRICs.
The history of emerging markets “has caught the attention of the world over the past decade or so,” Krueger, who is Professor of International Economics at Johns Hopkins University, said.
She said that the BRIC nations were not originally predicted to grow as rapidly as they have.
“There are likely indeed other countries that will emerge and grow rapidly over the next several decades,” Krueger said.
However, she said that determining which countries those would be is nearly impossible to do.
“You don’t know who will be next,” she said.
Today, BRIC is still poorer per capita than the U.S.
Krueger said the BRIC nations are still growing rapidly and that their share in world trade has risen significantly. However, income differences still exists even between BRIC nations. India and China are much poorer than Russia and Brazil.
Krueger said China’s per capita income “hasn’t come close to the industrial countries.”
Of the BRIC nations, Brazil has the second highest per capita income compared with Russia, which has the highest.
However, she said that the Russian population has fallen in recent years and that it’s hard to determine what the effects will be.
India, on the other hand, has the lowest per capita income of the BRIC states, according to Krueger, but has grown more than any other country within the past decade.
“India potentially has demographic dividends over the next few decades, but to benefit from that, major market reforms are needed,” she said.
Each of the BRIC nations face a number of challenges going forward.
Krueger said that China faces a demographic challenge because the number of people in the labor force is falling. She also said there is evidence that the Chinese are wasting their government investments.
Russia faces the challenge of removing its Soviet era legacy. Brazil, she said, needs financial liberalization, and India must find the political will to carry out the major reforms necessary in the bureaucracy to improve infrastructure.
An overall growth of BRICs markets in the future would yield a boost to the entire international economy, she said.
