UK exporters must seize BRICs growth opportunity
The chairman of Goldman Sachs has called on exporters to focus on high-growth economies
British exporters must "immerse themselves" in the
huge opportunities presented by the fastest growing economies over
the next decade, according to Jim O'Neill, the chairman of Goldman
Sachs Asset Management.
Mr O'Neill, who coined the term BRIC a decade ago to represent the high-growth economies of Brazil, Russia, India and China, said the expansion of a new middle class meant it was no longer acceptable to refer to these countries as emerging economies.
He told the CBI Annual Conference that eight high-growth economies, which also included Indonesia, South Korea, Mexico and Turkey, would create additional economic growth of $15-20 trillion. Their contribution to global growth will be more than double that of the United States and the euro area.
If these economies repeat the 15 per cent annual growth in imports over the last decade over the next 10 years, that would translate into a rise in imports of $3-4 trillion to the BRICs alone. However over the last decade UK exports grew just 3.5 per cent a year.
"In order to seize the scale of the opportunity out there, UK export growth does need to accelerate and that means focusing on the BRIC and growth economies," he said.
Mr O'Neill said the growth in the size of the middle class in these economies was "probably unparalleled". "We are currently witnessing on a global basis the biggest rise in the middle class that there has been for centuries."
He forecast that the next three decades would see the creation of 3 billion new members of the middle class with incomes of $6,000 to $30,000 a head around the world.
"Any country that immerses itself in providing what these people want are likely to do rather well."
Mr O'Neill told delegates that opportunities for foreign direct investment were "immense", especially for sectors such as financial services, which would benefit from the UK's advantages of its timezone and the English language.
"It is really not socially appropriate to be thinking of these places in the way many people have done over the last three decades and label them as emerging markets," he said. "It is certainly not very sensible in terms of business."
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