KUALA LUMPUR, 4 March 2008
Investors need to look beyond the BRICs (Brazil, Russia, India and China) for future growth opportunities.‘The World in 2050: Beyond the BRICs’ concludes that long-term prospects for China, India and other so-called ‘E7’ economies (Brazil, Mexico, Russia, Indonesia and Turkey) are still upbeat, but the report looks for the first time at an additional 13 emerging economies, including Malaysia, that also have the potential to grow significantly faster than the established Organisation for Economic Co-operation and Development (OECD) countries.
China could overtake the US in around 2025 to become the world’s largest economy and will continue to grow to around 130% of the size of the US by 2050. India could grow to almost 90% of the size of the US by 2050. But the fastest mover could be Vietnam, with a potential growth rate of almost 10% per annum in real dollar terms that could push it up to around 70% of the size of the UK economy by 2050.
The report also highlights that there are many other alternatives worth considering, depending on the nature of the investment and the risk tolerance of the investor. Nigeria, while high-risk, has the long-term potential to overtake South Africa to be the largest African economy by 2050. The Philippines, Egypt and Bangladesh also have high growth potential but also high risk levels. Malaysia and Thailand too have strong growth potential due to their solid track records of long-term economic growth.
Malaysia’s challenge will be to remain relevant and competitive against its neighbouring countries. The survey predicts that by 2050, Malaysia’s GDP growth (5.8% per annum) will be just below the E7 average (6.4% per annum). Malaysia should capitalise on its abundant resources - from real estate to palm plantation harvests - to supply the region’s burgeoning industrial and consumer markets.
Our multicultural and multilingual populace, which differentiate Malaysia from its neighbours, are well-positioned to reap the strong growth opportunities fuelled by the rising consumer affluence of Asia.
To realise our aspiration, Malaysia will need to hasten the development of its people, focusing on upscaling the quality of its human capital; growing a culture of innovation; and equipping its workforce with the necessary knowledge, technology and mindset.
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