Russia and China are the most attractive BRIC countries at the moment, according to Jim O’Neill, Chairman of Goldman Sachs Asset Management.
The man who coined the term BRIC in 2001 when he was Goldman's head of global economic research to describe the fast-growing economies of Brazil, Russia, India and China told CNBC at the St Petersburg International Economic Forum (SPIEF) that India still looks "relatively expensive."
"China and Russia are really interesting," he said. “China’s trying to deal with everybody, that’s why China is so interesting.”
Russia’s demographics are often cited as a barrier to its growth. The birth rate is one of the lowest in the world, while life expectancy is lower than the developed world, and the population is slowly shrinking.
This trend may be shifting, according to O’Neill, who said that Goldman Sachs is forecasting a population decline for Russia over the next 20 years, but added that that could change.
Corruption Crackdown
Russia’s attempted crackdown on corruption has been one of the key discussion topics at SPIEF.
President Dmitry Medvedev, who is trying to improve Moscow’s international reputation in an effort to turn the city into a greater financial centre, ahead of elections next year, seems determined to change the situation when addressing the forum, O’Neill said.
“He was more specific than he usually is about changing things. He itemised six specific policy steps that are going to be introduced," he said. “He was expressing a determination for doing quite a lot about it."
“He sounded a lot like a guy that was going to be around for a while,” O’Neill added. “This is the one thing that everyone has been talking about.”
O'Neill is confident that Russia can diversify beyond its current strength in commodities.
“In technology, Russia is actually pretty strong. They are now talking to us in a positive, creative way. In social content and the internet they’re some of the best around the world,” he said.
“Over the last three years, Russian policy makers have realised something has to be done,” O'Neill added.