The BRICS economies are in the midst of a midlife crisis as a combination of factors including the failure to implement second-generation structural reforms and their move towards a growth-regime based on state capitalism, says American economist Nouriel Roubini at the World Economic Forum.
"Are the BRICS (Brazil, Russia, India, China and, its most recent member, South Africa) in the midst of a midlife crisis? Based on recent data, this would appear to be the case," said Roubini, who anticipated the collapse of the US housing market and the global recession which started in 2008.
The economist said in the World Economic Forum blog that China grew at a rate of over 10 per cent for 30 years but its growth rate has now slowed to around 7 per cent, and it may fall further.
Talking about India, he said the country grew rapidly earlier this decade but its growth rate slumped to 5 per cent in 2013 and may only modestly pick up this year.
The other BRICS are even "worse": in 2013 growth was 2.5 per cent in Brazil, 1.3 per cent in Russia and 1.9 per cent in South Africa, Roubini said, adding that this year things will not be much better.
"Three of the five BRICS (Brazil, India and South Africa) are now part of what investors consider the Fragile Five emerging market economies (the other two being Turkey and Indonesia).
"These fragile emerging markets share weaknesses, such as large current account deficits, large fiscal deficits, falling growth, rising inflation and political and policy uncertainty, and they all face parliamentary or presidential elections this year," he said.
Listing out major reasons behind the problems affecting BRICS, Roubini -- professor of economics and international business at New York University -- stated the countries failed to implement second-generation structural reforms that are more micro-based and boost productivity growth.
"As a result, their potential growth rate has fallen."
Secondly, not only did these economies fail to implement market oriented reforms, they moved towards a growth regime based on state capitalism, wherein there is an excessive role of state-owned entities