 Well, good afternoon everyone. Thanks for being here and welcome. This meeting is going to be broadcast, this discussion is going to be broadcast to Brazil and will become a television program. So when we reach the level of questions from the audience, at the end I would ask you to wait for the microphones because not only is the only way to register the sound, but also the simultaneous translation will require the microphone to catch your voice. My name is Silvio Bocanera. I'm a Brazilian journalist. We're doing this for Global News, Brazilian television. We have a very interesting discussion ahead of us. The topic as has been given to us is are the bricks in a mid-life crisis? That is the big question. It refers, of course, to the reduction in the growth of GDP in all the countries of the of the bricks. The bricks are no longer the darlings of the international investors. There are threats by international agencies to reduce the ratings, the credit ratings of some of the countries. And there's also the new threat of foreign investments pulling out of the bricks as a result of the action of the feds in Washington. The theme of our discussion could actually be are the bricks dead? Are they in life-supporting machines? Can they recover from this mid-life crisis? Let me quote a report launched at Davos here last Sunday by the chief economist of the consulting group IHS, Narima Beravesh. He says, turn out the lights. The bricks party is over. Not very subtle. But is he right? Is the party over? It's been 13 years, as you recall, since Jim O'Neill of Goldman Sachs created the acronym of the Bricks, pointing out that these countries required attention because they were growing quite a bit. The governments of the bricks were smart enough to take advantage of that, that sudden fame and create the group that tried to act together and international forum, even though they had as many differences they had similarities. They still meet as a group. In fact, they're gonna meet in Brazil soon. They're gonna try to match it with the World Cup, so they can watch a couple of matches as well, and see Brazil become the champion. As the bricks slow down, in economic power and prestige, even Jim O'Neill has moved on to another acronym. Now he talks about the Mintz. Mexico, Indonesia, Nigeria, and Turkey, the new stars on the world stage of economic performance. Mintz sounds fresh, sounds like a fresh breath. Bricks sound more solid, but maybe they're crumbling. Interesting metaphors. Which will prevail? We may get some answers here, and you may be able to ask some questions at the end. And you do have a full description of the biography of each one here. It's enough for me to say that we have three ministers of finance, India, South Africa, and Brazil, one deputy prime minister, Russia, and one former top regulator of the bank, the banks in China, now with the Fund Global Institute. No prepared statements from our guests. We're just gonna have a chat, and perhaps I can start with China. China is growing at a respectable rate of 7.7 a year, not bad, but way below the rates of 11, 12 percent of a few years back. And a few days ago, the mega investor George Soros, who is in Davos, who knows, might even be in this room, said he's more worried about China than he is about Europe. Because 20 years of rapid growth in China, in his words, are running out of steam. I would guess that Minister Montague of Brazil, as much as Soros, is also worried because China, after all, is a big client of Brazilian products, Brazilian commodities, mainly. So my first question to the representative of China is, should they be worried? Should Mr. Montague be losing sleep? Thank you very much for the question, and thank you for showing us the concern from Soros, and the the concerns about China's health, health is is something, you know, where it's linking with its growth pace. Because nowadays we witness the growth pace of China's GDP is slowing down. That's the fact. As a visa visa three years ago, it's a 30% down as a double-digit, more than 10% three years ago, and then coming down to nine percent, then seven, seven, eight percent around, and now it's 7.7 percent or something. And this coming year, maybe it could be slowing down further a little bit, but like in line with the performance of last year, more or less the same. But this is the fact, of course, the huge stir worldwide. But the Chinese government and Chinese people, now they reach the consensus. The story behind high-speed development is what? It's create a feud fixed asset investment and export driven economy. What do we get? In the positive way, what we got is just a very marginal fee-based income. And some projects are not economic viable. So we realize what we meant to the Chinese people is pollution. Okay, they created some job, but the pollution is with us, it's part of our life. So we got to change this. So it's our own willingness to reduce the speed a little bit. 30% doesn't matter much. So long as we can keep the speed around 6.9% every year, along to year 2020, still we can really realize our goal. Set by year 2010 that we will double the GDP growth from GDP size of the China, Chinese. So what? 7% is okay for China for the remaining seven years. And we will use that room to maneuver to reduce three things, to do three things. The first, to reduce overcapacity. In line with reduced overcapacity, because most overcapacity industries are heavy industries. Steelmaking, nemperous, shipbuilding and many others, coal mining and so on, so forth. So that is the two stories connected with each other. We can, you know, kill two birds with one stone. The second thing is to reduce the government, local government platform borrowing. It's a huge zest and it ensues them from the localities to pull up the GDP. And they are competing with each other, province by province, which is no good. So the third thing is that by and by we will change our growth model. We will try our best to realize that we reduce the export growth ratio. We will reduce the fixed asset investment ratio. But we will pull up the domestic consumption by pulling up, you know, the productivities. And how we can raise the productivities in China? We will rely upon innovation. We're not relying upon the WTO entry benefits no longer. We're not relying upon the cheap label and cheap land. Now this time is innovation. And how we can realize the innovation to pull up the productivity and raise the income per person so that domestic consumption could be a real story in five years or so, I mean, years by the end of year 2020. We can initially change the growth model. How can we do that? For China specific, we got to have the boldness, the decisiveness to carry out the reform and the opening up. And that showed our determination. So long as we can balance the decisiveness like that with credibility, I think China will move out the problem. So it's a top-down decision to change the model. And it's welcome to buy, but it's a huge country. You know, when all of a sudden you decide on a new model to actually carry it out, it has a lot of risk. What kind of risks do you see ahead? Of course, the profitability will be the profit-growing ratio will be going down. Then performance assets and loans will be rising automatically, OK? Because it's a trade-off. It takes time to realize that goal. So it's actually it's we create something to backfire ourselves. OK, to push us to think about how we can change how we can change the growth model and how quickly we can do that. But during that process, it's a painful, but no pain, no gain, as saying goes. I wonder if Mr. Montague fused more at ease now. Will he sleep well tonight after hearing this explanation? I didn't sleep well last night because the air. So they can get the phones. OK, you can put it on top. OK, I must say I didn't sleep well last night because the heating was too strong in my room. So I woke up at the middle of the night and I was sweating and had nothing to do with China, I must say, because I believe that China and its economy will be revised and reformed. The model will be changed and it will continue to be the most dynamic economy in the world, at least for the foreseeable future in the next decades. I don't think we're facing a midlife crisis. Us, the BRICS, what I see is a world economy crisis that somehow affected the BRICS by reducing the trade volume, by reducing international demand. Now, of course, the world economy and the developed countries that caused the storm are now recovering. But that recovery is gradual and it's the process. And with that recovery, we will likely have a reactivation of trade growth. Trade before the crisis was growing at a rate of six, seven percent per annum. Not talking, not even considering the press of commodities from this point on, I think commerce will again experience a four to five percent growth in the future. It's not going to go back to the levels that we had in the past, but I still do believe that the BRICS will continue to lead that effort in the global economy. But for that to happen, of course, the BRICS will have to be serious about introducing some reforms. In the case of China, the change and the model is already the subject of discussion under G20 discussions. China has a level of overdevelopment, a lot of vital capacity, and it depends greatly on external demand. So the model has to be changed so as to create some more internal demand and thereby decreasing the level of investment or the reliance on investment. We also need to increase investments that are get to more growth in innovation. I think China is coming out of a phase where expansion was based on a model that is now giving birth to a different kind of setup. That will eventually bring about more growth. I think I still do believe that China will continue to grow seven to eight percent over the next decade. It's never going to go back to, you know, 12, 13, 14 percent, as was the case in 2007, the year before the crisis. But I will in the case of India also. Here's another economy that's going to continue to grow and again, not at nine or eight percent, but at six percent, say, which is already a very, very good level in global economic terms. And since it is based on low income, there will likely be a convergence towards medium income and high income. So I believe that in the case of Brazil, change will go the other way. And we're going to go a different way. For a moment there, you said that the countries, the BRIC countries will have to change their models. What change would that be in Brazil? What kind of model would you change in Brazil? Expanding its middle class by more than 400 million, it has reduced poverty, so we have a large consumer market that we have built in recent years. We are the fourth world market in automobiles, third in physicians, and so forth. In order to activate this market, we are lacking credit. Credit is still scarce. And we're not going to be able to do that. We're lacking credit. Credit is still scarce. But most importantly, investment is what is going to drive Brazil's economic growth. And that's why, that's the reason the government is encouraging investment in Brazil. In 2013, investment growth, the investment growth rate was about six and a half percent, compared to the previous year. That was the fastest growth we've had in foreign investment. We've extended a large program in concessions for infrastructure. We've held a number of auctions in 2013. They were very successfully handled. We will have new auctions for oil and gas, highways, electricity. This year we will also be opening bidding to ports, airports, and railways. So we have an extensive program of more than $250 billion worth of investment taking, that's not including the oil and gas sector, which is another large number of billions. So we're going to continue that investment. Investment will continue to grow in Brazil. It is a partnership between the government and the private sector. These are concessions. These are licenses. It is not the government that will perform the work. It is the private sector. But that will bring new investment. We will need foreign trade. We will depend less and less on foreign trade. Now, as with China, we will have less investment and greater growth. The World Economic Forum published its survey of 700 opinion makers around the world a few days ago from businessmen to politicians, bankers, et cetera. And they were asked, what is the biggest risk to the global community in the next decade? Expectations, they would say, a new fiscal crisis, climate change, but they actually said, it's the income gap between the rich and the poor, which is growing, not shrinking. Some of the bricks of particularity are vulnerable in that area. Brazil is, India is, South Africa. So I would appreciate if you give your evaluation of this conclusion of the highest risk. Well, that's a risk. Income inequality and middle class stagnation are risks to every country in the world. In the US, I'm told that real wages have been stagnant for the last 20 years. In the UK, wages have risen slowly, more slowly than inflation. So I think this is true of many countries. In developing countries, the early winners of development, the early winners of high growth, are the well to do. But that doesn't mean we are not lifting millions of people who are below the poverty level above the poverty line. China has lifted about 500 million people above the poverty line. India has lifted 150 million people above the poverty line. So while there is income inequality, and we must address that, we must also recognize that people at the very bottom of the pyramid are being lifted upward. In India, for example, rural wages have grown in real terms at 7% a year over the last five or six years. Which is one of the reasons why food inflation is high, one of the reasons. So I think there are several forces at play. We are concerned about income inequality. We would like to tax the rich a little more. But since we need capital to be formed in the hands of the entrepreneurial class and we encourage them to reinvest the capital, we are going slow on that. But as long as we're able to lift a large number of people above the poverty line, I think we are doing reasonably well. In this issue of the changing the model in order to grow more, what's India doing to try to reach the levels of the past or close to it, go beyond the levels of today? You see, our growth declined firstly because of external environment and secondly because of some decisions that we took and some decisions we did not take. But in the last year and a half, we have acknowledged that we need to be more decisive. We need to move forward at a rapid pace. And the results are there to see the economy has stabilized. Investment is back both for indirect investment as well as domestic investment and the global economic outlook prediction for India for calendar 2014 is 6.2%. I have predicted that in calendar 2014, which is more or less the same as our financial year 2014-15, nine months of this calendar and three months of the next calendar, we will grow at 6% plus and next year we will grow at 7% plus and the year after that we will achieve our potential growth rate of 8% plus. In the worst year, our savings to GDP was 30%. In the best year, it was 36%. Even today we are saving about 32% of our GDP. So I think if we avoid some of the mistakes we made, and if we are more decisive, if we are able to implement the kind of single-mindedness with which say China, Japan implement their projects, we will get back to high growth. I have no doubt in my mind in three years we'll be back to 8% growth. Minister Gordon, South Africa also suffers from this problem of inequality brought out in the foreign report. Many political and economic analysts actually took advantage of the recent events in South Africa of the death of Nelson Mandela to bring out the fact that 20 years after the end of apartheid, that gap is still very high. What has been done to change that and what needs to be done to change that? The gap is still there, but I think any review of the last 20 years will tell us that there have been formidable changes in South Africa. None of the countries at this table had an iniquitous system like apartheid to overcome. So the last 20 years I've seen the per capita income grow from 27 and a half thousand runs to 36 and a half thousand runs. Our economy grow two and a half times in nominal terms. Disposable income has grown about 40% during that time. If you look at services to South African citizens who were historically excluded, both economically and socioeconomically, we've built three million houses in this period. Access to portable water has gone up from 50% to close to 90% and those figures replicate themselves in other areas as well. In the last few years, our social wage in South Africa is about 57% of our non-interest expenditure. So overcoming 300-year legacy of colonialism and apartheid is not going to be done in 20 years. And I think we have some illustrious examples in this panel of countries who've tried different things to all achieve the same objective. We want all of our people to have a better life. We want all of our people to have decent jobs and incomes. We want all of our economies to be competitive and I think over time we will certainly get there. As Mr. Montego pointed out, this financial crisis that did a huge amount of damage to all of our economies wasn't of our own making. It came from the financial centers of the world, particularly the United States. Up to 2008, South Africa was growing close to 5% for several years. Growth dropped, we've recovered somewhat, but now we have to confront another set of structural challenges that come with our past and with the present as well. So we need to diversify our economy. We need to build a more skilled workforce. We need to overcome some of our constraints in respect of energy and logistics, all of which are either being done or in very advanced planning stages. In the next few years, we'll see us both increase our potential growth but also reach our potential growth as well. And most of the Africans have been lifted in the last 20 years above the bottom three tiers of the LSM measure that we use in South Africa to a lower middle class level than ever before. And that progress will continue as well. Do you see a major risk factor coming up in something that is happening in other countries as well, that breaks elections, elections coming up this year? Do you think that will put this project in jeopardy in any way? Not at all. I think the ruling party, the African National Congress, Mr. Mandela's organization has always enjoyed more than a 60% vote from South Africans who understand that this is the only organization that can and has the determination to overcome all of these legacies that we are talking about. So there's no doubt about the outcome of the elections. There might be a percentage point this way or that way at the end of the day. If we move on to Russia, President Putin made a speech in December. Very critical of the economic performance of Russia. Growth of 1.3% last year, forecast 1.4% for this year. In his own words, the main reason for the economic slowdown are not external, but internal. So let's take the lead from President Putin. What were those internal reasons? Thank you. Ladies and gentlemen, thank you for inviting me here to the discussion. It's very simple, business environment. It's not good enough. The business environment overall in the world? In Russia. I'm talking about Russian rules. There are some external reasons as well. Our major trading partners are Europe and China. If Europe is almost in recession and China is slowing down a little bit, it's natural for Russia to slow down a little bit. But main reasons are internal. Our saving rate is also 30%, but investment rate is only 20% even less than that. 10% are not being invested from savings. People don't want to invest more than they do. And with such investment rates, you cannot have growth higher than 2% per annum. That's the reality. And the only thing we can do about this is to improve business environment. And we started doing this, but this will bring effects in the medium term perspective not immediately. As people will need time to be persuaded, they need to believe that it is not just for one year. It will be continued. We moved more than 10 positions in world bank rating doing business. And now we are first among the BRICS countries in this rating, but we are far below all major economies. We are number 92. Only. And long way to go to number 20 that we want to have in 2018. Is it the Russian business community you're concerned about or the foreign business community? No, that's both foreign and Russian business community who are being asked about various aspects of business environment. The same being done in India, China, South Africa and Brazil. And our scores are not good enough and we need to improve a lot. Some of the things are not really important for growth in this rating, but some of the things are really crucial like bureaucracy, red tape, speed of getting all the permissions, access to finance, things like that, especially for SMEs and this is what is important. And if we are talking about those extra investments, there are two things that are crucial. First innovation, investments should be linked to modern technologies. Otherwise, if you invest in the old stuff, I don't think we'll be competitive. I don't think we'll win a competition. And the second thing, we should substitute old inefficient jobs by new efficient jobs. So it's not about adding more jobs. It's about month by month, quarter by quarter, year by year substitution of old by new. When you talk about the need for investment... You said about the need for investment. It's similar to Brazil, that Russia invested colossal amount of money in Olympic games, the number that is called 50 billion dollars, how Brazil spent it, spent it on World Football Championship. So the criticism is, why do you spend so much on sports events? Allow me to mention some of the collectives. 7 billion dollars was invested for the construction of other sports buildings. 40 billion was invested in infrastructure. Not Olympic objects, but roads, railway roads, line of transportation, electric transportation, hospitals, and so on and so on. Everything depends on the life of people in Sochi. And we actually created a modern resort. The resort is not only for Russia, but for the whole world. That is, all these investments are productive. It was made not only for the sake of sports associations, but also for the country. And it also provided a significant increase in GDP in recent months. Mr. Minister, I have a question for you. Maybe we will put on headphones. Our colleague just mentioned the infrastructure investment. The criticism in Brazil has been that the investments made in Sochi are not as heavy as the infrastructure in the state of the world, wasting money based on the criticism. And demonstrations in the streets of Brazil last year had that specific focus. You're spending too much money on football tournament when the country needs infrastructure. What can you tell us about that? Well, precisely, most of the resources are being spent as in Russia, in urban infrastructure. Therefore, they are necessary improvements because we need more metros, more highways, means of transport, etc. So, only one part is being invested in the construction of the stadiums. The federal government is only financing, giving financing because it is the states or the private initiative that is spending to make the stadiums. And we believe that there will be a benefit for the population. And that the Brazilian population wants the World Cup in Brazil. The research shows that the Brazilian population likes football, wants the World Cup. And therefore, it's... They're happy about it, and everybody is pretty much aware of the fact that on the side we're also going to have a lot of investments. Wait a little bit for the translation. I'd like to come back to India on a separate question. It has to do... There's a big discussion going around the world. It's been going for many years, but it's got intensive... when you talk about the BRICS as well, which it has to do with state intervention in the economy. You're all economies where the state has a heavy percentage of intervention. Do you think, in the case of India, this state is just too dominant to the point of creating some form of lethargy and hurting the economy? Well, I don't think so. I think the new space that is being opened up is substantially or almost completely occupied by the private sector. The state can't be dismantled overnight, nor should it be. What happened when U.S. banks and European banks were in a crisis? The state took over the banks. So why do you deny that the state has a role to play? Take our banking industry. We've got government-owned banks. We've got Indian private banks. And we've got foreign banks. And we have promised to license more private sector banks in the next couple of months. So I think there is a role for the state to play and to wish away the role of the state in a developing economy is unwise and wrong. Likewise, we have public sector companies engaged in steel. We've got private sector companies. We have public sector companies producing automobiles. We have a private sector companies producing automobiles. We don't have a public sector company. We have one public sector airline. So I think as long as the public sector company is competitive and is run on commercial principles, there's nothing wrong in having a public sector company. And there's no reason to dismantle it. There must be a reason to dismantle a public sector company. But as I said, the new space that is opening up is almost completely occupied by the private sector. I'd like to ask you about what we raised in the case of South Africa, the upcoming election. The risk factor certainly much bigger than in South Africa in the election coming up in India. What can you tell us about that? South Africa is in the happy position of a dominant political party dominating the political scene for the 20 years. So did the Congress party in the first 30 years. But since then, we've had other political parties. It's too early to predict the outcome of the election. We have not had a single party with a clear majority since 1991. It's most likely that the next government also will be a coalition government. Now, who will lead that coalition government? I'm unable to say. But if you ask me for my preference, I'm ready to say that. In the case of China and another subject, you touched upon it in your first answer. International analysts are saying that the Bank of China is flooding the economy with excessive money supply and that there is too much credit. That's the criticism. Perhaps even a credit bubble such as in the property area. And too many liabilities. The figure that is thrown around is the equivalent of $3 trillion in municipalities in debt. Are you worried? Should we all worry, considering the importance of China and the international economy nowadays? That's a very good question. This is very sensitive. What happened is that when China moved forward very rapidly in the past 10 years, especially after entering the WTO, we embraced the WTO benefits. So the localities, they built up their leverages during the whole process. What we witnessed is that the State Statistics Bureau published the data first of it. It's kind in history in China. In year 2012, year 2011, sorry, for the data of the legacy, the stock of the loans followed by local government by the end of year 2010. That is $11 trillion in being Chinese. And by the end of last year, after two years roughly, and the State Statistics Bureau published the figure once again, the latest census showed us that figure coming out is about $21 trillion instead of $11 trillion. You can see the spiral now. And the good news is that China is determined to bring the transparency and information disclosure to the market. And underneath the total amount, they have classified items, province by province, about their gearing ratio and their leverage legacy. This is a very good practice because you put everything under the same line. And I think it caught a lot of attention globally, not only in China. And yes, the figure is increasing. Then next step, people will automatically keep the game. How about the quality of that assets and how about the quality of that borrowing? Where the money goes? So that is a very good question. And we raise these things, put under the sunlight, and let people think. And then next step, I think the government already showed the roadmap. The first thing, number eight is we will set up the new rules and the legislation. And we have clear-cut rules regarding the borrowing on the platform's local government, which province could borrow the money, which couldn't, if allowed, what kind of limitation they are facing. For example, they got to do their homework seriously to give the public the balance sheet, cash flow statements, profit and loss counts. And also they put everything on the website as other tax authorities does. And then they will calculate the funding cost and to disclose where the money goes. And furthermore, item B is the central government decide to reform our tax session system and make sure that the division of the homework done by the central government and the local government will be redefined. And according to that roadmap and the redefinition, then the resources will be redefined as well. So that is the second step. The rule over, the rule out of the VAT reform, instead of business tax, the Chinese will wipe out the business tax very soon. Instead, we will use the westernized VAT. And that is part of the reduction of the burden of the local government and enterprises. And that we will nourish more ideas about this issue. And that we also harness all the banks to do the due diligence from time to time and once again, and to make sure that the exposures could be measurable and the risk could be controllable. If not, then according to the risk exposure, all the banks must build up their capitals and provisioning extra. So this work has already stopped and it never stops until we clean up everything. I think it's about time to hear from you. Make sure to wait for the microphone because the interpreter needs it and the recording also requires it. So we're open to questions from the audience. There's a gentleman here and another one there. Let's take some questions in pairs. This gentleman here. Thank you for the opportunity. My name is Salil Shetty. I'm the Secretary General for Amnesty International. I want to just start by saying that the overall question really is linked to the interplay between economic growth and human rights. I want to get some... A question. You're not going to make a speech. The question really is about the relationship between the two. I want to say that consistently we've exposed the double standards of Western governments about human rights, whether it's the fifth year anniversary of Guantanamo Bay not being closed after President Obama promised it, NSA snooping from the US government, including the president of Brazil. So let's take that as a given. My question is to BRICS leaders. The BRICS countries and constitutions have committed themselves to human rights. So that's a good thing. So if... Is the magic bullet for the next stage of economic growth actually to liberate significant proportions or sections of the population in the BRICS countries to actually have access to human rights? It's women, indigenous people, minorities, if they get it. Do you think that's the breakthrough? The gentleman over here. Thank you. Marcelo Neri, Minister of Strategic Affairs from Brazil. Getting a bit on this question, on human rights. The point that the biggest risk in the world, as pointed in the mentioned research that was mentioned, is inequality. How you see internal inequality. How is the median Russian, South African, because you're talking about countries. Brazil, how about Brazilians, Russians, Indians, etc. How do you see in the next stage the role of social policies and the connection with internal markets and consumption? Okay, let's hold there for a moment. So these two questions. Who would like to volunteer? Since you're closer to me, I volunteer you. You're volunteering me. Well, we recognize that human rights must be respected. Every violation of human right must be investigated and punished. Let me also tell this audience, denial of access to drinking water, to sanitation, denial of access to basic healthcare. Those are gross violations of human rights. So a developing country laying out money to ensure that people get food, people get drinking water, sanitation, access to healthcare, that's ensuring that people enjoy human rights. Development is the answer to many human rights violations in poor and emerging economies. But there are other violations of human rights that take place. Gender injustice, crimes against women and children, caste discrimination, religious discrimination. Those violations of human rights must be investigated and punished. India is an open democracy. We are proud that we are an open liberal democracy. We will defend the human rights of every individual in India. At the same time, we are conscious that poverty denies people human rights and the elimination of poverty is the best assurance of human rights. Would anybody like to add something to it? The government of Brazil places great importance of moving forward in human rights. We have been working intensively in Brazil to implement broad-reaching rights and access to human rights. In the following ways, reducing poverty. Over the last ten years, Brazil has reduced absolute poverty by 90%. Secondly, social inequality. This is a problem that increased during the financial crisis in most countries. Inequality increased. Whereas in Brazil, we reduced inequality during that same period. Guaranteeing a good job during the crisis, we saw unemployment grow throughout the world. While in Brazil, we have virtually full employment. People are working and earning more. In addition to that, there have been other advances such as what Minister Sidi Bahans mentioned related to health, education, sanitation. These are all priority areas to the Brazilian government. Right next to her to make it easy for the microphone. Right there. Right there. Raise your arms over here right now. Thank you, sir. I am from Yes Bank in India. Sir, when BRICS started, there was energy. There was synergy. And the sigma of that in my judgment was kinetic energy. Today, sir, as I listen, that there are a lot of individual cases which are being presented. The fact of the matter is the world is looking forward to in this panel today to define the opportunities between emerging markets. And emerging markets are still the best in terms of growth, best in terms of demographics, best in terms of the ability to consume even the developed pockets supply. So a lot of our discussions are somewhat political. It does help to see how can we really connect the economic equation between the BRICS and revive what started with a lot of enthusiasm and is still a very good equation. Thank you. The gentleman there. Hello, I'm Ilan Goldberg from Itaú Bank. The global context is changing. The next five years will not be equal to the last five. It looks like the global economy is recovering, at least partly, which is a good sign. But at the same time, we are seeing normalization of monetary policy. Financial conditions globally will be tighter. So my question to you is, are you concerned with that or are you more relaxed as the global economy is recovering? In long run, I think the whole global economy is recovering, led by the recovery in the US. This is conspicuous. If you look back, the equity performed there outperformed the other countries by 30% roughly, 27 to 30% year. But in short term, the reverse movement of the QE could spill out huge shocks in these areas. I am more relaxed. So simply put, my suggestion is pull the cards closer to your chest. So the year to come, we must bring the bankers. We must do the due diligence more seriously. We must master the risk of the liquidity as a top priority. How thick the capital adequacy is and the structure of how better the structure of your capital is. It doesn't matter much. The problem is that if you can master a good mastery of intraday liquidity on a consolidated basis, on group-wise basis, then you will win. Definitely we will see a huge volatility in capital flows and greater rotation of risk debitals. Mr. Gauden, would you like to add something to that? Yes, I think we must accept that the kind of growth patterns and dynamism that we saw from certain areas of the world isn't going to continue forever. We should accept that we are, if you like, in a new transition to a new, new normal, if you can use that phrase, what exactly will characterize the new, new normal is not clear, but clearly it won't be the growth rates that we've seen before. Hopefully there will still be a return to investment, particularly fixed investment in this sort of atmosphere. And in this context, it's going to be a test for the G20 in particular if we can get coordinated macro-policy. So whilst my colleague from China says we're going to get a bit of turbulence as a result of tapering of QE, at the same time as my colleagues who participate in the G20 will say in the last four months, there's been a lot of debate within the G20 to manage tapering properly, to communicate effectively, and to create as much predictability and certainty as the tapering process unfolds. I think many in the Fed have heard us, particularly from the developing countries, quite effectively, and so there are going to be some shifts, but hopefully those shifts are not going to be shocks. The second point is that BRICS is not dead, nor are the emerging markets dead. The narratives change as they often do in fashionable terms. I think we must be careful not to forget that we are an interconnected community of nations and economies, that we are also interdependent, that at different stages, now in shorter periods and longer periods, it will be either developed countries or the developing countries that will take the lead, contribute more or less to global growth, but unless all of us see all of the world as opportunities for growth and opportunities for investment, we're not going to get the rebalancing that is actually required in the global economy, nor are we going to see new poles of growth and demand developing as well. That's what the emerging market story is about at the end of the day. So if you take a global multipole of you, then these are ructions that we've got to live through and manage effectively on the one hand, but that shouldn't amount to such massive swings in the narrative, which often as some people have described in the last day shifts in fashion. You know, red is in fashion one day and blue on another day. We've also got to look at some consistency in the way this works. I also want to take this opportunity to say that in South Africa we also value human rights and I share the comments of my colleagues. We have a very modern constitution, a bill of rights that acknowledges socioeconomic rights in very explicit terms, and what I've described earlier on in terms of government programs, all contributions to making sure that all 50, 55 million people who live in South Africa enjoy full human rights and human dignity, which is absolutely crucial. Thank you. Minister Dwork? Just very briefly, we do not see any real recovery. We are concerned very much about what's going on in the world. All those signs of recovery from our perspective are not sustainable yet. In the United States, still lose monetary policy helps to grow a little bit, but that level is still unsustainable. At some point, yes, Fiat will have to tighten at least a little bit. It's not clear whether energy prices will be as low as now for a long time. Shell oil development, we just don't know whether it's forever or prices will recover at some point and costs will go up again in the United States. Of course, Russia would like the prices to go up. The rest of the group would like the prices to go down. Well, our new sources of growth are not in oil and gas. As I mentioned, new sources of growth are in other industries. But more importantly, Europe, 0.4 is not growth. It's zero, 0.4. And it's clear that at some point the ECB will have to relax its policy to support growth. Otherwise, Europe is not going to have any growth. Banks will have to adopt Basel III now. They will have to tighten, as was mentioned, their policies and find new instruments to finance SMEs. It's very difficult to give just loans. What you're saying that George Soros should go back to worrying about Europe instead of the BRICS? Well, we are not separated from the rest of the world. We are dependent on Europe and the United States. BRICS are a part of the global economy. It's important to understand. Questions? A gentleman over here, a lady over there. Yes, Juan Garrido from Lima, Peru. Milton Friedman famously said that political freedom reforms normally follow economic freedom reforms. I would like to ask China if we will see political reforms in the medium or term. If we're not going to see one political party, we're going to see elections and many parties. Thank you. Just a second if you could hold for the second question. Sheila Nahi with Enphase Energy. Mr. Ming Kang, you referenced the immense problem of pollution in China, and I would just like to know from all of the panelists, do any of you support a carbon tax? Or in the alternative, do you support a policy that levels the playing field between the fossil fuel energy and the renewable energy industry? Okay, very quickly, because that will run off time. And to answer your question, political reform must go in line with economic reform. And the sequence is that economic reform will take a half step forward to nourish the basic fundamentals and then you can better people's lives because real law is some equality on economic way. And in the meantime, that will give you the backfire than to push the political reform. You've got to think about that. And Chinese new leaders already started political reform. We are thinking about how to nourish the new rules and the laws. And also we have already waged a huge campaign of fighting against corruption from top down and from bottom up. Any corrupt fries and any corrupt tigers will be caught according to the rule of law. And in the meantime, only in three months, we abolish the system of label camp to show respect to the human rights because the young people who are doing some wrong doings against the rules and laws, should be educated, not necessarily put behind the bars. The full stop, nationwide full stop of the label camp. So that's the basic answer to you. And that question is closely linked with the human rights. We must improve our human rights. It's a long and important mission. We must bear that in mind. But when we have the poverty and inequality and the pollution everywhere, we must make sure that well is our focus. Okay? But having said that, we can never forget human rights is a very important thing. We got to build up and prove ourselves all along the way forward. And to answer your question, yes, we approve the carbon tax implementation, but make sure that there's no recipe in economic life. Incrementing carbon tax can bring us a double-edged sword. Okay? So it must go side by side for the big market like China, side by side with the carbon trade system, the cap and the trading system, to encourage the people and give them motives to move forward to kill the pollutants and to reduce the carbon and monitor his carbon footprint while he is working on. That is something you can never nourish by carbon tax. But the carbon tax is very, you know, feasible and very quick. But in long run, you got to bring the market forth. To be a decisive one. To motivate people to do the right things in long run. China is stopped to do that. If you want to see the cap and the trade system, please go to Guangdong. And if you want to talk with the carbon tax scheme, you can talk to the more people. They'll nourish the scheme very quickly. Thank you very much. I think, you know, time flies when we're having fun. It's been an hour already. And we have to close this. There will be other people taking over the room. I appreciate you being here. I think we've come to the consensus over here that the BRICS are not dead. They may be taking a nap, but they will wake up soon. I'm not sure everybody agrees. How do we have a midlife crisis? No midlife crisis either. Maybe they just need to buy a sports car. They're far from midlife. Thank you very much. You're very young. Thanks for coming.