JOHANNESBURG: Countries with emerging markets in the world can learn from India's experience in economic reforms to remove structural rigidity, improve their institutions and encourage investment, according to a leading South African investment analyst.
"Countries in emerging markets need a 'Modi moment'," Martyn Davies, managing director for emerging markets and Africa at Deloitte Frontier Advisory, told a business summit in Cape Town.
"To break the cycle of structural economic decline, I argue, you need a dramatic political event or shift," Davies was quoted as saying by the MoneyWeb website.
Although when some economists agreed that with the current challenges in South Africa's economy the country needs to see a dramatic change, Davies was not optimistic about this happening in the near future, citing the long time it took India to achieve it current position.
Davies pointed out that it had taken three generations from Mahatma Gandhi's initial call for independence from the British before Narendra Modi came to power.
Davies said that many emerging markets were now showing the reality of poor policy being exposed, with the illusion created by the artificial economic conditions that existed in the early 2000's falling away.
"The great expectations of the last decade are likely to be dashed," he said, giving South Africa's pedestrian growth rate as an example.
"While India's growth rate is now surpassing China's, South Africa is barely recording positive GDP growth figures my view is that if you are not growing, you are regressing," Davies said.
"When you have the combination of talent, financial and intellectual capital, growth is natural. To return to growth South Africa therefore needed its 'Modi moment', Davies added.
"It needs to learn the lessons of history and implement the reforms that will put it on a sustainable growth path, just like India has done this past year," he said.