Skip to main content

Building on 'BRICS': The next emerging economies

By Oliver Joy, CNN
updated 10:49 AM EDT, Wed March 27, 2013
BRICS leaders (From L) India Prime minister Manmohan Singh, President of the People's Republic of China Xi Jinping, South Africa's President Jacob Zuma, Brazil's President Dilma Rousseff and Russian Federation President Vladimir Putin, pose for a family photo in Durban.
BRICS leaders (From L) India Prime minister Manmohan Singh, President of the People's Republic of China Xi Jinping, South Africa's President Jacob Zuma, Brazil's President Dilma Rousseff and Russian Federation President Vladimir Putin, pose for a family photo in Durban.
STORY HIGHLIGHTS
  • EIU's John Bowler sees Indonesia and Myanmar as burgeoning economies
  • Goldman Sachs' O'Neill said any club including China is going to be very difficult to match
  • BRICS leaders meet in South Africa to make deal on development bank

(CNN) -- As leaders of Brazil, Russia, India, China and South Africa convene in Durban, the term "BRICS" used to describe these rapidly growing economies is so last year; today everyone is talking about the "CIVETS."

Made up of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa -- these nations, some with sizable populations and others with a wealth of natural resources, could be the economic boomers of the next decade, according to John Bowler, director of Country Risk Service at the Economist Intelligence Unit.

Although unlikely to rival the economic might of India and China or the resources of Russia and Brazil, this motley crew of emerging markets make the CIVETS the next band of countries to profit from a shift in global power.

Bowler highlights oil-rich Indonesia as a growth story for the next decade in particular. With low levels of public debt and a population of more than 200 million people, the Southeast Asian nation posted growth of 6% in 2012, at a time when economic giants such as China and India slowed.

"Indonesia is a low-cost location so it's attracting investment that would have previously gone into China but because of wage demands that investment is going into Indonesia," he said.

Bowler also noted that Egypt has high growth potential despite trying to secure a critical $4.8 billion loan from the International Monetary Fund.

The country is mired in political turmoil following the outbreak of the Arab Spring two years ago, with Egyptian opposition politician Mohamed ElBaradei labelling the North African nation a "failed state" as the country remains divided over controversial President Mohamed Morsy.

"Eventually Egypt will modernize and follow the kind of path that Turkey has in reconciling its issues in society," Bowler added.

Other members of the CIVETS -- Colombia, Turkey and Vietnam -- all saw growth of more than 3% for 2012, according to IMF data, well above the U.S., U.K., Germany and the debt-ridden "PIGS" of Europe; Portugal, Ireland, Greece and Spain.

The bank of BRICS?

Bowler told CNN: "Turkey is an exciting emerging market and Colombia will continue to do well over the coming decade with good demographics and rich, diverse resources even though it has had problems with militia."

BRICS deals rain down at summit

One other country that may take the world by surprise is Myanmar, also known as Burma.

Can BRICS help boost Brazil economy?

The IMF is forecasting rapid growth of 6.3% this year for Myanmar, as the country emerges from decades of military repression. Bowler said that Myanmar, despite the recent unrest, will attract a large amount of foreign investment and is rich in gem stone and base metal resources.

BRICS members finalize development bank

But Goldman Sachs economist Jim O'Neill, the man who coined the BRICS term in 2001, said any club including China is going to be very difficult to match. He said the world's second-largest economy, in tandem with India, Russia, Brazil and South Africa, is still the big story for at least the next 10 years.

O'Neill added: "China creates another Cyprus every week, creates another South Africa every four months, has created another India in the past two years ... by the end of the decade the BRICS will have at least 25% of global GDP."

Leaders of the five economic powerhouses are in South Africa to thrash out a deal on a BRICS development bank, which will fund infrastructure ventures in developing nations; a venture that could be "hugely significant" for Africa, according to O'Neill.

China, in particular, is seeking to increase its investments in the resource-rich continent. This week, newly installed President Xi Jinping made his first state visit to Africa, signing a $10 billion agreement to build a major port and industrial hub in Tanzania.

"It [the bank] is effectively going to replace what the World Bank's purpose has been for the BRIC countries and their friends," said O'Neill.

O'Neill, who is set to step down from his role at Goldman Sachs later this year, forecasts that by 2035 the BRIC nations will be as big as the leading industrialized nations of the G7.

ADVERTISEMENT
Part of complete coverage on
updated 10:42 PM EDT, Thu October 23, 2014
Successful launch of lunar orbiter, seen as a precursor for a planned mission to the surface of the moon, marks significant advance for the country's space program.
updated 3:15 PM EDT, Thu October 23, 2014
Cpl. Nathan Cirillo, shot while standing guard at Ottawa's National War Memorial, was known for his easygoing manner and smile.
updated 4:06 PM EDT, Wed October 22, 2014
Non-stop chatter about actress' appearance is nasty, cruel, hurtful, invasive and sexist.
updated 6:08 PM EDT, Thu October 23, 2014
CEO's 30-min Putonghua chat is the perfect charm offensive for Facebook's last untapped market.
updated 11:45 PM EDT, Thu October 23, 2014
Chinese leaders want less odd architecture built in the country.
updated 4:58 PM EDT, Wed October 22, 2014
Air New Zealand's new 'Hobbit' safety video stars Peter Jackson, Elijah Wood, elves and orcs.
updated 10:14 AM EDT, Thu October 23, 2014
A 15-year-old pregnant girl is rescued from slavery, only to be charged with having sex outside of marriage, shocked rights activists say -- a charge potentially punishable by death.
updated 11:33 PM EDT, Tue October 21, 2014
After sushi and ramen, beef is on the list of must-eats for many visitors to Japan.
updated 12:07 PM EDT, Mon October 20, 2014
Airports judged on comfort, conveniences, cleanliness and customer service.
updated 1:48 PM EDT, Wed October 22, 2014
Scientists use CT scans to recreate a life-size image of the ancient king.
updated 5:59 AM EDT, Wed October 22, 2014
Despite billions spent on eradicating poppy production, Afghan farmers are growing bumper crops, a U.S. government report says.
updated 6:21 AM EDT, Fri October 24, 2014
Each day, CNN brings you an image capturing a moment to remember, defining the present in our changing world.
Browse through images from CNN teams around the world that you don't always see on news reports.
ADVERTISEMENT