Skip to main content

Building on 'BRICS': The next emerging economies

By Oliver Joy, CNN
March 27, 2013 -- Updated 1449 GMT (2249 HKT)
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
October 28, 2014 -- Updated 1443 GMT (2243 HKT)
A captured fighter tells CNN's Ivan Watson: "They gave us drugs... that made you go to battle."
October 29, 2014 -- Updated 1331 GMT (2131 HKT)
A terminally ill woman who plans to take her own life checks off the last item.
October 30, 2014 -- Updated 2340 GMT (0740 HKT)
In a plot straight out of Hollywood, federal agents gain access to a suspected Triad boss' Vegas hotel room by pretending to fix the Internet connection.
October 31, 2014 -- Updated 0434 GMT (1234 HKT)
Was it only black and Latino men who harassed a woman in NYC? The filmmaker has found himself in a race controversy.
October 31, 2014 -- Updated 2152 GMT (0552 HKT)
The history of human rights often overlooks the struggles of gay people. This must change.
October 30, 2014 -- Updated 0115 GMT (0915 HKT)
Armed with Kalashnikovs and chanting for the dead comrades, women are among ISIS' most feared enemies. They are fighting for their families -- and now they are getting U.S. help.
October 28, 2014 -- Updated 1246 GMT (2046 HKT)
Lere Mgayiya put his best foot forward and set up a shoe-shine firm after his career plans fell flat.
October 30, 2014 -- Updated 0528 GMT (1328 HKT)
One Chinese drone manufacturer wants to take away the warmongering stigma of "drones."
October 30, 2014 -- Updated 0312 GMT (1112 HKT)
Sketcher Luis Simoes is traveling the world -- slowly. And he's packed his sketchbook.
October 28, 2014 -- Updated 2043 GMT (0443 HKT)
European states help North Korea's brutal treatment of its people by allowing luxury goods like cars and cognacs to evade sanctions, two experts say.
October 24, 2014 -- Updated 0345 GMT (1145 HKT)
Chinese leaders want less odd architecture built in the country.
October 31, 2014 -- Updated 1104 GMT (1904 HKT)
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