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 21, 2014 -- Updated 0102 GMT (0902 HKT)
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.
October 20, 2014 -- Updated 1607 GMT (0007 HKT)
Airports judged on comfort, conveniences, cleanliness and customer service.
October 20, 2014 -- Updated 1319 GMT (2119 HKT)
With so many new attractions on the way, the next few years are going to be a roller coaster ride.
October 16, 2014 -- Updated 0429 GMT (1229 HKT)
Thomas Malthus famously predicted that rising populations would create a food crunch: Could this be true?
October 21, 2014 -- Updated 0945 GMT (1745 HKT)
The lives of everyone close to Oscar Pistorius and the girl he killed are changed forever, his siblings say.
October 18, 2014 -- Updated 1033 GMT (1833 HKT)
From "Sick Man of Europe" to the world's fourth largest economy.
October 20, 2014 -- Updated 1218 GMT (2018 HKT)
Each day, CNN brings you an image capturing a moment to remember, defining the present in our changing world.
October 15, 2014 -- Updated 2327 GMT (0727 HKT)
Serbia and Albania try to play but the major game is called off after a drone flying a political flag enters the stadium.
October 14, 2014 -- Updated 1136 GMT (1936 HKT)
George Clooney's new wife, is now Amal Clooney, raising the issue of married names.
October 14, 2014 -- Updated 1757 GMT (0157 HKT)
The mysterious unmanned X-37B space plane returns to Earth after more than two years in space. But the U.S. Air force isn't saying much.
Browse through images from CNN teams around the world that you don't always see on news reports.
ADVERTISEMENT