This article is part one of a series examining parallels between BRIC countries and the "emerging markets" of the MINT community.
While BRICs crumble, others may be making a MINT.
Thirteen years after the term BRIC was coined by Jim O'Neill, all four economic powerhouses seem to be slowing down. Brazil faces mounting deficits, Russia seems a study of state-driven corruption, India struggles with soaring food costs, and some economists fear a slowing China indicates domestic market troubles. Given the immediate issues in each of these, investors may have found a set of successors.
Enter the MINT countries...
O'Neill seems confident that he has found the next generation in Mexico, Indonesia, Nigeria, and Turkey. While the investment firm Fidelity International has coined the term MINT, others have cautiously labeled these countries the new "emerging markets." Using this term is something of a misnomer, as most of these countries have long been seen as regional economic players; the only difference between previous years and now seems to be a rapid percentage increase of millionaires. According to a SPEAR magazine study, all four countries will expand the number of millionaires by 7%, 22%, 10%, and 8.5%, respectively.
So what? The countries do boast more than an increasing number of wealthy citizens. Three of these four economies are in prime trade positions, with Nigeria not included largely to the current lack of African development. All but Nigeria are already members of the G-20, a sore point for Nigerian leadership, who claim a per capita income on par with India ($1,500). Three of them are also commodity producers (sans Turkey) with strong trade partnerships with developed markets.
Goldman Sachs and the World both note that all four are in the top 40 countries based on 2012 GDP numbers. Both further estimate that, barring sweeping changes in the economic landscape, all four will be in the top 15 by 2050 with further growth expected after that.
In good times and bad...
Unfortunately, there are strong parallels with BRIC countries in more than just the potential for economic growth. Each of these countries also has many systemic problems, problems that parallel their BRIC predecessors with an alarming similarity.
Nigeria, like Russia, is one of the more corrupt countries in the world. Despite claims to the contrary, this seems unlikely to change for the better with an expanding economy. Turkey's recent issues with currency stability parallel financial issues currently at play with Brazil. Indonesia and India both fight soaring inflation, with current outlooks grim for both states.
The only possible bright spot may be with China and Mexico, and this as a more "partly cloudy" future than perfectly sunny. Both, while growing due to a special trade relationship with the U.S., will slow as economic bubbles (with the accompanying potential to burst) form to support any domestic market growth.
The unavoidable fact is that BRIC and MINT economies may be doomed to the same future.
Is this systemic?
Will the economies of MINT countries head down the same road as their BRIC predecessors?
The following articles in this series will look at each pairing of BRIC and MINT mentioned above (Brazil-Turkey, Russia-Nigeria, India-Indonesia, China-Mexico) in turn to examine how closely the economic future of the MINT country may follow its BRIC analogue.
By the end of the series, being called the next generation of BRICs will have a very different meaning than the current optimistic interpretation as a booming market of tomorrow.
The other parts in the series:
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