By Cristine Edusi||
We all celebrated the arrival of the New Year (with various beverages and brilliant company I’m sure) but unknown to us one of the biggest breakups in recent financial history was taking place. The date of the split is irrelevant, what is significant is that the financial world broke with the BRIC countries and moved on (rather quickly in my opinion) to the MINT countries.
At this juncture it is only right that I expound on both BRIC and MINT countries to reduce the risk of confusion. BRIC, an acronym for Brazil, Russia, India and China, was coined by former Goldman Sachs economist, Jim O’ Neill. Ever since their inclusion in the 2003 report, where O’ Neill predicted that these countries would change the face of the international economy, the BRIC’s reigned supreme. However, towards the ending of 2013 and the beginning of 2014 trust in the BRIC’s began to waver. I had been following the BRIC countries ever since the acronym became popular and so it was a shame to see them fade into the background but the financial world had chosen. In a statement that dates back to November 2013 O Neill wrote,
I spent last week in Indonesia, working on a series for BBC Radio about four of the world’s most populous non-BRIC emerging economies. The BRIC countries — Brazil, Russia, India and China — are already closely watched. The group I’m studying for this project — let’s call them the MINT economies — deserve no less attention.Mexico, Indonesia, Nigeria and Turkey all have very favorable demographics for at least the next 20 years, and their economic prospects are interesting.
In my quest to understand the sudden shift, I carried out my own research and found an article that was both insightful and thought provoking. Given that I had religiously followed the economies of the BRIC countries, I was eager to see how the writer would discuss these new economic giants. The article described the reasons why the economies had been grouped in this way by considering their location, their potential to develop their own economic hubs, their wealth and the fact that they are commodity producers and classified these reasons as key factors. The Mint’s are certainly attractive, they can each boast of unique economic growth in spite of a global recession but Mexico has a failed state, the stability of Michoacán has been questioned; Turkey’s political instability derived from corruption is a cause for concern;Nigeria’s Boko Haram is an eminent problem for the West African country; only Indonesia can boast of political stability. Economic success is known to follow political stability and so it will be interesting to see how far these countries will fare towards the end of 2014.
On the other hand, Nigeria’s case in particular gives cause for optimism. The most striking thing about Nigeria is that its gross domestic product expanded to 6.81 percent in the third quarter of 2013, despite having zero to minimal energy. Aliko Dangote, Africa’s richest man was quoted saying,
Can you imagine, can you believe, that this country has been growing at 7% with no power, with zero power? It’s a joke.
So perhaps a nation’s problems won’t necessarily stop economic growth altogether and it’s possible that my cynicism is unjustified, however, only time will tell.
Yet, what I do know is this: the financial world dumped the BRIC’s for the MINT’s and the break up was not at all amicable. The fact that the financial world very quickly moved on from the BRIC’s is actually quite amusing and it will be interesting to see the countries that will qualify next year if the novelty of the MINT’s does wear off.
GDL, Waterloo, Full Time