It was in 2003 that Goldman Sachs pinpointed Brazil, Russia, India and China (BRIC) as the world’s top emerging economies. And in the eight years since, their growth has been so meteoric, they’ve all but caught up with “modern” markets. In terms of skills and education, GDP, foreign investment and growth, the BRICs have been incredibly successful – and they’re weathering the global downturn better than many.
So where to now?
Two years after BRIC, the investment bank identified another collection of countries – the “Next 11” – which could be among tomorrow’s world-leading economies. And forward-thinking international businesses are uncovering exciting opportunities there.
Two well-established partners are members of the N-11, and their proximity to large, well-developed markets that are committed to further international trade will help sustain their growth. Turkey has excellent (primarily exporting) trade relationships with Europe, as does Mexico with the United States. Food and drink, oil and gas, and construction / infrastructure present great opportunity in both countries.
In Africa, Nigeria and Egypt have consistently enjoyed economic growth of 5-8% for the past five years and offer massive potential in terms of construction and infrastructure. In my opinion, recent events in Libya mean it could now be added to the N-11 list – there’s huge oil wealth and a clear opportunity, especially in oil and gas, infrastructure and healthcare. (Even before the Arab Spring, the UKTI predicted Libya would become a top four export market for UK businesses). Political uncertainty remains in all three of these countries, but their potential is vast.
Unsurprisingly, most of the N-11 are located in the Middle East and southern Asia. Pakistan is the least developed and one that is facing very difficult political and societal challenges. But on a visit there last year, the former UK Trade and Industry chief, Sir Andrew Cahn, stated the UKTI was aiming for 50% growth in trade between the two countries. Pharmaceuticals are a priority sector here, along with oil and gas, power, food and drinks and engineering.
At the other end of the spectrum, South Korea’s recent growth means it is already a star performer. Adult literacy is almost 100% and unemployment only 3.2% (compared to 9.1% in the US and 8.1% in Britain). Last month, the US Congress passed a Free Trade Agreement with Korea, similar to that signed in Europe in 2009 – so expect the international trade floodgates to open, especially in food and drink, advanced engineering, construction and life sciences.
Iran is still subject to sanctions from Europe, the USA and the United Nations. It’s undoubtedly a risky country, and there is currently little official support for international trade there. But very slowly, Iran is starting to come in from the cold – there was no shortage of international exhibitors at this year’s oil, gas and petrochemical exhibition in Tehran, for instance. China, Russia and some Middle Eastern economies are already engaged in international trade with Iran.
Assisted by foreign investment, Bangladesh is already a major exporter of clothing and textiles, but machinery, equipment and pharmaceuticals are some of the key sectors that will support the country’s continued growth – currently around 7% per annum. The Bangladeshi government has set a ‘’Vision 2021’’ agenda, to move Bangladesh to a middle income country by 2021. Building, construction, power and telecoms will be central to achieving this.
Indonesia’s massive population – around 260 million – is one of the key factors behind its inclusion in the N-11. International food, drink, pharmaceutical, medical and healthcare businesses are reaping rewards already. Energy, infrastructure and agribusiness are some of the “hot” sectors of the future.
Infrastructure is the focus in the Philippines, which grew by over 7% last year. As a result, power, building and construction are the industries to watch. Alongside these, PPP schemes are planned in agriculture and health, presenting exciting opportunities for inward investors and exporters.
Vietnam wraps up the list N-11 countries. Designated one of UKTI’s “High Growth Markets,” its GDP has risen by an average of 6.9% annually over the past five years. Transport and infrastructure top the list here, but the food and drink, pharmaceutical, oil and gas, machinery and telecommunications industries are also set for strong growth.
What does all this mean?
The N-11 (or 12) is a disparate collection of countries, but they all have one thing in common: the potential to be leading world markets. Food and drink, pharmaceuticals and life sciences, building and construction, engineering and oil and gas are the common drivers in these countries, sectors in which BDB has demonstrated its expertise as clients have pushed into BRIC countries and beyond. Contact Zoë if you’d like to know how we can help exporters build brands and business here, or anywhere else in the world.
