Just after the turn of the millennium, Goldman Sachs economist Jim O’Neill coined the term BRIC. This name-checked four developing economies – Brazil, Russia, India and China – that would see great economic advancement over the medium/long term. Recently, O’Neill updated his prediction. After largely seeing success with his BRIC picks, he has now stated that MINT countries – Mexico, Indonesia, Nigeria and Turkey – are likeliest to be among the next wave of states improving themselves financially and socially. So what does the future hold for the business climates in these countries?
The social makeup of the MINT countries is one of the most important factors for the economic optimism surrounding them. As Jim O’Neill said in a New Statesman interview this month: “if you’ve got good demographics that makes things easy.” The young average age in countries like Indonesia naturally lends itself to expanding businesses and up-to-the-minute consumer trends – as the Jakarta Globe newspaper reported this week, up to 76% of internet users in Indonesia have shopped online in the past year. This has led to many new start-ups that are finding ways to grow in rapidly changing economies. Just look at Mexico City-based online beauty retailer Obzes.com, or Turkish hotel bookings site Gezlong, which have adopted business models normally associated with more developed nations.
This is not to say that the growth in young entrepreneurial firms comes at the expense of traditional big business, though. Companies such as L’Oréal have made great strides into up-and-coming areas in the recent past, setting up in Nigeria, Egypt, Kenya and Ghana in the last two years alone. This is, in many ways, triggered by desire and demand on the part of the consumer, something Bertrand de Laleu, the firm’s MD for South Africa, supports: “African consumers are aspiring to international brands. They want quality and they’re ready to pay.” New and developing economies can be difficult for international businesses to set up and thrive in, due to specific cultural differences and purchasing patterns. But, the rewards available in flourishing territories like Nigeria are making it worth the risk.
Having said this, it is still inadvisable to take theories and groupings like the MINTs as hard and fast rules for economic success. For one thing, O’Neill’s classification omits countries such as Vietnam and South Korea, which have long been pegged as booming economies that are likely to see further development as a result of growing connectivity and infrastructure enhancements. It would be wrong to look at the MINT economies as guaranteed bets for success, but it is always instructive to pay close attention to business environments that are seeing growth from all angles. When start-ups and international conglomerates are prospering side by side, it tends to be a good sign for the future!
The MINT countries seem to be at the vanguard of a new wave of development outside the traditional business powers. Can you think of any other emerging countries that are performing similarly well in the current climate? Let me know at firstname.lastname@example.org, and have a lovely weekend!