Ten new emerging ecomomies named

Credit insurer Coface has named its predicted top ten emerging countries in terms of development, production prospects and sufficient financing to support expansion in the next five to ten years – and they’re not the usual suspects. The company believes Cipps (Colombia, Indonesia, Peru, Philippines and Sri Lanka) and KTZBE (Kenya, Tanzania, Zambia, Bangladesh and Ethiopia) are the countries to watch against a background of waning support for the likes of the Brics (Brazil, Russia, India, China and South Africa) and Mints (Mexico, Indonesia, Nigeria, Turkey and South Africa) economies. Cipps is seen as strong from an investment and infrastructure perspective as well as showing good growth, political stability and resilience to global shocks. KTZBE has also shown good growth and resilience to global shocks but while the nations will provide good investment returns, currently they still pose high risks, according to Coface lead analyst Saijil Singh. “We expect to see a significant improvement in five to ten years, but at the moment the KTZBE nations have a lack of good trade agreements – which favour their export partners, have poor infrastructure and poorer economic and education policies than their Cipps counterparts,” said Singh. Brics was hailed in the first ten years of the 2000s as driving the economic power shift from traditional global markets to emerging markets. “But the risks with Brics are that while the nations experienced unprecedented growth between 2008 and 2010, there has been an ongoing slight downward slope in growth which is expected to continue to marginally decrease up to 2018,” he noted. For 2014, Coface forecasts growth of on average 3.2 points lower than the average growth these countries registered over the previous decade. Factors such as the countries’ world rankings in ease of doing business and global competitiveness as well as political tension and social unrest have contributed to a slowdown in foreign direct investment as well, said Singh. Furthermore, an adjustment in supply means that local businesses no longer have sufficient production capacity to meet continued strong demand. “Companies are aware they are not going to achieve the kind of growth they need to keep up with the projected growth of the global economy,” he said. Mints economies were showing slightly more potential for growth, although the future growth projections were also on a downward slope and the same inherent risks as the Brics nations applied, commented Singh. “Furthermore, global investors do not have the same experience dealing with these countries so they will still choose to invest in Brics rather than Mints,” he said. INSERT & CAPTION For 2013 Coface forecasts growth of on average 3.2 points lower than the average growth Brics countries registered over the previous decade. – Saijil Singh CAPTION Zambia, with the capital city of Lusaka pictured here, offers the lowest risk of the KTZBE economies, and has good infrastructure, says Coface.