mint
Business Management

Local Perspectives: What about the 'MINTs'?

Is the economist Jim O’Neill correct in his prediction that the ‘MINT’ group of Mexico, Indonesia, Nigeria and Turkey could be the next countries to join the “top table” of commercial powerhouses? O’Neill has being doing the media rounds recently, contributing to newspapers and magazines and making a heavily publicised series of BBC radio programmes. Across these he has touted the notion that a cocktail of demographics, location, trading partnerships and natural resources will make these countries the natural successors to the BRICS of Brazil, Russia, India, China and South Africa.

We will be analysing the prospects for each of these markets individually very soon but, as a capsule view, a mixture of desk research and a straw poll of experts and local citizens produces a mixed response. In short, the collective wisdom is that, yes, there is cause for optimism but there are plenty of barriers to be overcome too.

Take Mexico, the country that O’Neill predicts will leap from 14th in the world by GDP in 2012 to seventh in 2050. 

Luis Serra of Mexican think-tank CIDAC recently told the BBC World Service:

“I see some positive things … but I don’t see the other things in place so as to take advantage of those reforms. There are still some labour market rigidities, the level of corruption in the country is quite high and … the level of security in the country is still very, very obscure.”

But Duncan Wood, director of the Mexico Institute at research group the Woodrow Wilson International Center for Scholars, is more optimistic.

“Because of what’s happening in North America, geo-location really does make a huge difference. [Future prosperity is] not guaranteed … but we’ve had 20 years of NAFTA (the North American Free Trade Agreement) and structural changes to the economy. In the 1980s [Mexico] was still predominantly a commodities-based economy with oil 60% of all exports and now its 12% — that’s a huge change. The fact is that [Mexico has] done what no other Latin American country has been able to do and it’s a highly efficient economy. Mexico is at the sweet spot right now.”

Wood also contends that knowledge economy in the medium term, five to ten years out, will have a significant, growing impact on Mexico, pointing to the emergence of an aerospace cluster and emerging technology and internet startups.

Indonesia generates a similar mix of scepticism and optimism.

“In my view, the celebration of Indonesia as a ‘MINT’ falls wide of the mark, and repeats two mistakes made time and again in the spirit of boosterism,” says John Sidel, Professor of International and Comparative Politics at the London School of Economics.

Sidel argues that Indonesia’s recent growth and attractiveness to investors has stemmed largely from natural resources but suggests that export manufacturing has not improved since the 1990s. He also feels that the success of the Susilo Bambang Yudhoyono administration has been exaggerated and believes upcoming elections may lead to political instability.

Babatunde Afolayan, IDC analyst for West Africa, based in Nigeria agrees with “maybe about 50%” of Jim O’Neill’s summary.

“There is a lot of potential in Nigeria. It is a big market,” yet he remains sceptical about Nigeria’s ability to meet challenges around education, power and security. “The current situation right now doesn’t support [O’Neill’s prediction that Nigeria will be a top 20 economy by 2050], unless you begin to look at the fact that government is trying to reform. We don’t know if these reforms will work out, but if they do work out it will be close to being one of the biggest 20 economies by 2050. If not, I don’t think Nigeria will be there.”

Franklin Nnebe, Managing Director, Nnebe Business Services provides a similar response:  “Nigeria fundamentally stands out for its large population, its significant natural resources, its high urbanization rate and its youth demographics. [And] what is remarkable is that the Nigerian economy has grown between 6-7% on average over the past decade despite serious governance failure.”

“[However] corruption in the Nigerian government is on a scale seen in few places on earth and has created infrastructure that can best be described as hellish. Governance remains Nigeria's single biggest risk going forward. [This means that] apart from infrastructural issues, corruption, extortion by government agents, a weak judiciary, has created an almost lawless business environment where only the strong survive.”

Data Centre Consultant Uff Ali who divides his time between Turkey and the UK is positive about the 'T' in 'MINT': 

“Turkey is investing heavily in infrastructure and literally being at the centre of the world could soon make it a global network hub for everyone. The sheer scale of construction you can see when you are there provides clear indication that there is a lot going on.”

Yet political stability, which previously stood at the centre of Turkey’s development, has been shaken recently by a high profile corruption scandal. "Political stability was the cornerstone of the government's political and economic success," Asaf Savas Akat, an economist and professor at Bilgi University in Istanbul told the Guardian:  "This crisis might shake the confidence of economic actors and lead to considerably slower growth in an already more difficult economic environment."

Overall, it is plain to see that Jim O’Neill’s predictions about the next emerging markets are not without difficulties. All of these countries have potential, yet they all also have a healthy dose of challenges that need to be overcome too. Do you think other countries should be included in the list?

 

Martin Veitch is Editorial Director at IDG Connect

Kathryn Cave is Editor at IDG Connect

 

Over the next couple of weeks we will be profiling Mexico, Indonesia, Nigeria and Turkey in a bit more detail. Please drop Kathryn Cave a note if you would like to share your views.

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