Beyond BRICS: The Next 11

There are countries, beyond BRICS (Brazil, Russia, India, China and South Africa), that are expected to follow the grouping’s trail of economic growth. In late 2005, Goldman Sachs and economist Jim O’Neil identified eleven countries which have the potential to become significant economies in the future. The eleven countries, denoted by the acronym N-11, are Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam. Goldman Sachs chose these countries because of their promising outlooks for investment and future growth. Also, the main criterion for the selection of these countries is their large populations. The difference between the BRICS countries and the N-11 countries is the size of the population and economy. The N-11 countries have smaller populations and economies compared to the BRICS countries.

Bangladesh is a country with 151.6 million people and a young work force. The country has been experiencing rapid economic growth for more than two decades and has a nominal gross domestic product (GDP) of US $135 billion and a per capita GDP of US $891 in 2013 (however, it has a per capita GNI or gross national income of US$923). As shown in the Table 1, the services sector is the dominant portion of the economy (54.1 per cent) followed by industry (28.6 per cent) and agriculture (17.3 per cent). The country is the second largest garment exporter in the world. Coupled with robust exports, significant remittance from migrant workers has allowed the country to achieve foreign exchange reserve of more than US$16 billion. In 2013, Bangladesh accounted for 2.2 per cent of the N-11 GDP of more than US$6.12 trillion.

Egypt is one of the most populous countries in Africa and the Middle East with a population of over 84 million people. With a nominal GDP of almost US$265 billion, the country has a per capita income of US$3,146. Egypt’s GDP consisted of 4.3 per cent of N-11 GDP in 2013.

Indonesia is the world’s fourth most populous country with a population of 248 million people and has an area of more than 1.9 million square kilometres. It has the largest economy in Southeast Asia and is a member of the G-20. Endowed with natural resources, the country has a nominal GDP of US $946.4 billion and a per capita income of US $3,817. Its economy consisted of 15.3 per cent of the N-11 GDP in 2013.

Iran is the 18th largest country in the world with an area of 1.65 million square kilometres. It has a population of 77 million people. A major oil producer and with the largest proven natural gas reserves in the world, Iran has a GDP of US $429 billion and a per capita income of US $5,567. In 2013, Iran consisted of seven per cent of N-11 GDP.

Covering almost two million square kilometres, Mexico is the 13th largest country in the world. It has a population of 116 million people. Mexico has a trillion dollar economy and its GDP is US $1.28 trillion with a per capita income of US $10,989. Mexico has the largest economy in the N-11 group and consisted of 20.8 per cent of the group’s economy.

Nigeria is the most populous country in Africa and has a population of 169.2 million people. It has a GDP of US $283.7 billion and a per capita income of US $1,676. Nigeria consisted of 4.6 per cent of N-11 GDP.
Pakistan has a population of 182.6 million people and is the sixth most populous country in the world. The country’s GDP of US $239 billion was 3.9 per cent of the N-11 GDP. It has a per capita income of US $1,309.

With a population of 98 million people, Philippines is the 12th most populated country in the world. It has an area of 300,000 square kilometres. It has a per capita income of US $2,918 and a GDP of US $284.5 billion. In 2013, 4.6 per cent of the N-11 GDP can be attributed to the Philippines.
Turkey is a transcontinental country, located at the crossroads of Europe and Asia. With an area of 783,562 square kilometres, the country has a population of 75.8 million. It has a per capita income of US $11,236. Turkey has a GDP of US $851.8 billion that is the world’s 17th largest nominal GDP. It consists of 13.9 per cent of the N-11 GDP.
South Korea has a population of 50 million people and an area of more than 99,000 square kilometres. It has an advanced economy and is a member of the trillion dollar club (countries that have at least a trillion dollar economy). It has a GDP of US$1.26 trillion and a per capita income of US$25,051. South Korea consists of 20.6 per cent of the N-11 GDP in 2013, second only to Mexico.
With a population of over 91 million, Vietnam is the 13th most populous country in the world. It has an area of 331,210 square kilometres. It has a per capita income of US $1,705 and a GDP of US $156 billion. Vietnam’s economy consists of 2.5 per cent of the N-11 GDP.
However the N-11 is a diverse group of countries, both geographically and economically:
* South Korea and Mexico are trillion-dollar economies while Turkey and Indonesia are quite close to joining the trillion-dollar club. Rest of the N-11 members are below the half-trillion-dollar level.
*  The countries vary in population size. South Korea has the lowest population (a bit more than fifty million) among the group while Indonesia has the highest (almost a quarter billion).
*  In terms of economic development, the countries are at different stages of development. South Korea is considered as a developed economy with a strong industrial base. Iran, Mexico, Philippines, Turkey and Indonesia are considered as newly industrialising countries. Finally, Bangladesh, Egypt, Nigeria, Pakistan and Vietnam are considered as developing countries. Bangladesh and the other developing countries are posting strong economic growth while the newly industrialising countries are also experiencing high growth.
*  In terms of human development, South Korea is considered as a country with very high human development. Again, the developing countries including Bangladesh have low/medium development but, are experiencing significant improvements in human development.
*  The N-11 members vary in terms of integration to the global economy. South Korea is very much integrated to the global economy while countries like Bangladesh and Vietnam are transitioning towards greater integration to the global economy.
*  All the developing countries in the group are experiencing rapid growth in the usage of cell phones. Bangladesh has experienced substantial increase in cell phone usage among its population.
*  The sectoral composition of the economy is different for the various countries. The Table 1 shows that agriculture consists of only 2.6 per cent of the economy for South Korea while it is the highest for Indonesia at 38.3 per cent. Industry consists of only 15 per cent of Nigeria’s economy while it is the highest for Vietnam at 41.4 per cent. Again, 30 per cent of Nigeria’s economy is services while the highest is for Mexico at 63.5 per cent. Services account for close to or more than fifty per cent of the economy for most of the countries. Of the eleven countries, only Iran and Nigeria have a portion of their economies attributed to oil.

The N-11 countries had a combined GDP of US$760.2 billion in 1980 that composed of 7.1 per cent of world GDP as shown in the Figure 4. In 2013, their combined GDP of more than US$6.12 trillion is 8.3 per cent of the world economy. The share of the N-11 countries of world GDP has increased as shown by the upward trend of the curve in the Figure 4. During the same time, N-11’s share of world population increased from 708.3 million in 1980, which was 17.8 per cent of world population, to more than 1.34 billion in 2013. This is 19.1 per cent of the world population of 7.2 billion. The upward trend of N-11’s share of world population is shown in the Figure 5. Therefore, both the combined GDP and population of the N-11 countries increased during the period. Also, all the N-11 members experienced increases in their respective per capita incomes as shown in the Table 2. During the period 1980-2013, South Korea experienced the highest increase in per capita income of 1383.3 per cent while Nigeria had the lowest percentage of increase of 89.3 per cent. Bangladesh had a strong growth in its per capita income of 268.4 per cent.

The N-11 countries as a group are growing quite rapidly. Even though they do not match the BRICS population of 40 per cent of world population and GDP of more than 20 per cent of world GDP, the N-11 members are considered potential growth countries that are expected to grow and become important contributors in the functioning of the global economy. The growth of the N-11 countries have opened new markets for other developing countries as well as developed countries. With a population of 1.34 billion, the N-11 countries are an important source of workers and consumers. They are increasingly becoming popular investment destinations as well as sites for manufacturing activities. It is expected that they will become more important players in the global economy in the future.

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