In 2001 the world began talking about the Bric countries – Brazil, Russia, India and China – as potential powerhouses of the world economy. The term was coined by economist Jim O’Neill, who has now identified the “Mint” countries – Mexico, Indonesia, Nigeria and Turkey – as emerging economic giants. Here he explains why.
So what is it about the so-called Mint countries that makes them so special? Why these four countries?
A friend who has followed the Bric story noted sardonically that they are probably “fresher” than the Brics. What they really share beyond having a lot of people, is that at least for the next 20 years, they have really good “inner” demographics – they are all going to see a rise in the number of people eligible to work relative to those not working.
This is the envy of many developed countries but also two of the Bric countries, China and Russia. So, if Mexico, Indonesia, Nigeria and Turkey get their act together, some of them could match Chinese-style double-digit rates between 2003 and 2008.
Something else three of them share, which Mexican Foreign Minister Jose Antonio Meade Kuribrena pointed out to me, is that they all have geographical positions that should be an advantage as patterns of world trade change.
For example, Mexico is next door to the US, but also Latin America. Indonesia is in the heart of South-east Asia but also has deep connections with China.
And as we all know, Turkey is in both the West and East. Nigeria is not really similar in this regard for now, partly because of Africa’s lack of development, but it could be in the future if African countries stop fighting and trade with each other.
This might in fact be the basis for the Mint countries developing their own economic-political club just as the Bric countries did – one of the biggest surprises of the whole Bric thing for me. I can smell the possibility of a Mint club already.
What I also realised after talking to Meade Kuribrena, is that the creation of the Mint acronym could spur pressure for Nigeria to become a member of the G20, as the other Mints already are.
This was something the charismatic Nigerian finance minister, Ngozi Okonjo-Iweala was keen to talk about: “We know our time will come,” she said. “We think they are missing something by not having us.”
Meade Kuribrena went so far as to suggest that, as a group of four countries, the Mints have more in common than the Brics. I am not sure about that, but it is an interesting idea.
Economically three of them – Mexico, Indonesia and Nigeria – are commodity producers and only Turkey isn’t. This contrasts with the Bric countries where two – Brazil and Russia – are commodity producers and the other two – China and India – aren’t.
In terms of wealth, Mexico and Turkey are at about the same level, earning annually about $10,000 (£6,100) per head. This compares with $3,500 (£2,100) per head in Indonesia and $1,500 (£900) per head in Nigeria, which is on a par with India. They are a bit behind Russia – $14,000 (£8,500) per head – and Brazil on $11,300 (£6,800), but still a bit ahead of China – $6,000 (£3,600).
A big question that guided my thinking on visits to these countries for the BBC was – “How do these countries actually feel on the ground, compared to my own expectations and the general consensus of opinion?”
When expectations are low – as one might generally say about Nigeria for example (although not in recent years among specialist investors in Africa) – it is easier to be positively surprised.
But the opposite is also true – and this could be a problem for Mexico, which financial investors are really quite excited about.
I returned from my travels thinking it won’t be so difficult for Nigeria and Turkey to positively surprise people, as many put far too much weight on the negative issues that are well-known – crime and corruption in Nigeria, for example, or heavy-handed government in Turkey.
Indonesia, I am less sure about. The country’s challenges are as big as I thought and I didn’t hear too many things that made me go “Wow” in terms of trying to deal with them. The country needs more of a sense of commercial purpose beyond commodities, and has to improve its infrastructure.
In Turkey, visits to white goods manufacturer Beko and Turkish Airlines, the world’s fastest growing airline, definitely made me go “Wow”, and in Nigeria, I was saying it all the time.
The creativity in that place is so easy to get enthused about, at least it was for me, and I returned full of excitement about different personal investments I might follow up on.
In Mexico I was all set to be disappointed, as expectations are so high, but the young president and his equally young colleagues are full of determination to change the place.
If you thought Maggie Thatcher stood for serious reforms, these guys make her seem like a kitten. They are reforming everything from education, energy and fiscal policy to the institution of government itself.
What about all the challenges and things that usually scare people? Well corruption is obviously one topic that all four would seem to share, and I had many interesting discussions about it in each country.
In Nigeria, Central Bank Governor Lamido Sanusi argued that corruption rarely prevents economic development – and that the growth of the economy, accompanied by improvements in education, will lead to better governance and greater transparency.
Such views are important to listen to, as an alternative to our often simplistic Western way of thinking. For many credible people in the Mint countries, corruption is a consequence of their weak past, not a cause of a weak future, and certainly not the number one challenge. It falls way down a list compared with the costs of energy and the breadth of its availability and, of course, infrastructure.
Sorting out energy policy was seen in both Mexico and Nigeria as a top priority and each country has launched a major initiatives this year, which if implemented, will accelerate growth rates significantly.
Here is an amazing statistic. About 170 million people in Nigeria share about the same amount of power that is used by about 1.5 million people in the UK. Almost every business has to generate its own power. The costs are enormous.
“Can you imagine, can you believe, that this country has been growing at 7% with no power, with zero power? It’s a joke.” says Africa’s richest man, Aliko Dangote.
He’s right. I reckon Nigeria could grow at 10-12% by sorting out this problem alone. That would double the size of its economy in six or seven years.
In Indonesia, the fourth largest country in the world, I would say leadership and infrastructure are the major challenges, though there are many more too. But challenges and opportunities sit side by side.
In one of Jakarta’s slum areas, Pluit, the land is sinking by 20cm per year because of over-extraction of water, but property prices elsewhere in the city are rocketing.
I talked to a man building the country’s first Ikea store, who reckons a third of greater Jakarta’s population of 28 million (the third biggest conurbation in the world) would have sufficient disposable income to shop at his store. As he said: “We just know it’s going to work.”
In Turkey of course, its politics and the combination of a Muslim faith with some kind of desire to do things the Western way is a unique sort of challenge. Some might argue the same challenge exists for Indonesia but I returned thinking this was not the case. In Jakarta at least, the Western way of doing things seems to be generally accepted – in striking contrast with Turkey.
So can the Mints join the top 10 largest economies in the world, after the US, China, the rest of the Brics and maybe Japan?
I think so, though it may take 30 years.
I look forward to going back to each of them more regularly now I am helping to put them on the map, just as happened with the Bric countries 12 years ago.