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After the "BRIC" here come the "CIVETS”

There’s a new block of developing countries over the next decade that could generate growth levels comparable to those of Brazil, Russia, India and China, opening an array of new challenges and opportunities. These are the Civets: Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.

As well as the BRIC’s group, the CIVETS’s group (a term coined by Goldman Sachs, who created the acronym BRIC in 2001) consists of countries differing in culture and geographical location but that have important similarities. Firstly large populations, young and growing. In relative terms, they have a relative economic and political stability, absence of trade imbalances, inflation under control, a low debt ratio [the only exception seems to represent Egypt who has inflation above 10% and a debt to GDP ratio around 80%].

Michael Geoghegan, chief executive of HSBC, the Hong Kong and Shanghai Bank, said that we are entering a new phase for the global economy and emerging economies will grow at a rate three times higher than the western markets and companies that really want to take this path must adopt a global platform.

Suffice it to say that the main trade routes are bound to change soon.

Over the past five years the exports of developing countries reached their highest, and in many cases these aren't directed to the West.

For example, only one third of India's exports goes to Europe or the USA.

Geoghegan's opinion about the next decade is that the ability to support these new routes of world trade will be vital for service firms. “Within three years, for the first time, the economic firepower of emerging markets will overtake the developed world, measured by purchasing power parity. It's a defining moment.”

According to a study by the Economist Intelligence Unit (EIU) in the next two decades the CIVETS's countries economies will have an average growth rate of 4.5%, just below the 4.9% estimated for the Bric's group and more higher than 1,8% forecast of the G7 countries.

With these very high estimates of growth for the next few years, CIVETS are certainly candidates for future new engine for the international economy.