Several years after the publication of the paper on the BRICS, experts and commentators began to ask the question, which are the other economies to watch in the future.
Jim O’Neil who coined the term BRICs also coined the phrase “the Next 11’ which was a list of countries with economies that offered vast potential and should therefore be watched.
These were the economies which could in the long-term become the world’s economic powerhouses.
In a research paper they were split into three categories:
- Countries that could overtake the bulk of the G7 by 2050. This group comprises Mexico and Indonesia.
- Countries that could overtake some of the G7 members. This group comprises Nigeria, Korea, Turkey and Vietnam
- The rest, which do not catch up with the developed world (but would still be economically significant). This group comprises Philippines, Iran, Egypt, Pakistan and Bangladesh.
This research was further expanded on by PWC in their ‘The World in 2050’ paper which made a number of projections on the state and positioning of national economies in the year 2050.
It’s important to note that all this modelling is theoretical and was conducted before the COVID-19 pandemic. As we all know, the pandemic and its aftermath have unleashed huge problems across the globe and therefore any of the below countries’ status is based on their ability to successfully navigate their way back out the other side of Covid 19’s insipid legacy.
Let’s take a look now at the countries that make up the ‘next 11.’
Bangladesh
Bangladesh is one of the worlds fastest growing economies, it weathered the COVID pandemic well and is on a high growth trajectory. In the latest figures from the World Bank, it saw a 6%+ growth in GDP last year alone.
Bangladesh is the world’s eight most populous country ahead of Russia and growing at a rate of 1% a year. Its population is young and creative.
A considerable amount of wealth in the country comes from the garment industry however the country is actively moving to diversify and focus on other industries.
Forecasts suggest that by 2050, Bangladesh could move from 31st place in 2016 to 23rd place in terms of GDP.
Egypt
Egypt is another country which is experiencing high-growth. For a number of years now since the Arab Spring, Egyptian Governments have been pursuing policies that strengthen an independent private sector and support commercial growth.
It launched a comprehensive strategy in 2016 with a 15 year plan put in place for economic reform and has undertaken a significant amount of structural reforms.
Agriculture and Industry are fast growing. The country managed to achieve 3%+ even at the height of the COVID pandemic. Forecasts suggest that by 2050, Egypt could move from 24th place in 2016 to 15th place in terms of GDP.
Indonesia
Along with Mexico, Indonesia is one of the two countries on this list that has the most potential for a multitude of reasons.
To begin, the country is vast in size, nearly 2 million square kilometres. Secondly it is rich in natural resources and has high levels of productivity.
The country is also low in average age at just 29.7 years old and is the world’s fourth most populous country.
The country also has a comparatively stable government which is known for sound fiscal management.
Its strategic location close to China, India and Japan as well as being connected to the Indian and Pacific Oceans only heighten the advantages for the country.
Today Indonesia is already in the world’s top 10 economies, as seen by its recent hosting of the G20 summit. By 2050 it could move from 8th place in 2016 to 4th place in terms of GDP.
Iran
Despite being once called part of an ‘Axis of Evil’ by the then US President George W Bush and despite being under some of the most intense economic sanctions ever enforced, Iran makes the list of potential economic powerhouses of the future.
This is in large part due to a. its population size and average age (88 million at 32 years), b. its vast natural resources which are not just limited to petroleum and c. its productive and entrepreneurial spirit.
Despite its autocratic regime, the country has embraced market reforms and has high levels of creativity.
Unlike its other oil rich neighbours, its economy is comparatively diverse and offers considerable potential for growth.
Iran’s future will be solely dependent on its ability to leave behind its pariah status in most of the world. If it can do this, it’s likely to see sustained economic growth, however if the status quo remains, the future looks particularly bleak for this middle eastern nation.
Mexico
Mexico, whilst often overshadowed by the USA to the north, is an economic power in its own right. It is the second largest economy in Latin America after Brazil.
It is currently on a high growth trajectory (which despite all the fallout from COVID-19) saw the country grow at around 5% in 2021.
One of the most significant advantages for the country is its proximity to the USA. It has a large trade surplus with the US and is heavily integrated into the North American supply chain.
The country has undergone vast economic structural reforms and forecasts suggest that by 2050, Mexico could become the world’s 7th largest economy ahead of the UK, Germany and Japan. The country historically has lower levels of productivity compared to other similar economies, its growth potential is based on successfully overcoming this significant challenge.
Nigeria
Nigeria is arguably Africa’s most successful & significant economy and should not be overlooked in favour of South Africa which as we discussed in a previous article was dubiously included in the BRICS countries. It beats the rainbow nation already on many fronts.
The country benefits from a large population which is the world’s 6th most populous and growing at a rate of over 2% a year. It has a highly creative and innovative culture as well as an abundance of natural resources. In recent years it has seen its domestic political system stabilise and has seen successful democratic transitions between presidents.
To continue its growth trajectory it needs to a) ensure that it stays politically stable and b) begin to quickly diversify away from being solely reliant on petroleum. Forecasts suggest that by 2050, Nigeria could move from 19th place in 2016 to 14th place in terms of GDP.
Pakistan
Pakistan is the world’s fifth most populous country and is growing at a rate of 2%, it’s also very young with an average age of just 22.8 years old. This makes it ripe for economic growth in the future.
The country has been heavily influenced by and invested in by China who together are building the CPEC-China Pakistan Economic Corridor. Pakistan has been seen as the shining example of China’s Belt and Road Initiative and has benefited from billion of dollars of Chinese infrastructure development.
Many have speculated though that due to domestic problems, they are increasingly becoming trapped by ever mounting debt which as a proportion of government expenditure is one of the highest of comparable economies.
Forecasts suggest that by 2050, Pakistan could move from 24th place in 2016 to 16th place in terms of GDP. In order to achieve this, it will need to make huge structural, political and economic reforms.
Philippines
The Philippines is a nation on the rise. It has always had vast economic potential but has been held back by a series of domestic political crises that have stifled economic development.
In recent years the country has undertaken vast structural reforms that have allowed the dynamic and entrepreneurial spirit of the Filipino people to boom.
The country’s economy is increasingly becoming diversified and it bounced back quickly from Covid-19 seeing 5.6% growth in 2021.
The country is undergoing rapid urbanisation and has a very young population of just 25 years old on average. Forecasts suggest that by 2050, the Philippines could move from 28th place in 2016 to 19th place in terms of GDP.
South Korea
South Korea is one of the world’s most technologically advanced economies and looks set to stay that way indefinitely. It is at the cutting edge of new advances.
It makes this list because unlike many other current nations of a similar size and background who will be dropping the rankings significantly in the future, South Korea is forecast to stand its ground and remain competitive.
This is largely due to the many competitive advantages the country has when it comes to technical expertise, exports and an inbuilt advantage innovation.
Forecasts suggest that by 2050, whilst dropping below some other emerging economies, South Korea would remain in the top 20.
Turkey
Turkey is an interesting case which we have covered in detail in multiple other blog posts.
It is a country with great potential but also one which is currently moving further and further away from its potential to be a leading economy of the future.
Forecasts suggest that by 2050, Turkey could be a top 10 economy.
You can read more about Turkey and its problems here.
Vietnam
Whilst previously known to the West as being the location of America’s disastrous war, Vietnam is now more well known for its highly productive economy, which until the pandemic was regularly seeing over 7% growth each year.
The country has moved away from total Communism and has been increasingly embracing market oriented policies.
The country has a high level of natural resources yet to be fully exploited, a large & young population as well as a growing manufacturing sector.
Vietnam makes and exports everything from cars to mobile phones as well as soft and alcoholic drinks, with 40% of the economy now being based on manufacturing.
The country is one of the most productive and benefits from a proximity and working relationship with China. More and more western products are now being ‘Made in Vietnam.’
Forecasts suggest that by 2050, Vietnam could move from 32nd place in 2016 to 20th place in terms of GDP.
Next week we’ll be looking at the currencies of ‘next eleven.’
