The Island - 23/07/2014
By Nikita Samaratunga
In 2001, economist Jim O’Neill famously coined the term ‘BRIC’ to refer to the newly emerging economies of Brazil, Russian, India, and China. In 2014 O’Neill has now popularized a newer and what the BBC calls ‘fresher’ term – MINT – Mexico, Indonesia, Nigeria and Turkey (put forward by Fidelity Investments).
In a time where many developed nations are facing a crisis with regard to their ageing population, what makes MINT stand out, according to O’Neill, are their favourable demographic statistics. Mexico, Indonesia, Nigeria and Turkey are four of the world’s most heavily populated emerging economies, with populations of 118, 237, 174 and 73 million respectively. To add to that in the next 20 years all four countries will see a rise in the number of economically active workers to inactive - meaning they will have a declining dependency ratio. What this will do is ease the burden off the government. In recent years an increasing dependency ratio has plagued countries from the UK to Japan, putting pressure on government budgets and the shrinking work force. Thus the demographics of MINT will certainly be a source of envy for their more developed counterparts.
In an interview with BBC, Mexican Foreign Minister Jose Antonio Meade Kuribrena alluded to another factor that had allowed MINT to stand out. This was the four countries favorable geographical location. Mexico neighbors the world’s current superpower the USA and borders Latin America, a region that has exhibited high growth rates and enormous potential in recent years. Indonesia is strategically located in South-east Asia, with Turkey straddling the West and East. With increased investments and partnerships being made on the African continent, Nigeria has significant potential given its access to Atlantic Ocean.
According to World Bank statistics in 2013 Mexico, Indonesia, Nigeria and Turkey grew by 1.1%, 5.8%, 7.0% and 4.0% respectively. The MINT’s in comparison to the BRIC nations have smaller economies. However, as growth in the BRIC nations has slowed, attention has been focused on MINT who are expected to show strong sustained growth over the coming decade. However all that glitters is not gold- the MINT nations have also been plagued with problems from political instability to corruption, as well as feeling the aftershocks of the recent global financial crisis.
Sri Lanka enjoys a healthy trade relationship with IRC, with India, Russia and China being major export destinations for Sri Lankan products. Furthermore politically the country has, in particular, over the years, seen the strengthening of ties with Russia and China. Sri Lanka’s relations – both economic and political – with MINT, remain surface. There is huge potential however to be explored given the young demographic which makes for a large labor pool and consumer market; pro-business legal systems in place and governments that have made economic growth their top priority, particularly in countries such as Mexico; and the strategic positioning of these four countries. Thus, in a day and age where the Sri Lankan export sector, one of the main drivers of economic growth and development in the country, is characterized by product concentration and heavy dependence on a few markets, the emergence of MINT provides a opportunity for Sri Lanka to expand its horizons.
Currently the Mexican, Turkish and Indonesian markets respectively make up 1.5% 1%, 0.5% of our exports (2013) (there are currently no Sri Lankan exports entering the Nigerian market). The rise of MINT presents an opportunity to increase our share in these markets, in line with the objectives of the Mahinda Chintanaya and the Export Development Board of Sri Lanka, which aims to increase exports to markets other than the EU and USA. Looking at the current imports of MINT there is significant potential in the export of rubber and related products, apparel, precious stones, and fish to these four countries, all of which are Sri Lanka’s key export sectors. What the country must do is view the rise of MINT as an opportunity to reduce its dependency on the traditional markets of Europe and North America and strengthen relations with these new and emerging markets.
By Nikita Samaratunga
In 2001, economist Jim O’Neill famously coined the term ‘BRIC’ to refer to the newly emerging economies of Brazil, Russian, India, and China. In 2014 O’Neill has now popularized a newer and what the BBC calls ‘fresher’ term – MINT – Mexico, Indonesia, Nigeria and Turkey (put forward by Fidelity Investments).
In a time where many developed nations are facing a crisis with regard to their ageing population, what makes MINT stand out, according to O’Neill, are their favourable demographic statistics. Mexico, Indonesia, Nigeria and Turkey are four of the world’s most heavily populated emerging economies, with populations of 118, 237, 174 and 73 million respectively. To add to that in the next 20 years all four countries will see a rise in the number of economically active workers to inactive - meaning they will have a declining dependency ratio. What this will do is ease the burden off the government. In recent years an increasing dependency ratio has plagued countries from the UK to Japan, putting pressure on government budgets and the shrinking work force. Thus the demographics of MINT will certainly be a source of envy for their more developed counterparts.
In an interview with BBC, Mexican Foreign Minister Jose Antonio Meade Kuribrena alluded to another factor that had allowed MINT to stand out. This was the four countries favorable geographical location. Mexico neighbors the world’s current superpower the USA and borders Latin America, a region that has exhibited high growth rates and enormous potential in recent years. Indonesia is strategically located in South-east Asia, with Turkey straddling the West and East. With increased investments and partnerships being made on the African continent, Nigeria has significant potential given its access to Atlantic Ocean.
According to World Bank statistics in 2013 Mexico, Indonesia, Nigeria and Turkey grew by 1.1%, 5.8%, 7.0% and 4.0% respectively. The MINT’s in comparison to the BRIC nations have smaller economies. However, as growth in the BRIC nations has slowed, attention has been focused on MINT who are expected to show strong sustained growth over the coming decade. However all that glitters is not gold- the MINT nations have also been plagued with problems from political instability to corruption, as well as feeling the aftershocks of the recent global financial crisis.
Sri Lanka enjoys a healthy trade relationship with IRC, with India, Russia and China being major export destinations for Sri Lankan products. Furthermore politically the country has, in particular, over the years, seen the strengthening of ties with Russia and China. Sri Lanka’s relations – both economic and political – with MINT, remain surface. There is huge potential however to be explored given the young demographic which makes for a large labor pool and consumer market; pro-business legal systems in place and governments that have made economic growth their top priority, particularly in countries such as Mexico; and the strategic positioning of these four countries. Thus, in a day and age where the Sri Lankan export sector, one of the main drivers of economic growth and development in the country, is characterized by product concentration and heavy dependence on a few markets, the emergence of MINT provides a opportunity for Sri Lanka to expand its horizons.
Currently the Mexican, Turkish and Indonesian markets respectively make up 1.5% 1%, 0.5% of our exports (2013) (there are currently no Sri Lankan exports entering the Nigerian market). The rise of MINT presents an opportunity to increase our share in these markets, in line with the objectives of the Mahinda Chintanaya and the Export Development Board of Sri Lanka, which aims to increase exports to markets other than the EU and USA. Looking at the current imports of MINT there is significant potential in the export of rubber and related products, apparel, precious stones, and fish to these four countries, all of which are Sri Lanka’s key export sectors. What the country must do is view the rise of MINT as an opportunity to reduce its dependency on the traditional markets of Europe and North America and strengthen relations with these new and emerging markets.
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