Building with new BRICS: The Lucky Seven

By Ken Witt

One of the things highlighted by the recent financial crisis about investing in emerging economies is the importance of good governance. In a recent Forbes article,” The new world of business,” Ian Bremmer says that while the BRICS economies (Brazil, Russia, India, China and South Africa) have all become economic “giants,” they no longer offer the best opportunities for investment.

Growth is slowing in China, Brazil is plagued by scandal and at the edge of a recession, Russia has been impacted by poor political choices and sanctions, as well as falling oil prices, and South Africa has also had its share of political turmoil.

Bremmer identifies the following countries that seem to offer the key ingredients of stability and resilience. His rationale for the “Lucky Seven” is summarized below: 

  • India – the lone BRIC worth holding on to; “the change has come” with new policies and incentives to attract investment
  • Indonesia – new leadership is committed to delivering on promises
  • Malaysia – incumbent government is responding to demands for change
  • Mexico – deep reform process is in the works; eager to attract foreign investment
  • Columbia – consensus on economic policy should mitigate political battles
  • Poland – good government is accelerating economic reform and investment
  • Kenya – less turmoil than Nigeria and South Africa; majority in both legislative chambers is lending support for necessary infrastructure

If your company is already investing or considering investing in emerging markets around the globe, the overview briefing “The extended value chain”’ in the CGMA collection Rethinking the Value Chain, provides resources for positioning companies to take advantage of opportunities and mitigate the risks in emerging markets.