'Civets' hailed as the new Bric

Up to now, media attention and investment performance in emerging markets has been focused mainly on the big four of Brazil, Russia, India and China. But is it time to take the 'Civets' seriously?

It was Goldman Sachs that coined 'BRICs' in 2001 and more recently came up with the 'Next 11' - the group of 11 emerging market countries with the largest populations outside of the Brics which it believed would be most likely to challenge the growth levels of developed world economies over the next few years.

Meanwhile HSBC chief executive Michael Geoghegan is credited with coming up with 'Civets' - made up of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa - which are being tipped by some to be the particular emerging market growth stories to watch in the next few years.

Research from The Economist's Intelligence Unit predicts the Civets will post annualised GDP growth of 4.5% over the next twenty years.

This is way ahead of estimates for the G7 countries, which come in at around 1.8%, although it still lags just behind predictions for the Brics —where the research predicts annual growth of 4.9%.

As the 'Next 11' is purely made up of the non-Bric emerging markets with the biggest populations, Civet members Indonesia, Turkey, Vietnam and Egypt all make that list, but the Economist argues that the geographically diverse Civets all have reasons beyond their population size to suggest they are among the biggest future emerging market winners.

All have significant and young populations, ranging from Indonesia's 240 million at the top end, to Colombia's 49 million and South Africa's 46 million.

The latter two only just missed out on the 'Next 11' list by population size too.

Diverse economies

Each of the Civets also has a relatively diverse economy which is not over-reliant on commodities and with the exception of Egypt, The Economist research points out that inflation levels look to be pretty much under control.

Of the Civets, the name of which can also refer to small, mostly arboreal mammals native to the tropics of Africa and Asia, none have hugely inflated current-account deficits although Vietnam is the worst offender in this department.

As is the case elsewhere, fiscal deficits have generally risen following the global financial crisis but the public debt levels of each of the six Civets remains reasonably low.