Blog: MINTs follow BRICs
Dave Leggett | 7 January 2014
Jim O'Neill, the economist at Goldman Sachs who coined the term BRIC, has been at it again. He's coined a new acronym for a group of four countries that he sees as being in the next emergent wave of global economic giants. They're the MINTs: Mexico, Indonesia, Nigeria and Turkey. Click below to read more. I caught the radio instalment looking at Indonesia this evening. There's an upside and a downside. The guy from IKEA, for example, was eyeing huge future growth for the flatpack furniture business in and around Jakarta, an urban area with a population of 28m people that is growing fast. The economic and demographic projections are staggering.
It's a fascinating tale of megacities, of unplanned growth (much construction but little supporting infrastructure), of a certain antipathy towards some foreign investment (mining sector) and also some hangover from the tough IMF prescriptive medicine in the aftermath of the Asian financial crisis of the late 1990s. There is corruption and cronyism, the central state not all that powerful.
So, yes, the opportunities are there and there is much potential for economic growth and, of course, the car industry could be a big beneficiary as average incomes rise. It's not, though, without risks. Cars need roads. As O'Neill put it: cities are great for economic growth and development; they bring together the conditions to encourage consumption, but you need a policy lead. Jakarta is already a massive city in global terms and yet it has no subway, a glaring omission; the traffic jams are already epic. The next round of elections could determine whether Indonesia makes some of the right policy choices, or the wrong ones, he said. All in all, a cautionary tale for the auto industry. Worth a listen on the BBC website's iPlayer, if you can access that.
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