Better investments outside the BRICS
By George Orwel
A decade ago, Goldman Sachs Asset Management Chairman Jim O’Neill coined the acronym BRICS to refer to Brazil, Russia, India, China and South Africa, at the time fast-emerging economies with firm prospects of attracting the most investment and becoming the most dominant and positive force in the world economy. Now O’Neill cites better investments in other emerging markets, although he notes they will have to improve performance in economic policy, education and technology to sustain their pace of growth. “In terms of growth rates, other countries will perhaps grow at a similar fast rate as the BRICS, some more,” O’Neill says.
Territories covered by TNJ’s African and Caribbean indexes, including Egypt and Nigeria, are among these more attractive options. In 2011, five of the 20 projected fastest-growing countries were in Africa, according to the International Monetary Fund: Ghana at 13 percent growth; Eritrea at 8.2 percent; Angola, 7.8; Ethiopia, 7.5 percent; and Mozambique, 7.2 percent. South Africa, which fell in the TNJ AfriCarib Index as debate over nationalization took a toll on investment, was able to sell $1.5 billion worth of bonds early January, tapping international markets for the first time in nearly a year. And while these are still hard times for Egypt — the local stock index tumbled sharply in December; investors have shunned the country
as political tensions persist; and ratings agency Moody’s Investors Services
cut its bond to junk status — the
outlook brightens in the medium to long term.
In the Caribbean, where lackluster export demand and a slow recovery in tourism and remittances constrained overall regional growth in 2011, Trinidad and Tobago’s economic performance has been comparatively great, thanks to its oil and natural gas wealth. It rose in TNJ’s AfriCarib Index in December. Moody’s says its high ratings are supported by relatively high levels of economic development and low sovereign debt. Moody’s maintained Jamaica’s B3 bond rating because the GDP is higher than similarly situated nations, though annual growth has averaged less than 1 percent a year in the past decade. Having recovered from a three-year recession in 2011, Jamaica expects to power ahead this year. The IMF forecasts 2.4 percent growth for Jamaica in 2012 and 2.6 for Trinidad and Tobago.