-------- Forwarded Message --------
 | | 30 September
2015
|  | ISA News
Update
| | | The Next Emerging Markets After the BRICS
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| | | Can the Next-Level Emerging Markets Offset a Downturn in China?
| The Next Six
The rise of the BRICS group of countries (Brazil, Russia, India, China and South Africa) in recent decades has had a greater impact on the global economy than any other development during this period. Led by China, the BRICS have emerged as the leading driver of global economic growth and have become some of the leading centers of global trade and investment. However, as growth has slowed in China and each of the other BRICS economies (outside of India), exporters and investors are stepping up their search for other emerging markets that will offer them significant growth opportunities in the coming years. Much of their focus is on the six emerging markets that are next in line in terms of economic scale (Mexico, Indonesia, Turkey, Nigeria, Poland and Argentina). |  Characteristics of the Next-Level Emerging Markets 
Each of these six next-level emerging markets has a number of characteristics in common. For example, they all have mid-sized economies, with total GDPs ranging from Mexico's $1.2 trillion to Argentina's $540 billion. Furthermore, they all have relatively large populations, particularly Indonesia (256 million) and Nigeria (182 million). With the exception of Nigeria, each of these emerging markets are middle-income countries, with Poland, Argentina, Turkey and Mexico having wealth levels that are well in excess of those of China and India. Furthermore, many of these next-level emerging markets are located in very advantageous locations for economic growth and investment, such as Mexico's unique access to the US market or Poland's position as the EU's fastest-growing larger economy, thanks in large part to its access to the European market and EU funding. | Opportunities for Trade and Investment
While foreign investment has flowed into most of the BRICS economies in recent decades, many of these next-level emerging markets have struggled to attract similar levels of investment. However, almost all of these next-level emerging markets are taking steps to improve their investment climates, indicating that, as growth opportunities in the BRICS economies wane, these next-level emerging markets will be in a position to realize significant increases in foreign investment. For example, Mexico and Nigeria have vast energy resources that require major investments to make them competitive in today's highly challenging energy sector. Likewise, Indonesia and Argentina also have significant natural resources and agricultural lands that will prove highly valuable in the coming years. Furthermore, many of these next-level emerging markets have relatively young populations, resulting in continued growth for their working- and consuming-age populations. This demographic situation will be in stark contrast to the situation in much of the developed world, as well as in China and Russia. | Many Challenges 
While it is clear that these six emerging markets have the potential for significant growth, it is also clear that their smaller scale provides much smaller growth opportunities than their BRICS counterparts, as the BRICS' population is three billion, while the combined population of these six next-level emerging markets is 720 million. Furthermore, many of these next-level emerging markets have suffered from high levels of economic mismanagement that have hampered their ability to compete with their larger rivals for investment or export opportunities, as well as to benefit from their natural resource wealth. Moreover, as their domestic markets are much smaller than those of China or India, they remain much more exposed to changes in demand in their key export markets or to fluctuations in commodity prices. As a result, while these next-level emerging markets provide interesting opportunities for growth in the coming years, they alone are not large enough to offset any further slowdowns in growth among the BRICS economies, particularly China. | | | SAVE 80% ON A COMPREHENSIVE ISA SUBSCRIPTION
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