The term BRIC used to describe rapidly growing economies of Brazil, Russia, India and China is now considered old news. Today, it’s all about the CIVETS countries…
Dubbed the ‘new BRICS’ by HSBC’s former Chief Executive Officer Michael Geoghegan, the CIVETS is made up of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. Seen as the next generation of fast growing economies, each nation has something unique to offer – some sizable populations and others a wealth of natural resources. Geoghegan has further reiterated this by saying: “Each [nation] has a large, young, growing population. Each has a diverse and dynamic economy. And each, in relative terms, is politically stable.” Consequently, making these countries perfect trading destinations for UK businesses.
Here’s what each CIVETS country has to offer:
Colombia is one of the UK’s 19 priority markets around the world and one that the government aims to double bilateral trade with by 2015. At nearly five times the size of the UK, Colombia is the 33rd largest economy in the world and has a population of 45.7 million people. It is one of the most open markets in Latin America and enjoys twelve free trade agreements with markets around the world, including the EU, which came into effect on 1st August 2013.
With 6% growth in 2012 and a reported GDP of £878.2 billion in the same year, Indonesia is one of UKTI’s High Growth Markets. And with a growing affluent middle class of around 45 million, it’s an emerging market that definitely needs to be on UK businesses’ trading radar.
As the world’s fourth most populous country, sixteenth most prosperous and largest economy in South East Asia, Indonesia presents many opportunities for UK businesses across a range of sectors. The UK’s principal exports to Indonesia include pulp and waste paper, power generating and industrial machinery, organic chemicals, essential oils and perfume materials.
Designated as one of UKTI’s High Growth Markets, there are real opportunities for small businesses in Vietnam. It stands out as one of the most vibrant economies in Asia and has a large population of almost 89 million, over half of which is below the age of 30. Its demographic distribution is a major reason why the UK government considers Vietnam to possess a culture of enterprise, making it very attractive for UK companies. Having shared a 40-year alliance, the UK and Vietnam further strengthened ties by signing a Strategic Partnership Agreement back in 2010 where both countries agreed to explore new ways to access each other’s markets.
Egypt is an emerging market offering a multitude of business opportunities to UK companies. It has a highly diversified economy (the third largest in the Middle East) with significant mineral resources. Strategically placed in the centre of the MENA region, the country is heavily import dependent, making it an export-friendly location for foreign companies.
The 2013 edition of Ernst & Young’s annual attractiveness survey in Africa reports Egypt as the second most attractive country in the continent for investment. Its population of 85 million is the largest in the Arab world and an expanding middle class with appealing demographics (half the population being under 25) provide confidence in its future productive capability and potential consumer demand. Plus, with Egypt being signatory to many regional and international free trade agreements and holding British services and goods in high regard, there are significant opportunities in Egypt for UK businesses in numerous sectors, including education, engineering, oil & gas and ICT.
Straddling two continents, Turkey is a large rapidly developing country and one of the most dynamic markets for UK businesses. It is the world’s eighteenth and Europe’s seventh largest economy with a GDP that grew by 8.5% in 2011, making it the fastest growing economy of Europe and OECD. And with its drive towards full European Union membership in full swing, UKTI predicts the Turkish economy will be the second-fastest growing economy in the world by 2018.
In 2010, Britain and Turkey agreed to a target of doubling bilateral trade by 2015. Momentum has developed since then, with trade increasing by over 40% against the target. UK bilateral trade with Turkey reached £9.1 billion in 2011, with UK exports contributing £3.7 billion.
The UK is in South Africa’s ‘Premier League’ of trading partners, with an annual bilateral relationship of more than £9.6 billion. Although South Africa can be classified as part of the BRICS, Geoghegan thought the nation was best placed as part of the CIVETS group due to its young population and growing economy. South Africa has abundant natural resources, a well-developed banking system and good infrastructure, making it a sophisticated and promising market for UK SMEs.
Emerging markets make the CIVETS the next band of countries to profit from a shift in global power. Isn’t it time for you to take advantage of these growing economies? If you’re looking for your next international trade destination, why not include one of the above markets in your export plan?
For more information on trading in the CIVETS countries, you can visit:
UKTI: working with UK-based businesses to ensure their success in international markets.
British Chambers of Commerce: providing support and guidance to UK businesses.
GOV.UK: the new central site from the government, combining Directgov and Business link, providing a simpler and faster way to locate free information and advice about importing and exporting.
Open to Export: a community driven service for small and medium sized businesses looking for help and support in exporting from the UK.