Yes, they’re small, lithe, nocturnal animals but they’re also the new emerging global economies, and like Brazil, Russia, India and China — the BRICs — they also form an acronym — the CIVETS — Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.
Now more firmly tied to the global economy, the BRICs are edging in the direction of old news. A June 2012 Economist Intelligence Unit article asserts, “Taking their place is a new group of fast-rising economies promising businesses outsized returns. …The six countries in the group are posting growth rates higher than 5 percent — with the exception of Egypt and South Africa — and are trending upwards.”
The Economist also forecasts a CIVETS growth rate of 4.5 percent over the next five years, and the Milengo Website calls them, “a potential goldmine” for businesses looking to expand internationally.
CIVETS nations are characterized by young, diverse populations, controlled inflation and relatively sophisticated financial systems, all of which adds up to rapid consumption. These countries also have characteristics that are not conducive to rapid economic growth including political instability, market volatility, and shaky liquidity and corporate governance.
Despite high unemployment rates in African CIVETS and political upheaval in Egypt, in its August 2012 article examining the health of exchange-traded funds in CIVET countries, “How Will the CIVETS ETFs Perform the Rest of 2012?” Benzinga reported, “In the first half of 2012, CIVETS countries outpaced other emerging nation groups with prominent acronyms, including BRICS... The combination of Colombia, Indonesia, Vietnam, Turkey and South Africa has performed impressively despite myriad country-specific and global headwinds.” Benzinga added, “the ETF fund tracking Egypt has been one of the top-performing country-specific ETFs in 2012…”
As reported recently in the Financial Times, critics question the wisdom of grouping CIVET countries together, especially for investment purposes, saying that aside from their youthful populations they have little else in common, unlike the BRICs’ enormous economies, which Goldman Sachs has predicted could dominate globally by 2050.
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