Crouching CIVETS, hidden BRICs

26 August 2010 By Martin Hutchinson

President Jacob Zuma wants South Africa to leap from the emerging CIVETS grouping into the club representing the biggest fastgrowing economies. That would bring a deluge of foreign investment. But Zuma has plenty to prove including that he can avoid the BRICs worst failings.

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South African President Jacob Zuma told reporters during a state visit to China on Aug. 25 that South Africa wanted to be considered among the BRIC group of leading emerging markets.

South Africa has a population of 49 million, growing at 0.3 percent per year, of which 10 percent are white and 12 percent coloured or Asian. Its GDP in 2009 was $287 billion at the official exchange rate or $10,300 per capita at purchasing power parity.

GDP declined by 1.8 percent in 2009, and is expected by the Economist panel to grow at 2.8 percent in 2010 and 3.7 percent in 2011. Inflation was 4.2 percent in the year to June 2010 while the 3month interest rate is 6.5 percent. The unemployment rate is running at 25 percent. South Africa's Gini (inequality) index of around 60 makes it among the most unequal countries in the world. It is ranked 55th of 180 countries on Transparency International's 2009 Corruption Perceptions Index.

Goldman Sachs chief economist Jim O'Neill in 2001 defined the BRIC group of emerging markets Brazil, Russia, India and China that he foresaw would increasingly dominate global economic growth. More recently a second tier CIVETS group of emerging markets has been identified, consisting of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.

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