UK needs to look beyond BRIC markets to emerging CIVETS
By Torrie Callander, Global Reach Partners. The opinions expressed are his own.
The world’s mighty are currently meeting in Davos, Switzerland to discuss the progress – or lack of progress in some cases – of the global economic recovery. The financial crisis and resulting recession has brought many of the world’s major economies into the same boat. Subsequent years have seen a shift towards collective policy making in order to aid recovery. Here in the UK there has been a major shift in economic policy during that time, as a result of both collective world policy and a regime change at home. But this refocusing of our economic policy has to be taken further.
The UK of the industrial revolution was renowned as the “workshop of the world”. Now, with the overwhelming focus on a world-leading services sector, the UK is barely a workshop at all. This has got to change if we are to meet the Government’s ambitious growth plans.
Britain needs to recalibrate its commercial offering and refocus on manufacturing in order to vastly grow the export sector. The government is making gestures to achieve this aim. Already they have set a target of 100,000 UK businesses entering the export market for the first time within the next five years.
We are already making progress. Exports to the EU – our primary market place – were up 18.3% year on year in May 2011. We are making gains in the emerging markets too, with exports to China up 43.7% and India 43.4% in the same time period.
However, the BRIC markets (Brazil, Russia, India, China), are now well established as market places for UK exports and, although these relationships must be kept , UK businesses would be wise to realign some of their focus onto the CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa).
The CIVETS are the emerging markets most widely tipped for sustained growth over the next decade. As a collective, these nations have shown excellent economic growth in recent years. They share in the opportunity presented by a young population and they all have increasing levels of personal wealth. As such, these countries are the ideal marketplace for commercial and consumer offerings from the UK.
Some of the CIVETS are – of course – more attractive than others. Indonesia is the fourth most populous country in the world, and saw economic growth of 6.1% in 2010. Columbia is currently the third largest supplier of oil to the USA and is reaping the benefits of having reinvested its wealth into infrastructure projects. Perhaps most importantly though, Turkey has spent the last ten years on economic and political reform which has put them in a strong position for acceptance into the EU. UK businesses should be giving serious consideration to these market places.
There can be no doubt that the UK needs to up the ante of its manufacturing and export offering in order to achieve the Government’s growth targets. The fact is that our current export market is in turmoil and the previous EM targets of China, India, Brazil and Russia are now well established. The focus must turn to the CIVETS as the next emerging market export opportunity. Let’s hope the wheels are put in motion in Davos this week.