It was in 2001 that the term BRIC was coined. This one acronym standing for Brazil, Russia, India and China encompasses the beginning of what economists predict is the new world order in global economics. Now those markets are all the rage. And recently, China made a surprising bid to include South Africa on the list. But some analysts have a different idea. An entirely new list.
That’s where Mexico, Indonesia, South Korea and Turkey come into focus. With a new acronym – MIST. As the only European country in this new mix, Turkey has a lot to live up to. But it seems that this crucial link to the Middle East and Europe is poised to deliver. The Turkish economy did better than any other country in the Group of 20 nations, except of course China, expanding 8.9% annually in the first three quarters of 2010. How does Turkey do it? The country’s reputation as an automotive hub is well known. Much of the vehicles produced in Turkey are exported, with Bloomberg estimates stating that three of every four vehicles make their way overseas. But there is much more to Turkey.
Known as a value tourist destination in Europe, Turkey’s Ministry of Tourism has set long-term goals of making the country one of the top five destinations in the world by the year 2023. Istanbul has already built a firm and growing reputation as a shopping hub in Europe. Notwithstanding Paris, the ultra-chic shopping capital of the world, Istanbul has the biggest mall in Europe with the gigantic Cevahir Mall, the seductive allure of Middle Eastern exoticism and European pragmatism adding to its charm. Tourism receipts in 2010, in fact, jumped to $24 million from $22 million in 2009, despite the lingering effects of the economic recession. No wonder that Turkey plans to add 25 new shopping malls this year alone to go with the existing 266 in the country!
We had written earlier about growing investor interest in Turkey, and the country’s rapid growth as an energy hub in Eastern Europe. All these factors – burgeoning tourist arrivals, shopping appeal, and the country’s status as a manufacturing and energy hub, could push Turkey up to become Europe’s third-largest economy by 2050, predicted by Goldman Sachs. But there are an equal number of factors that can impede Turkey’s growth. Its over-reliance on the automotive sector is one. Unemployment remains high and the Organization for Economic Cooperation and Development has lamented what it terms ‘excessive labor market regulation,’ calling for more regulatory reforms. Despite its attractiveness as a tourist destination, Turkey ranks a lowly 56 on the World Economic Forum’s 2009 Travel & Tourism Competitiveness Index. Does the country have some challenges? Plenty. Does it have potential? You bet. Jim O’Neill, the creator of the new term MIST, explained to the Financial Times his reasoning for including Turkey in this new category, stating that an economy that is already 1% of global GDP or more “has the potential for that to rise, has the ability to be taken seriously.” Given this, Turkey is definitely going to be taken seriously, MIST or BRIC.
Postcards from Around the World
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