Next Eleven (N-11): Emerging Economic Powers

The Next Eleven (N-11) refers to countries identified by Goldman Sachs that have the potential to become some of the world’s largest economies in the 21st century.

Introduction

The term Next Eleven (N-11) was coined by Goldman Sachs in 2005 to describe a group of eleven countries that, while less prominent than the BRIC nations (Brazil, Russia, India, and China), are nevertheless poised to potentially become some of the largest economies in the world in the 21st century.

Historical Context

Goldman Sachs introduced the Next Eleven as a follow-up to the BRIC concept, emphasizing nations that show significant promise for high economic growth due to favorable demographic trends, substantial growth potential, and ongoing structural reforms. The N-11 includes:

1. Bangladesh
2. Egypt
3. Indonesia
4. Iran
5. Mexico
6. Nigeria
7. Pakistan
8. Philippines
9. South Korea
10. Turkey
11. Vietnam

Types/Categories

• Developing Economies: Many of the N-11 are classified as developing economies, characterized by rapid industrialization and improving living standards.
• Emerging Markets: These nations are considered emerging markets with investment potential due to their growth trajectories.
• Middle-Income Countries: Several N-11 countries fall into the middle-income category, positioned between low-income and high-income thresholds.

Key Events

• 2005: Introduction of the Next Eleven by Goldman Sachs.
• 2010-2020: Significant economic reforms and growth spurts in countries like Vietnam, Indonesia, and Bangladesh.
• 2020-Present: Continued investment interest in these markets despite global economic volatility.

Detailed Explanations

Goldman Sachs identified these countries based on several criteria including macroeconomic stability, political maturity, trade openness, and investment climate. The research suggested that these countries could emulate the economic trajectory of the BRICs.

Mathematical Models/Charts

    graph LR
	    A[Population Growth] --> B[Economic Growth Potential]
	    C[Industrialization] --> B
	    D[Investment Climate] --> B
	    E[Trade Openness] --> B
	    F[Political Stability] --> B

Importance

• Economic Diversification: Investment in N-11 offers diversification for global investors.
• Growth Potential: These countries have significant potential to drive global economic growth.
• Market Expansion: Businesses seeking to expand can find new markets within the N-11.

Applicability

• Investment Opportunities: The N-11 presents lucrative opportunities for foreign direct investment (FDI).
• Trade: Enhanced trade relationships with N-11 countries can benefit multinational corporations.
• Policy-Making: Governments can design policies to engage with N-11 markets.

Examples

• Vietnam: Known for its rapid economic growth and manufacturing capabilities.
• Indonesia: Boasts a large, young population and abundant natural resources.
• Mexico: Benefits from proximity to the US and a diversified economy.

Considerations

• Political Risk: Political instability in some N-11 countries can pose risks.
• Infrastructure: Inadequate infrastructure may hinder economic progress.
• Regulatory Environment: The regulatory landscape can affect investment returns.

Related Terms

• BRIC: An acronym for Brazil, Russia, India, and China, significant emerging economies.
• Emerging Markets: Countries that are transitioning to becoming more advanced economically.
• Developing Countries: Nations with a lower level of industrialization and income.

Comparisons

• BRIC vs. N-11: While BRIC countries have been the focus of global economic interest, N-11 provides a secondary tier of countries with high potential.
• Developed Economies vs. N-11: Developed economies have stable markets, whereas N-11 countries are characterized by growth potential but higher risks.

Interesting Facts

• Young Population: Many N-11 countries have young, dynamic populations driving domestic consumption.
• Diverse Economies: The N-11 spans diverse regions including Asia, Africa, and Latin America.

Inspirational Stories

• Vietnam’s Economic Rise: From a war-torn nation to a manufacturing powerhouse, Vietnam’s economic transformation is an inspiration for other N-11 countries.

Famous Quotes

“Investment opportunities often arise in emerging markets where the risks are greater, but so are the rewards.” — Jim Rogers

Proverbs and Clichés

• “High risk, high reward.”: Often used to describe investments in emerging markets like the N-11.
• “The early bird catches the worm.”: Signifying the advantage of early investments in N-11 countries.

Expressions, Jargon, and Slang

• FDI: Foreign Direct Investment, crucial for N-11 economies.
• Growth Markets: Refers to markets with high growth potential.
• Frontier Markets: Early-stage emerging markets, a term sometimes applied to N-11.

FAQs

What is the Next Eleven (N-11)?

The Next Eleven (N-11) refers to a group of eleven countries identified by Goldman Sachs in 2005 as having the potential to become some of the world’s largest economies in the 21st century.

Why are the N-11 countries important?

They represent significant investment opportunities and are expected to contribute substantially to global economic growth.

What are some of the risks associated with investing in N-11 countries?

Political instability, regulatory challenges, and infrastructure inadequacies are some of the risks.

References

• Goldman Sachs Global Investment Research. (2005). “The N-11: More Than an Acronym.”
• International Monetary Fund (IMF) Reports on Emerging Markets.
• World Bank Data on Developing Economies.

Summary

The Next Eleven (N-11) represents a compelling group of countries with significant economic potential. By understanding the historical context, key characteristics, and opportunities within these nations, investors and policymakers can strategically engage with these burgeoning markets. Despite the inherent risks, the rewards of tapping into these dynamic economies could be substantial.