The global economy is undergoing a new course of action since evident from the questions the global community has countered today. Such as can Nigeria, a country in West Africa overtake a developed country in Europe? Can we envision that Vietnam and Mexico compete with Brazil and Russia? Can Pakistan be the second-largest economy in South Asia?
Goldman Sachs in late 2005 introduced the concept of N-11 countries with the motivation in which direction the development proceeds. It was not about forecasting the time but dreaming about what can happen. It includes Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam in countries that could rival the G7 as of BRIC.
In the list, not all chosen countries have similar characteristics other than Mexico and Korea. Not all areas are attractive destinations for investment. Between 1990 and 2005, the Philippines, Turkey, Mexico and Indonesia raised $170 bn through infrastructure opportunities, yet Vietnam and Turkey have such conditions to take a lead ahead of BRICs (Lawson et al., 2007). Although not all have the conditions yet well supported, some have stories that can not be seen even in developed world economies. The growth of some of those weakening countries can outstrip if their weaknesses are resolved timely and efficiently.
The N-11 has rapidly progressed in global trade. Since 2000 their share of trade in GDP has jumped to more than 35%, especially in Vietnam, Turkey and Egypt. They contributed 9% to global growth in the last years. It accounts for a 7% share in the world economy, 9% of energy consumption and CO2 consumption is less than the 30% of the contribution by BRICs (Lawson et al., 2007).
Urbanisation benefits in terms of increasing economic growth through productivity enhancement, as happened in China. The N-11 varies in terms of urbanisation. Mexico, Turkey, Iran and Korea are urbanised overwhelmingly, whereas Bangladesh and Vietnam are rural up to 75%.
Human capital is another important factor to sustain long-term economic growth. According to the UN projections, by mid-century, the N-11 life expectancy will reach G6, but there is a need to increase health spending, which is currently at $25 per capita each year in Pakistan, Bangladesh and Nigeria. Regarding another essential factor for long-term growth, technology is spreading widely in the N-11. In recent years, poor countries show a triple-digit growth trajectory in mobile phones (Wilson & Stupnytska, 2007).
Diversity within the N-11:
Concerning diversity within the Next 11, the countries are from different regions of the planet. They are not only different in terms of population, urbanisation, market development, trade strategies, and differences in development levels, but also in openness to trade and FDI policies. Since 2000, Vietnam, Turkey and Egypt showed a sharp plunge in openness to trade.
Similarities within the N-11
With discrepancy in income, urbanisation, population levels and investors’ focus, they can be categorized based on similarities as well. Korea, Turkey and Mexico can be grouped based on rising income levels. The Philippines and Indonesia are emerging as dynamic markets with challenges on the back. Nigeria, Egypt, Iran, Bangladesh, Vietnam and Pakistan are appearing on the horizon as thought-provoking stories (Wilson & Stupnytska, 2007 ).
Among all similarities, the rising middle class that is creating a prospective customer base and soaring investment opportunities is favouring the N-11 in full boom. However, investors have to rethink while keeping in view these countries’ social institutions, judiciary system and public confidence and trust scenarios ahead. Moreover, uncertainty in global commodity prices affects the domestic producers and local political events hamper the growth.
New Course of Action?
With the aforementioned past position and risk to globalization due to pandemic, the N-11 will take the position of normalizing global trade, by cooperating instead of competing at every step to make the complex process of supply chain feasible.
Following are some recommendations for the N-11 to put forth in the new course of action of World Trade Organisation:
- Stresses to reflect on Sustainable Development Goals (SDGs) while keeping in view the need to synergize against the global pandemic.
- Suggests prohibiting subsidies contributing to illegal, unreported and unregulated trade such as fisheries subsidies, which lead to collective action problems. This suggestion of prohibition of subsidies is aligned with SDG target 14.6.
- Recommends to accommodate food prices to address food security due to escalating hunger levels
- Draws attention to the amount of food wastage due to disruptions in the supply chain that lead to food security concerns as well as economic risks.
- Requests to keep the exports of the essential agriculture inputs open.
- Further recommends supporting food trade, especially with the focus to help the homeless communities – the most vulnerable to the pandemic.
- Calls for out of box thinking to normalize trade during the pandemic. There is a dire need for that global community to synergize to support Sheltersuits initiatives. Sheltersuit is a jacket, invented by a dutch designer, that can be turned into a sleeping bag. It is manufactured by Syrian refugees and provides dignified shelter to millions of homeless people — the most vulnerable from the pandemic.
- Urges the synergies to support social entrepreneurs whose entrepreneurship goals are aligned with SDGs like Sheltersuit initiators that are providing employment opportunities to refugees and warm shelter to homeless people.
With the obvious inequalities, the pandemic has revealed the hidden inequalities as well by exposing the dire need for the trade of necessary supplies. The N-11 should emphasize that the United Nations Conference on Trade and Development (UNCTAD) would be a much better host of the working group during the COVID-19 crisis and post-pandemic issues of International Trade. The World Trade Organization is already moving towards the process of re-electing its Director-General, so with the institutional instability, it would be more apt to take UNCTAD on board whose goals are more aligned with the SDGs.
Hub, I., 2021. Policy Brief: Global Trade, The Pandemic, And Multilateral Directions | SDG Knowledge Hub | IISD. [online] Sdg.iisd.org.
Hub, I., 2021. WTO Projects Trade Impacts Of COVID-19, Takes Steps To Facilitate Trade In Essential Goods | News | SDG Knowledge Hub | IISD. [online] Sdg.iisd.org.
Lawson, S., Heacock, D. and Stupnytska, A., 2007. Chapter Thirteen Beyond the Brics: A Look at the ‘Next 11’ [online]. Goldman Sachs.
Wilson, D., & Stupnytska, A. (2007). The N-11: More than an acronym. Goldman Sachs.
Wto.org. 2021. Developing and Delivering Covid-19 Vaccines Around the World [online]. World Trade Organization.