Where in the world can you still expect to get minted? The clue is in the question. Jim O’Neill, the economist of “BRIC” fame recently invented a new acronym, MINT, to showcase the next four economic frontiers.
O’Neill’s prophetic acronym was coined in 2001 to predict the economic emergence of Brazil, Russia, India and China (BRIC) and resulted in a rush of new-found wealth in all four economies. Over the past decade we’ve seen the number of millionaires swelling in these countries. Indian millionaires have developed a fad for yachts, Russians for Knightsbridge, Chinese for fine wine and apparently, the latest thing to have in Brazil, is a helicopter.
Just as these BRIC economies come off the crest of the wave and start lowering their growth predictions, O’Neill has come up with a new acronym for the decade: MINT, meaning Mexico, India, Nigeria and Turkey.
So, will the MINTs follow in the wake of the BRICs and become the next great wealth frontier? Research conducted by wealth consultancy WealthInsight, together with Spear’s magazine, which compares the MINTs, BRICs and G8, suggests so. Led by Indonesia, which expects to see a 22 percent increase in the number of resident millionaires in 2014, the MINTs are set to overtake the BRICs over the year ahead. In doing so, however, they will leave the old G8 countries far behind. The countries in the G8 are struggling in the single digits and the growth of millionaires in the US is under half that of Indonesia.
Green refers to MINT countries, red to BRICs and white to the G8.
These are startling figures and here’s why: data on millionaire populations is akin to estimates on the size of the middle class. Though the term is rooted in English traditionalism, the idea of the “middle class” is important to economists. So, when the World Bank estimates that the Nigerian middle class has grown by 28 per cent, there is a data domino effect with the last domino being GDP. In simplistic terms, when the GDP rises, so does the local economy, resulting in prosperity and poverty reduction … or so the neo-liberal theory goes.
This is when figures on millionaires come in. They allow perspective by looking at the extreme ends of the data domino chain: poverty and prosperity. If the number of millionaires rises faster than poverty reduction, then there are serious problems of inequality to be addressed. You might think such a scenario absurd, but look at what’s happening now in Nigeria: while the percentage of millionaires grows at 17.1 percent, the number of Nigerians living below the poverty line is also growing. Between 2010 and 2012 the percentage of Nigerians living below the poverty line grew to 67 per cent according to the World Bank.
So, to misquote the renowned phrase: a rising tide does not lift all boats. Many will remain firmly on the sea bed during 2014, as poverty sees no change or even rises in some MINT countries. But perhaps we shouldn’t be surprised that O’Neill’s prophetic acronyms turn out to be a double-edged sword. The blazing path to extreme wealth, buttressed by the less fortunate, has already been set by the BRICs. MINTs should learn from this and promote measures to counter extreme inequality.
In the meantime we can only guess what extravagance will arise from a new millionaire class in Mexico, Indonesia, Nigeria and Turkey. We thought we saw it all with the BRICs.