November 2011


There is more to any Humanitarian disaster than an immediate RESPONSE. It is not earthquakes that kill people – it is buildings; and so, many countries make themselves more RESILIENT to disaster ensuring that building standards can withstand geo-meterological threats and, that logistics procedures are in place to deal with worst case scenarios and facilitate rapid response.

Resilience is important. Emergencies have been growing in scale. According to the Munich Reinsurance group, the real annual economic losses have been growing steadily, averaging US$75.5 billion in the 1960’s, US$138.4 billion in the 1970’s, US$213.9 billion in the 1980’s and in 2004, the World Bank estimated that the annual global economic costs related to disaster events average $629 billion per year, five times that of 20 years ago.

This is about local impact. There is something else; global impact – because of the nature of integrated, and stretched, global supply chains. This takes us to the third dimension or phase of any Humanitarian response – RECONSTRUCTION.

A wider impact than this

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Mature markets are struggling and emerging and developing markets are becoming increasingly attractive to companies and investors looking for growth. Put this in perspective. Despite a 25% depreciation in sterling since 2007, only 4% of UK Exports go to the so called BRICs combined – this is less than the UK exports to Sweden! The developed world has woken up to the potential in emerging and developing markets. Now is the time to do something about it and that means more than BRICs. Where else and, what are the challenges that have to be faced?

The Economic Intelligence Unit coined the term Civets (Columbia; Indonesia; Vietnam; Egypt; Turkey and South Africa) in 2009 to refer to a second division of developing markets which will grow three times as fast as mature markets this year. The EIU predicts growth rates of .9 per cent for Civets countries over the next 20 years compared with 1.8 per cent for the G7 countries.  Although it was only established in 2007, the S&P CIVETS 60 index is ahead of the S&P BRIC 40 and S&P Emerging BMI over one and three years.

There's life beyond BRICs ...

CIVETS countries all have large, young populations, with an average age of 27. This, or so the theory goes, they will benefit from fast-rising domestic consumption. CIVETS are also all fast-growing, relatively diverse economies, which means, unlike the BRICs, they should be less heavily dependent on external demand. This is a sketch and more details will follow in other blog posts on each CIVETS economy and, another group centred on Jim O’Neill of Goldman Sachs concept of the Second 11; the next eleven economies after the BRICs.  Meanwhile, here are some quick notes…

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As the developed world stagnates and shows little sign of rapid recovery, it is clear that an increasing number of Multi National Corporations will be looking harder at emerging and developing markets for the growth that shareholders look for. So, what does the future hold for big brands in this brave new world?

How do we deliver over there?

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He sold fruit on the streets of Sidi Bouzid, Tunisia; operating from a vendors cart on two square yards of public space and had to pay bribes to work undisturbed. That day, 17th December 2010, there had been an argument and so two police officers confiscated his two crates of pears ($15); a crate of bananas ($9); three crates of apples ($22) and a set of electronic scales ($179, second hand). Given the fact that he had bought his merchandise on credit and he could no longer sell it to pay his creditors back he was bankrupt. One hour after the police had closed down his business, Tarek Mohammed Bouazizi – known locally as Basboosa – set fire to himself yelling “how do you expect me to make a living” and triggered the Arab Spring. According to the Sidi Bouzid’s state office for employment and independent work, no permit is needed to sell from a cart. Unemployment in the area stands at 30 per cent. Within weeks many of the estimated 200 million Arabs who work in the informal markets of the Middle East and North Africa started to mobilise.

How else can I make my living?

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