Backgrounder: MIST Countries


By Zachary Fillingham

Back in 2001, Goldman Sachs analyst Jim O’Neill put his permanent stamp on the English language by grouping the four emerging economies of Brazil, Russia, India, and China into one handy acronym- ‘BRIC.’ Ten years later, with economic signs abound that growth within the BRIC countries was about to come down to earth, Jim went back to the drawing board to recapture some of his old magic. The result: MIST countries, the newest emerging market club that boasts a membership of Mexico, Indonesia, South Korea, and Turkey.

With the clarity of hindsight, we can now say that the BRIC countries label has been significant. What began as a purely theoretical construct meant to move investment products ended up as a self-fulfilling prophecy after the BRIC countries seized upon the label and the global importance that it implied.

But will the same eventually be said of the MIST countries? At this point it’s anyone’s guess, particularly since the cultural and political disparity that exists between the MIST countries makes the BRIC countries look like a cohesive bloc.

The MIST countries undoubtedly share a great deal of economic potential however, and this backgrounder will explain why.



Population: 114,975,406

Age Structure:

0-14 years: 27.8%

15-64 years: 65.5%

65 years and over: 6.7%

GDP: $1.155 trillion

GDP Composition: Agriculture: 3.8% / Industry: 34.2% / Services: 62%

Major Exports: manufactured goods, oil and oil products, silver, fruits, vegetables, coffee and cotton.

Transparency.Org Corruption Ranking: 100th (globally)

Mexico has a strong demographic foundation for future economic growth; something it shares with many of the other MIST countries. With a population of over 112 million, Mexico has a sizable pool of labor to draw on, and critically, this labor pool is overwhelmingly young. Currently, there are nine children for every elderly person in Mexico. And unlike most of the developed world, Mexico’s population is still growing. It reported a population growth rate of over one percent last year.

Mexico is also uniquely placed to pick up the slack in global manufacturing as wages in China rise and reduce its competitiveness in the field of low value-added production. The average manufacturing wage in China surpassed that of Mexico earlier this year, and Mexico also benefits from reduced shipping costs to the critical US market owing to its geographic position and NATO membership. These manufacturing advantages have translated into Mexico claiming an ever-larger slice of the US overall imports pie- Mexican imports amounted to 12% of US total imports last year, up from 10% in 2009.

This doesn’t mean that Mexico has supplanted China as the motor of the global economy. China, of course, still has its own sizable economic advantages. Rather, the numbers indicate that Mexico is well-situated to eat into China’s dominance of global low-cost manufacturing; a transition that China itself is encouraging in order to boost domestic wages and consumption.

The roadblocks threatening to keep Mexico from realizing the economic potential implied by the MIST countries label are well-documented: a raging drug war and persistent corruption.


Population: 248,645,008

Age Structure:

0-14 years: 27%

15-64 years: 66.6%

65 years and over: 6.4%

GDP: $845.7 billion

GDP Composition by Sector: Agriculture: 14.7% / Industry: 47.2% / Services: 38.1%

Major Exports: oil and gas, electrical appliances, plywood, textiles, rubber

Transparency.Org Corruption Ranking: 100th (globally)

Like Mexico, Indonesia has a demographic distribution that is conducive to rapid economic growth. It will experience a ‘demographic dividend’ over the next few decades, when its working-age population far exceeds elderly dependants.

Indonesia also benefits from its geography. As Southeast Asia’s largest economy, it is well placed to take advantage of the ASEAN-China Free Trade Area, and it has done just that- recording three consecutive years of GDP growth over 6 percent from 2009-2012.

The Indonesian economy stands out among the MIST countries because of its high levels of domestic consumption. Indonesian consumers account for over 60 percent of the Indonesian GDP (in China, it’s 35 percent). Robust domestic consumption has allowed Indonesia to weather the brunt of the Great Recession and continue to grow at a steady clip.

Yet the Indonesian economy is still connected to the wax and wane of the global economy. Its exports are dominated by commodities and natural resources, primarily heading to China, so it stands to reason that the Indonesian economy would suffer in the event of any Chinese slowdown. Like Mexico, Indonesia also has a problem with corruption.


Population: 79,749,461

Age structure:

0-14 years: 26.2%

15-64 years: 67.4%

65 years and over: 6.4%

GDP: $778.1 billion

GDP Composition by Sector: Agriculture: 9.3% / Industry: 28.1% / Services: 62.6%

Major Exports: apparel, foodstuffs, textiles, metal manufactures, transport equipment

Transparency.Org Corruption Ranking: 61st (globally)

Turkey’s position as one of the world’s next big emerging economies has become unassailable in the past fifteen years. Unlike the aging populations that characterize other economic powers in the region, Turkey enjoys a demographic distribution that is extremely favorable to growth, and it will soon be benefitting from the ‘demographic dividend’ of a young population in much of the same way that countries like China and Brazil are at present. And Turkey’s population is not just young; at around 79 million it represents a sizable domestic market in itself.

Another critical difference between Turkey and other regional powers is its relatively small debt-to-GDP ratio, currently hovering at around 40 percent. All of these factors combined to generate a record $22 billion in foreign direct investment (FDI) in the lead up to the 2008 global financial crisis. This impressive level of FDI was no anomaly: Turkey has the metrics of an economic power in waiting.

South Korea

Population: 48,860,500

Age Structure:

0-14 years: 15.1%

15-64 years: 73%

65 years and over: 11.9%

GDP: $1.116 trillion

GDP Composition by Sector: Agriculture: 2.6% / Industry: 39.2% / Services: 58.2%

Major Exports: semiconductors, wireless telecommunications equipment, motor vehicles, computers, steel, ships, petrochemicals

Transparency.Org Corruption Ranking: 43rd (globally)

South Korea is somewhat of an exception within the MIST countries, but not for any lack of economic dynamism. It stands apart because it can, in many respects, already be considered a developed economy, and it is often classified as such by everyone from the lowly student to the massive bureaucracy like the OECD.

By most indications, South Korea is a developed economy: it boasts a per-capita income of US $27,000, its economy is export-driven and powered by high value-added manufacturing, and it has mature political institutions that help reduce corruption.

South Korea’s advanced position on the economic development arc means that its population is also substantively different than other MIST countries. It is the smallest population in the club and thus represents the smallest domestic market, and in terms of age distribution it is markedly older than the other MISTs. It should also be noted that the rapid ‘graying’ that historically follows a demographic dividend will be more pronounced in South Korea. It has a population growth rate of just 0.2% (176th in the world) and is known for having some of the strictest immigration laws within the OECD.


The MIST acronym was born of one singular desire: to move Goldman Sachs investment products (particularly the N-11 Equity Fund). Yet that doesn’t mean it can’t teach us something. There is a solid economic argument to be made for any member of the MIST countries being the next big launch pad for global economic growth (except for South Korea, which arguably has already launched). But grouping the four of them together and implying that they’re a cohesive bloc should be avoided at all costs.

Zachary Fillingham is a contributor to

Geopolitical Monitor is an open-source intelligence collection and forecasting service, providing research, analysis and up to date coverage on situations and events that have a substantive impact on political, military and economic affairs.

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