Who are the EAGLEs?

In late 2010, BBVA Research created a grouping of emerging markets (EM) called EAGLEs (Emerging and Growth-Leading Economies), whose contribution to World economic growth in the next ten years is expected to be larger than the average of the leading industrialized nations, namely the G6 countries (due to its size the US is excluded from the benchmark but not from comparisons with the EAGLEs). As a part of the proposal, the EAGLEs' Nest is a watch list of countries with expected incremental GDP in the next 10 years(1) to be lower than the G6 average but higher than the smallest contributor of that group. These economies may be part of the EAGLEs in the future if they are able to improve their performance above the current forecasts. Hence the EAGLEs concept is dynamic in the sense it is not a fix group of economies, but rather a club of elite EM whose membership is revised once a year (Chart 1).

Beyond the BRICs concept

In the past two decades, we have witnessed the convergence of the share of World GDP between EM and developed countries. This major transformation in the international investment scenario casts our focus on the growth-leading emerging economies. Thus, several groupings of countries, such as the BRICs, were coined, but these static concepts cannot capture the dynamic panorama of emerging economies. The 45 EM we considered in our analysis(2), even after excluding the BRICs, contributed more than the G6 countries to the growth of World economy during the 1991-2011 period (Chart 2). Indonesia and Korea's contributions were larger than the one from Russia, while Mexico had a larger incremental GDP than Germany in the past two decades. Such an accelerating economic evolution demonstrates that investment opportunities should not be limited to the BRICs, and a quantifiable and extensive spectrum of key emerging markets, such as EAGLEs, should be brought to the fore.

Recap of EAGLEs reports

In our 2011 EAGLEs Annual Report, we identified 10 economies that fulfilled the criteria to become an EAGLE: China, India, Brazil, Indonesia, Korea, Russia, Mexico, Egypt, Taiwan and Turkey. The expected aggregate contribution of the EAGLEs to the World's incremental GDP was around 50% in the 2010-2020 period, whereas the G7 countries would only reach 14%. The Nest consisted of 12 members: Thailand, Nigeria, Poland, Colombia, South Africa, Malaysia, Vietnam, Pakistan, Bangladesh, Argentina, Peru and the Philippines, which as a group was expected to contribute 8% to growth of World's economy in the following ten years.

On February 2012, BBVA Research released the 2012 EAGLEs Annual Report. The membership of EAGLEs was revised according to the latest forecasts, validating the advantage of a dynamic approach: all other countries have maintained their EAGLEs status while Egypt fell out. The 9 EAGLEs are expected to contribute by 58% to the growth of World's economy between 2011 and 2012, contrast with 16% for the G7 countries. There are 3 new members listed in the Nest under this year's revision: Egypt, which has dropped from last year's EAGLEs list, Chile and Ukraine. The 15 Nest countries will together contribute 10% to the World's incremental GDP in the next ten years.

BBVA Research is uniquely positioned to be a provider of information on emerging economies due to its presence in Latin America and Asia, and its long standing analysis of the emerging world. The BBVA EAGLEs initiative is part of an effort to make BBVA's knowledge on emerging markets available to clients and interested parties. In addition to the annual EAGLEs Economic Outlook, the current stage of this project also includes quarterly reports and economic watches on ad-hoc issues. BBVA Research is a team of about 200 economists and strategists located in the Western Hemisphere, Europe and Asia.

 
(1) Incremental GDP in the next ten years=GDP in ten years time-current GDP

(2) 45 Emerging Markets:  Argentina, Bahrain, Bangladesh, Brazil, Bulgaria, Chile, China, Colombia, Czech Rep, Egypt, Estonia, Hungary, India, Indonesia, Iran, Jordan, Korea, Kuwait, Latvia, Lithuania, Malaysia, Mauritius, Mexico, Morocco, Nigeria, Moan, Pakistan, Peru, the Philippines, Poland, Qatar, Romania, Russia, Slovak Rep., South Africa, Sri Lanka, Sudan, Taiwan, Thailand, Tunisia, Turkey, Ukraine, the UAE, Venezuela and Vietnam.