The Mist Countries

THE THE MIST COUNTRIES – Mexico, Indonesia, South Korea & Turkey: Are MIST countries becoming the new BRICs? : For many investors, Mexico, Indonesia, South Korea and Turkey have taken over from the BRICS becoming the four biggest emerging markets, and growing faster than their major rivals. BRIC inventor Jim O’Neil from Goldman Sachs proposed the new term MIST term for Mexico, Indonesia, South Korea and Turkey, which are the four biggest markets in the Goldman Sachs N-11 Equity Fund. The MIST economies more than doubled during the last decade, according to Bloomberg, and continue surging despite global economy concerns.

Mexico’s IPC Index has climbed 11% this year, comparing with a 2. 8% growth of Brazil’s Bovespa. Meanwhile Turkey’s ISE National 100 gained 28 percent, compared to 13% gain of BSE India Sensitive Index and 2. 6% gain in Russia’s MICEX. Though the MIST nations outperformed the BRIC in pace of growth, its economic output still can’t approach the BRIC. Total GDP for the MIST nations was $3. 9 trillion last year, compared to $13. 5 trillion of BRIC economies and $7. 3 trillion for China alone. Comment: If you go to the Wikipedia page about BRIC you will read that Mexico and South Korea tried to become part of BRIC.

It was used the name BRIMC…. But it failed because the BRIC were Core-Hubs in their areas (Eurasia, South America, Far East, South East Asia) while the MIST are a second dependent layer around the Hub. In fact, and to be precise there are three World Hubs-Cores: USA, GERMANY (Eurozone) and CHINA. Turkey depends on Europe, Mexico depends on the US, South Korea depends on China…. So, if those hubs are hit, the MIST will be hit MUCH MORE, as we remember from the Bhat crisis. Russia could be an Eurasian and Energy Hub-Core…. even if still not fully developed, so it is still a layer of the E. U. Hub. Mexico Economy – overview:

Mexico has a free market economy in the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is roughly one-third that of the US; income distribution remains highly unequal. Since the implementation of the North American Free Trade Agreement (NAFTA) in 1994, Mexico’s share of US imports has increased from 7% to 12%, and its share of Canadian imports has doubled to 5%.

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Mexico has free trade agreements with over 50 countries including Guatemala, Honduras, El Salvador, the European Free Trade Area, and Japan – putting more than 90% of trade under free trade agreements. In 2007, during its first year in office, the Felipe CALDERON administration was able to garner support from the opposition to successfully pass pension and fiscal reforms. The administration passed an energy reform measure in 2008 and another fiscal reform in 2009. Mexico”s GDP plunged 6. 2% in 2009 as world demand for exports dropped, asset prices tumbled, and remittances and investment declined. GDP posted positive growth of 5. % in 2010 and 3. 8% in 2011, with exports – particularly to the United States – leading the way. The administration continues to face many economic challenges, including improving the public education system, upgrading infrastructure, modernizing labor laws, and fostering private investment in the energy sector. CALDERON has stated that his top economic priorities remain reducing poverty and creating jobs. GDP (purchasing power parity) $1. 657 trillion (2011 est. ) $1. 596 trillion (2010 est. ) $1. 514 trillion (2009 est. ) note: data are in 2011 US dollars GDP (official exchange rate) $1. 185 trillion (2011 est. ) GDP – real growth rate . 8% (2011 est. ) 5. 4% (2010 est. ) -6. 2% (2009 est. ) GDP – per capita (PPP) $15,100 (2011 est. ) $14,400 (2010) $13,600 (2009) note: data are in 2011 US dollars GDP – composition by sector agriculture: 3. 8% industry: 34. 2% services: 62% (2011 est. ) Population below poverty line 18. 2% note: based on food-based definition of poverty; asset based poverty amounted to more than 47% (2008) Labor force 49. 17 million (2011 est. ) Labor force – by occupation agriculture: 13. 7% industry: 23. 4% services: 62. 9% (2005) Unemployment rate 5. 2% (2011 est. ) 5. 4% (2010 est. ) note: underemployment may be as high as 25%

Unemployment, youth ages 15-24 total: 10% male: 9. 7% female: 10. 6% (2009) Household income or consumption by percentage share lowest 10%: 1. 5% highest 10%: 41. 4% (2008) Distribution of family income – Gini index 51. 7 (2008) 53. 1 (1998) Public debt 37. 5% of GDP (2011 est. ) 36. 9% of GDP (2010 est. ) Inflation rate (consumer prices) 3. 5% (2011 est. ) 4. 2% (2010 est. ) Central bank discount rate NA% (31 December 2010 est. ) 4. 5% (31 December 2009 est. ) Commercial bank prime lending rate 5% (31 December 2011 est. ) 5. 287% (31 December 2010 est. ) Stock of domestic credit $407. 4 billion (31 December 2011 est. $374. 2 billion (31 December 2010 est. ) Market value of publicly traded shares $454. 3 billion (31 December 2010) $340. 6 billion (31 December 2009) $232. 6 billion (31 December 2008) Agriculture – products corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products Industries food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism Industrial production growth rate 3. 9% (2011 est. ) Current Account Balance -$11. 27 billion (2011 est. ) -$5. 724 billion (2010 est. ) Exports $336. billion (2011 est. ) $298. 5 billion (2010 est. ) Exports – commodities manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton Exports – partners US 73. 5%, Canada 7. 5% (2009 est. ) Imports $341. 9 billion (2011 est. ) $301. 5 billion (2010 est. ) Imports – commodities metalworking machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft parts Imports – partners US 60. 6%, China 6. 6%, South Korea 5. 2% (2009 est. ) Reserves of foreign exchange and gold $142 billion (31 December 2011 est. ) 114 billion (31 December 2010 est. ) Debt – external $204 billion (31 December 2011 est. ) $195. 6 billion (31 December 2010 est. ) Stock of direct foreign investment – at home $321. 5 billion (31 December 2011 est. ) $326. 1 billion (31 December 2010 est. ) Stock of direct foreign investment – abroad $84. 92 billion (31 December 2011 est. ) $78. 38 billion (31 December 2010 est. ) Exchange rates Mexican pesos (MXN) per US dollar – 12. 39 (2011 est. ) 12. 636 (2010 est. ) 13. 514 (2009) 11. 016 (2008) 10. 8 (2007) Fiscal year calendar year Indonesia Economy – overview: Indonesia, a vast polyglot nation, grew an estimated 6. % and 6. 4% in 2010 and 2011, respectively. The government made economic advances under the first administration of President YUDHOYONO (2004-09), introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in 2009. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, a small current ccount surplus, a fiscal deficit below 2%, and historically low rates of inflation. Fitch and Moody’s upgraded Indonesia’s credit rating to investment grade in December 2011. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2012 faces the ongoing challenge of improving Indonesia’s insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of rising oil prices.

GDP (purchasing power parity) $1. 121 trillion (2011 est. ) $1. 054 trillion (2010 est. ) $993 billion (2009 est. ) note: data are in 2011 US dollars GDP (official exchange rate) $834. 3 billion (2011 est. ) GDP – real growth rate 6. 4% (2011 est. ) 6. 1% (2010 est. ) 4. 6% (2009 est. ) GDP – per capita (PPP) $4,700 (2011 est. ) $4,400 (2010 est. ) $4,300 (2009 est. ) note: data are in 2011 US dollars GDP – composition by sector agriculture: 14. 7% industry: 47. 2% services: 38. 1% (2011 est. ) Population below poverty line 13. 33% (2010) Labor force 117. 4 million (2011 est. )

Labor force – by occupation agriculture: 38. 3% industry: 12. 8% services: 48. 9% (2010 est. ) Unemployment rate 6. 6% (2011 est. ) 7. 9% (2010 est. ) Unemployment, youth ages 15-24 total: 22. 2% male: 21. 6% female: 23% (2009) Household income or consumption by percentage share lowest 10%: 3. 3% highest 10%: 29. 9% (2009) Distribution of family income – Gini index 36. 8 (2009) 39. 4 (2005) Public debt 24. 5% of GDP (2011 est. ) 25. 7% of GDP (2010 est. ) Inflation rate (consumer prices) 5. 7% (2011 est. ) 5. 1% (2010 est. ) Central bank discount rate 6. 37% (31 December 2010) 6. 46% (31 December 2009) ote: this figure represents the 3-month SBI rate; the Bank of Indonesia has not employed the one-month SBI since September 2010 Commercial bank prime lending rate 12. 2% (31 December 2011 est. ) 13. 252% (31 December 2010 est. ) note: these figures represent the average annualized rate on working capital loans Stock of domestic credit $305. 2 billion (31 December 2011 est. ) $254. 1 billion (31 December 2010 est. ) Market value of publicly traded shares $360. 4 billion (31 December 2010) $178. 2 billion (31 December 2009) $98. 76 billion (31 December 2008) Agriculture – products ice, cassava (manioc), peanuts, rubber, cocoa, coffee, palm oil, copra; poultry, beef, pork, eggs Industries petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food, tourism Industrial production growth rate 4. 1% (2011 est. ) Current Account Balance $5. 704 billion (2011 est. ) $5. 654 billion (2010 est. ) Exports $208. 9 billion (2011 est. ) $158. 1 billion (2010 est. ) Exports – commodities oil and gas, electrical appliances, plywood, textiles, rubber Exports – partners Japan 16. 3%, China 10%, US 9. 1%, Singapore 8. 7%, South Korea 8%, India 6. %, Malaysia 5. 9% (2009) Imports $172. 1 billion (2011 est. ) $127. 4 billion (2010 est. ) Imports – commodities machinery and equipment, chemicals, fuels, foodstuffs Imports – partners China 15. 1%, Singapore 14. 9%, Japan 12. 5%, US 6. 9%, Malaysia 6. 4%, South Korea 5. 7%, Thailand 5. 5% (2009) Reserves of foreign exchange and gold $136. 2 billion (31 December 2011 est. ) $96. 21 billion (31 December 2010 est. ) Debt – external $158. 8 billion (31 December 2011 est. ) $196. 1 billion (31 December 2010 est. ) Stock of direct foreign investment – at home $105. 7 billion (31 December 2011 est. ) $86. 5 billion (31 December 2010 est. ) Stock of direct foreign investment – abroad $41. 89 billion (31 December 2011 est. ) $32. 85 billion (31 December 2010 est. ) Exchange rates Indonesian rupiah (IDR) per US dollar – 8,696. 1 (2011 est. ) 9,090. 43 (2010 est. ) 10,389. 9 (2009) 9,698. 9 (2008) 9,143 (2007) Fiscal year calendar year South Korea Economy – overview South Korea over the past four decades has demonstrated incredible growth and global integration to become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in the poorer countries of Africa and Asia.

In 2004, South Korea joined the trillion dollar club of world economies, and currently is among the world’s 20 largest economies. Initially, a system of close government and business ties, including directed credit and import restrictions, made this success possible. The government promoted the import of raw materials and technology at the expense of consumer goods, and encouraged savings and investment over consumption. The Asian financial crisis of 1997-98 exposed longstanding weaknesses in South Korea”s development model including high debt/equity ratios and massive short-term foreign borrowing.

GDP plunged by 6. 9% in 1998, and then recovered by 9% in 1999-2000. Korea adopted numerous economic reforms following the crisis, including greater openness to foreign investment and imports. Growth moderated to about 4% annually between 2003 and 2007. With the global economic downturn in late 2008, South Korean GDP growth slowed to 0. 3% in 2009. In the third quarter of 2009, the economy began to recover, in large part due to export growth, low interest rates, and an expansionary fiscal policy, and growth was 3. 6% in 2011. In 2011, the

US-South Korea Free Trade Agreement was ratified by both governments and is projected to go into effect in early 2012. The South Korean economy”s long term challenges include a rapidly aging population, inflexible labor market, and heavy reliance on exports – which comprise half of GDP. GDP (purchasing power parity) $1. 549 trillion (2011 est. ) $1. 495 trillion (2010 est. ) $1. 409 trillion (2009 est. ) note: data are in 2011 US dollars GDP (official exchange rate) $1. 164 trillion (2011 est. ) GDP – real growth rate 3. 6% (2011 est. ) 6. 2% (2010 est. ) 0. 3% (2009 est. ) GDP – per capita (PPP) 31,700 (2011 est. ) $30,600 (2010 est. ) $28,900 (2009 est. ) note: data are in 2011 US dollars GDP – composition by sector agriculture: 2. 6% industry: 39. 2% services: 58. 2% (2008 est. ) Population below poverty line 15% (2006 est. ) Labor force 25. 1 million (2011 est. ) Labor force – by occupation agriculture: 6. 4% industry: 24. 2% services: 69. 4% (2011 est. ) Unemployment rate 3. 4% (2011 est. ) 3. 7% (2010 est. ) Unemployment, youth ages 15-24 total: 9. 8% male: 11. 9% female: 8. 5% (2009) Household income or consumption by percentage share lowest 10%: 2. 7% highest 10%: 24. 2% (2007)

Distribution of family income – Gini index 31 (2010) 35. 8 (2000) Public debt 33. 3% of GDP (2011 est. ) 35. 1% of GDP (2010 est. ) Inflation rate (consumer prices) 4% (2011 est. ) 3% (2010 est. ) Central bank discount rate 1. 5% (31 December 2011) 1. 25% (31 December 2009) Commercial bank prime lending rate 5. 9% (31 December 2011 est. ) 5. 508% (31 December 2010 est. ) Stock of domestic credit $1. 356 trillion (31 December 2011 est. ) $1. 275 trillion (31 December 2010 est. ) Market value of publicly traded shares $996. 7 billion (31 December 2011) $1. 093 trillion (31 December 2010) $836. billion (31 December 2009) Agriculture – products rice, root crops, barley, vegetables, fruit; cattle, pigs, chickens, milk, eggs; fish Industries electronics, telecommunications, automobile production, chemicals, shipbuilding, steel Industrial production growth rate 3. 8% (2011 est. ) Current Account Balance $29. 79 billion (2011 est. ) $28. 21 billion (2010 est. ) Exports $556. 5 billion (2011 est. ) $466. 4 billion (2010 est. ) Exports – commodities semiconductors, wireless telecommunications equipment, motor vehicles, computers, steel, ships, petrochemicals Exports – partners China 24. %, US 10. 1%, Japan 7. 1% (2009 est. ) Imports $524. 4 billion (2011 est. ) $425. 2 billion (2010 est. ) Imports – commodities machinery, electronics and electronic equipment, oil, steel, transport equipment, organic chemicals, plastics Imports – partners China 16. 5%, Japan 13%, US 8. 5%, Saudi Arabia 7. 1%, Australia 5% (2009 est. ) Reserves of foreign exchange and gold $306. 4 billion (31 December 2011 est. ) $291. 6 billion (31 December 2010 est. ) Debt – external $397. 3 billion (31 December 2011 est. ) $359. 4 billion (31 December 2010 est. ) Stock of direct foreign investment – at home 130. 3 billion (31 December 2011 est. ) $127 billion (31 December 2010 est. ) Stock of direct foreign investment – abroad $190. 4 billion (31 December 2011) $164. 8 billion (31 December 2009) Exchange rate South Korean won (KRW) per US dollar – 1,107. 3 (2011 est. ) 1,156. 06 (2010 est. ) 1,276. 93 (2009) 1,101. 7 (2008) 929. 2 (2007) Fiscal year calendar year Turkey Economy – overview Turkey’s largely free-market economy is increasingly driven by its industry and service sectors, although its traditional agriculture sector still accounts for about 25% of employment.

An aggressive privatization program has reduced state involvement in basic industry, banking, transport, and communication, and an emerging cadre of middle-class entrepreneurs is adding dynamism to the economy and expanding production beyond the traditional textiles and clothing sectors. The automotive, construction, and electronics industries, are rising in importance and have surpassed textiles within Turkey’s export mix. Oil began to flow through the Baku-Tbilisi-Ceyhan pipeline in May 2006, marking a major milestone that will bring up to 1 million barrels per day from the Caspian to market.

Several gas pipelines projects also are moving forward to help transport Central Asian gas to Europe through Turkey, which over the long term will help address Turkey’s dependence on imported oil and gas to meet 97% of its energy needs. After Turkey experienced a severe financial crisis in 2001, Ankara adopted financial and fiscal reforms as part of an IMF program. The reforms strengthened the country’s economic fundamentals and ushered in an era of strong growth – averaging more than 6% annually until 2008.

Global economic conditions and tighter fiscal policy caused GDP to contract in 2009, but Turkey’s well-regulated financial markets and banking system helped the country weather the global financial crisis and GDP rebounded strongly to 8. 2% in 2010, as exports returned to normal levels following the recession. Turkey’s public sector debt to GDP ratio has fallen to roughly 40%. Continued strong growth has pushed inflation to the 8% level, however, and worsened an already high current account deficit. Turkey remains dependent on often volatile, short-term investment to finance its large trade deficit.

The stock value of FDI stood at $99 billion at year-end 2011. Inflows have slowed considerably in light of continuing economic turmoil in Europe, the source of much of Turkey’s FDI. Further economic and judicial reforms and prospective EU membership are expected to boost Turkey’s attractiveness to foreign investors. However, Turkey’s relatively high current account deficit, uncertainty related to monetary policy-making, and political turmoil within Turkey’s neighborhood leave the economy vulnerable to destabilizing shifts in investor confidence.

GDP (purchasing power parity) $1. 026 trillion (2011 est. ) $981. 2 billion (2010 est. ) $906. 9 billion (2009 est. ) note: data are in 2011 US dollars GDP (official exchange rate) $763. 1 billion (2011 est. ) GDP – real growth rate 4. 6% (2011 est. ) 8. 2% (2010 est. ) -4. 7% (2009 est. ) GDP – per capita (PPP) $14,600 (2011 est. ) $13,800 (2010 est. ) $12,900 (2009 est. ) note: data are in 2011 US dollars GDP – composition by sector agriculture: 9. 3% industry: 28. 1% services: 62. 6% (2011 est. ) Population below poverty line 16. 9% (2010) Labor force 27. 3 million note: about 1. 2 million Turks work abroad (2011 est. ) Labor force – by occupation agriculture: 25. 5% industry: 26. 2% services: 48. 4% (2010) Unemployment rate 9. 8% (2011 est. ) 12% (2010 est. ) note: underemployment amounted to 4% in 2008 Unemployment, youth ages 15-24 total: 25. 3% male: 25. 4% female: 25. 1% (2009) Household income or consumption by percentage share lowest 10%: 2. 1% highest 10%: 30. 3% (2008) Distribution of family income – Gini index 40. 2 (2010) 43. 6 (2003) Public debt 42. 4% of GDP (2011 est. ) 43% of GDP (2010 est. ) ote: data cover central government debt, and excludes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment. Debt instruments for the social funds are sold at public auctions. Inflation rate (consumer prices) 7. 8% (2011 est. ) 8. 6% (2010 est. ) Central bank discount rate 5. 25% (31 December 2011) 15% (22 December 2009)

Commercial bank prime lending rate 16% (31 December 2011 est. ) 19% (31 December 2010 est. ) Stock of domestic credit $573. 8 billion (31 December 2011 est. ) $496 billion (31 December 2010 est. ) Market value of publicly traded shares $306. 7 billion (31 December 2010) $225. 7 billion (31 December 2009) $117. 9 billion (31 December 2008) Agriculture – products tobacco, cotton, grain, olives, sugar beets, hazelnuts, pulses, citrus; livestock Industries textiles, food processing, autos, electronics, mining (coal, chromate, copper, boron), steel, petroleum, construction, lumber, paper Industrial production growth rate 9. 2% (2011 est. Current Account Balance -$71. 94 billion (2011 est. ) -$47. 74 billion (2010 est. ) Exports $133 billion (2011 est. ) $120. 9 billion (2010 est. ) Exports – commodities apparel, foodstuffs, textiles, metal manufactures, transport equipment Exports – partners Germany 10. 1%, UK 6. 4%, Italy 5. 7%, France 5. 3%, Iraq 5. 3%, Russia 4. 1% (2009 est. ) Imports $212. 2 billion (2011 est. ) $177. 3 billion (2010 est. ) Imports – commodities machinery, chemicals, semi-finished goods, fuels, transport equipment Imports – partners Russia 11. 6%, Germany 9. 5%, China 9. 3%, US 6. 6%, Italy 5. 5%, France 4. 4%, Iran 4. 1% (2009 est. )

Reserves of foreign exchange and gold $96. 05 billion (31 December 2011 est. ) $86. 08 billion (31 December 2010 est. ) Debt – external $313. 6 billion (31 December 2011 est. ) $290. 7 billion (31 December 2010 est. ) Stock of direct foreign investment – at home $98. 98 billion (31 December 2011 est. ) $86. 98 billion (31 December 2010 est. ) Stock of direct foreign investment – abroad $18. 63 billion (31 December 2011 est. ) $16. 88 billion (31 December 2010 est. ) Exchange rates Turkish liras (TRY) per US dollar – 1. 668 (2011 est. ) 1. 5028 (2010 est. ) 1. 55 (2009) 1. 3179 (2008) 1. 319 (2007) Fiscal year calendar year

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