Sick of BRICs? Check Out MENA
While China bubbles up, its BRIC-brother Russia is melting down. Russian GDP contracted a record 10.9% annualized pace in the second quarter, the Russian government announced this morning. The world just doesn’t want oil and natural gas like it used to, and that’s really the only game in Mother Russia.
“We can’t develop like this any longer,” President Dmitry Medvedev said yesterday. “It’s a dead end. And the crisis has placed us in a situation where we will have to make decisions on changing the structure of the economy.”
So if the BRIC nations are giving you pause, check out MENA.
“I’m talking about the Middle East and North Africa, or MENA,” says Chris Mayer.
“In one of my presentations at Vancouver, I focused on the growth in these economies because it touches on nearly everything I’ve been telling my Capital & Crisis readers lately — water and food scarcity issues, infrastructure needs, energy and the growth in non-U.S. trade.
“MENA is one of the fastest-growing regions in the world. Over the last 50 years, MENA’s population is up more than fourfold. And the population is still young, with the majority of the population under 25 years old. Over the next 30 years, MENA’s population will grow more than 60%, to nearly 700 million people. Trade there is expanding just as quickly.
“The most interesting thing about this growth is that it is happening in a part of the world where it is most difficult to grow food. Water is scarce. MENA consumes far more water than it gets via rainfall. In some places, the disparity is dramatic. In Kuwait, for instance, annual water consumption is 22 times annual rainfall. No wonder the whole area is a net importer of food.
“The Middle East is actually the world’s largest regional importer of food. Egypt, for instance, actually imports more wheat than China. The GCC countries — or gulf coast countries — will import 60% of their food by 2010. And it’s likely to get worse. Saudi Arabia aims to phase out wheat production by 2016 to conserve water.
“The key takeaway from all of this is to recognize this other, non-BRIC, growth engine and the needs and opportunities it creates. Once again, we’ll see enormous investment in food and water resources to feed and slake the thirst of all these people. And we’ll need all of the infrastructure and burn all of the hydrocarbons that come with that growth.”