Emerging and growth-leading economies

Emerging and growth-leading economies (EAGLEs) are a grouping of key emerging markets developed by BBVA Research. The EAGLE economies are expected to lead global growth in the next 10 years, and to provide important opportunities for investors.

EAGLEs

EAGLEs and Nest methodology

EAGLEs is a grouping acronym created in late 2010 by BBVA Research to identify all emerging economies, whose contribution to world economic growth in the next ten years is expected to be larger than the average of the G6 economies (G7 excluding the U.S.). This is a dynamic concept where country members can change over time according to their forecasted performance relative to developed economies. The membership of the EAGLEs is subjected to a yearly revision and can change according to their forecasted economic performances relative to developed economies.

Current EAGLEs membership
EAGLEs members	2011^[1]	2012^[2]	2013^[3]	2014^[4]	2015^[5]	2016^[6]
Bangladesh					.	.
Brazil	.	.	.	.	.	.
China	.	.	.	.	.	.
Egypt	.					.
India	.	.	.	.	.	.
Indonesia	.	.	.	.	.	.
Iran						.
Malaysia						.
Mexico	.	.	.	.	.	.
Nigeria					.	.
Pakistan					.	.
Philippines					.	.
Russia	.	.	.	.	.	.
Turkey	.	.	.	.	.	.
Vietnam						.

Former EAGLEs membership
EAGLEs members	2011^[1]	2012^[2]	2013^[3]	2014^[4]	2015^[5]
Iraq					.
South Korea	.	.	.	.
Saudi Arabia					.
Taiwan	.	.	.	.
Thailand					.

Other economic concepts

As world economic growth rotates from developed to developing countries, there has been increasing interest in identifying emerging markets that will become global leaders, as well as increasing the lobbying of some countries to be included in the BRIC definition. However, many economists have argued that the BRIC concept (Brazil, Russia, India and China) is outdated and have proposed alternative definitions. The EAGLEs concept is similar to other proposals in going beyond BRICs (such as the CIVETS, Next 11 or 7 percent club) but its methodology differs from others’ in several ways:

It gives less relevance to economic size and population, which may be misleading.
It focuses on the Incremental GDP (IGDP) economies will generate, instead of paying attention to the current or expected size of their GDP. This creates a situation where having big size or a high growth rate is not enough on its own to be a key global player. It is a combination of both that really matters.
The cut-off is explicit. In order to become an EAGLE member, each country’s expected Incremental GDP in the next 10 years needs to be greater than the one anticipated for the average of the G6 economies, G7 excluding the U.S.
It is not a closed group and the concept is not linked to an acronym formed by a given set of countries.
The results are based on a shorter horizon – 10 years – than the ones considered in other cases, ranging from 20 to 50 years.

EAGLEs and other economic concepts

Over the years there have been several attempts to try to implement the economic concept that will best reflect the potential of emerging markets in the coming years. After BRIC concept was coined by Goldman Sachs in 2001, there were other endeavors to find the best grouping acronym such as: CIVETS, Next Eleven, 7 per cent club and the EAGLEs.

In January 2011, Goldman Sachs decided to re-define its current definition of Emerging Markets and proposed a new term “Growth Markets”. The separation of Growth Markets from Emerging Markets is aimed to show the world’s most dynamic economies – those that are at least contributing 1 per cent to global growth (outside of the Developed World). In the first approach, eight economies have been identified and they were: BRIC economies plus Mexico, South Korea, Turkey and Indonesia. This particular shift in terminology was initially proposed by BBVA Research (later followed by Goldman Sachs) with the aim of switching from the existing static concept to something more dynamic, that could better indicate market potential.

Nest

As part of the EAGLEs proposal, the EAGLEs’ Nest is a second set of countries with expected Incremental GDP in the next decade to be lower than the average of the G6 economies (G7 excluding the U.S.) but higher than Italy’s (G6 Minimum), the country which is anticipated to contribute least to global growth within the G7. The membership of the EAGLEs’ Nest is subject to a yearly revision and can change according to forecasted economic performances.

Current EAGLEs’ Nest membership
Nest members	2011^[1]	2012^[2]	2013^[3]	2014^[4]	2015^[5]	2016^[6]
Algeria					.	.
Argentina	.	.	.	.	.	.
Chile		.	.	.	.	.
Colombia	.	.	.	.	.	.
Ethiopia						.
Iraq					.	.
Kazakhstan				.	.	.
Libya						.
Morocco						.
Mozambique						.
Myanmar					.	.
Peru	.	.	.	.	.	.
Poland	.	.	.	.	.	.
Romania						.
Saudi Arabia				.		.
South Africa	.	.	.	.	.	.
Sri Lanka					.	.
Thailand	.	.	.	.		.
United Arab Emirates					.	.
Uzbekistan						.

Former EAGLEs’ Nest membership
Nest members	2011^[1]	2012^[2]	2013^[3]	2014^[4]	2015^[5]
Bangladesh	.	.	.	.
Egypt		.	.	.	.
Iran				.	.
Malaysia	.	.	.	.	.
Nigeria	.	.	.	.
Pakistan	.	.	.	.
Philippines	.	.	.	.
Qatar				.	.
Ukraine		.
Vietnam	.	.	.	.	.

Three countries which would otherwise have met the criterion for the Nest were excluded: Iraq and Saudi Arabia because BBVA classifies them as frontier, not emerging markets; Iran was excluded due to sanctions and thus not a suitable target for investors. Iran would have been an EAGLE in 2012 and a nest in 2011 and 2013, Iraq and Saudi Arabia only qualified for the Nest.^[3]

Indexes

On September 9, 2011, Dow Jones and BBVA launched two equity indexes that allow investing in leading companies traded in Emerging and Growth-Leading Economies (EAGLEs). There are two indexes, “Dow Jones BBVA EAGLEs^[7]” and “Dow Jones BBVA EAGLEs Optimized^[8]”, both composed of a set of 50 companies.

The allocation by country is macro driven according to the contribution each EAGLE is going to make to incremental GDP within the group, in the next ten years. It is a dynamic index which changes its composition along with macro forecasts; hence it is an adaptive index when compared with other static peers. Revisions are made annually in March to update the indices compositions according to the latest macroeconomic forecasts. It is also a liquid index which provides a diversified exposure to Emerging Markets. In order to facilitate index replication by foreign investment firms, the sample of 50 companies is chosen from the Dow Jones Global Total Stock Market Index, plus HK and US listed Chinese companies.

References

1 2 3 4 Who are the EAGLEs? Driving Global Growth for the Next Ten Years (14 February 2011)
1 2 3 4 EAGLEs_Outlook_Annual_Report_2012 (20 February 2012)
1 2 3 4 5 EAGLES Economic Outlook. Annual Report 2013 (11 March 2013)
1 2 3 4 EAGLES Economic Outlook. Annual Report 2014 (29 March 2014)
1 2 3 4 EAGLES Economic Outlook. Annual Report 2015 (13 April 2015)
1 2 3 4 EAGLES Economic Outlook. Annual Report 2016 (May 2016)
↑ Dow Jones BBVA EAGLEs Index Methodology
↑ Dow Jones BBVA EAGLEs Optimized Index

External links

Power in international relations

Types	Economic Energy Food Hard National Power politics Realpolitik Smart Soft
Status	Emerging Small Middle Regional Great Super Hyper
Geopolitics	American Asian British Chinese Indian Pacific
History	List of ancient great powers List of medieval great powers List of modern great powers International relations of the Great Powers (1814–1919)
Theory	Balance of power European Center of power Hegemonic stability theory Philosophy of power Polarity Power projection Power transition theory Second Superpower Sphere of influence Superpower collapse Superpower disengagement
Studies	Composite Index of National Capability Comprehensive National Power

Organizations and groups by region or regions affected

Africa	African Union Union for the Mediterranean
Africa–Asia	Arab League Cooperation Council for the Arab States of the Gulf (GCC) Organization of Islamic Cooperation (OIC)
Americas	Mercosur North Atlantic Treaty Organization (NATO) Organization of American States (OAS) Union of South American Nations (Unasur)
Asia	Asia Cooperation Dialogue (ACD) Asia-Pacific Economic Cooperation (APEC) Association of Southeast Asian Nations (ASEAN) China–Japan–South Korea trilateral summits Economic Cooperation Organization (ECO) South Asian Association for Regional Cooperation (SAARC) Shanghai Cooperation Organisation (SCO)
Europe	Council of Europe (CE) European Union (EU) Nordic Council Visegrád Group
Eurasia	Commonwealth of Independent States (CIS) Collective Security Treaty Organization (CSTO) Economic Cooperation Organization (ECO) Eurasian Economic Union (EaEU) Turkic Council
North America–Europe	North Atlantic Treaty Organization (NATO) Arctic Council
Africa–Asia–Europe	Union for the Mediterranean
Africa–South America	South Atlantic Peace and Cooperation Zone
Oceania-Pacific	Australia–New Zealand–United States Security Treaty (ANZUS) Asia-Pacific Economic Cooperation (APEC) Melanesian Spearhead Group (MSG) Pacific Islands Forum (PIF) Polynesian Leaders Group (PLG)
Non-regional	Brazil–Russia–India–China–South Africa (BRICS) Commonwealth of Nations Francophonie Colombia–Indonesia–Vietnam–Egypt–Turkey–South Africa (CIVETS) E7 E9 G4 G7 G8 G8+5 G20 G24 G77 India–Brazil–South Africa Dialogue Forum (IBSA) Mexico–Indonesia–Nigeria–Turkey (MINT) Next Eleven (N-11) Non-Aligned Movement (NAM) Organization for Economic Co-operation and Development (OECD) Uniting for Consensus
Global	United Nations (UN)

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