Coface, the international credit insurer, says that after 10 years of frenetic growth, the Brics (Brazil, Russia, India China and South Africa) are slowing down sharply: for 2014, Coface forecasts growth of on average 3.2 points lower than the average growth these countries registered over the previous decade.

At the same time, other emerging countries are accelerating their development. Among them, a “top 10” emerges with good production prospects and sufficient financing to support expansion.

Despite a consumer trend that remains favourable, the Brics are experiencing a growth downturn due to an adjustment in supply and a marked slow-down in investment. Their businesses no longer have sufficient production capacity to meet continued strong demand.

To identify the promising countries that the Brics are now giving way to, Coface identified several criteria, including two that are essential: countries that have high growth which is accelerating, and whose economy is diversified and resilient to growth slowdowns.

There are a number of countries that have sufficient funding capacity to finance growth (a minimum level of savings needed to avoid excessive recourse to foreign savings), without the risk of creating a credit bubble or which do not yet have equity markets of a comparable size of those in Organisation for Economic Co-operation and Development countries.

Coface identifies only 10 “new emerging” countries which meet all the criteria. However, these countries are not the same in terms of their business environments – the weaknesses of which can stifle growth. This leads Coface to distinguish two groups in the “new emerging” countries:

Colombia, Indonesia, Peru, the Philippines and Sri Lanka have a sound business climate (A4 or B), similar to that of the Brics countries today.

Kenya, Tanzania, Zambia, Bangladesh and Ethiopia have very difficult (C) or extremely difficult (D) business environments, which could hamper growth.

“Naturally, it will be more difficult for the second group of countries, who could take longer to fully realise their growth potential. However, their business environment problems are relative: in 2001, the quality of governance in Brazil, China, India and Russia was comparable to that of Kenya, Tanzania, Zambia, Bangladesh and Ethiopia today,” said Julien Marcilly, the head of country risk at Coface.

Growth of the “new emerging” countries will take a different path than for the Brics. Some weaknesses compared with the Brics persist nonetheless.

Firstly, the 10 identified “new emerging” countries currently only represent 11 percent of the world’s population while the Brics accounted for 43 percent of the population in 2001. Secondly, their gross domestic product (GDP) level is only 70 percent of that of the Brics in 2001.

Finally, the Brics recorded on average a current account surplus while the “new emerging” countries run a deficit of about 6 percent of GDP. “With growth in developed countries being structurally weaker today, the ‘new emerging’ countries may benefit less from trade towards these countries than did the Brics in the 2000s.”

Coface is a credit insurance subsidiary of Natixis, an arm of France’s Groupe BPCE.