The Third World Is Giving Up On Europe

Tyler Durden's picture

First it was Nigeria cutting back its European exposure, now it is South Africa's turn:


Who is next? Kalahari Bushmen pulling their coke bottles on deposit in Murcia cajas? Mail tribesmen wiring their funds from Zurich to Singapore? Somalian pirates watching the VaR models of their Spanish bond portfolios #Ref! out and give up in sheer disgust?


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GeneMarchbanks's picture

RSA ain't third world. Not even close.


Oh regional Indian's picture

Right you are Gene.

But given what the Euro Core (UK, Portugal, France, Italy, Spain, Belgium, Netherlands) have done to the rest of the world (third my ass)...

More power to the giver-uppers. Give up on Europe. Europe is where it is because of the rape, especially in the last 400 years of Africa, South America, India, China, Japan, Phillipines, Jamaica.... on and friggin on.

Perhaps just detach. Let all the "blocs" figure out their own situations.

Fuck corporate globalism

Fuck Cultural homogenaity.

Fuck big Oil.





bigdumbnugly's picture

so the third world is throwing in the breachcloth too, eh?

MsCreant's picture

They do not want fiat spiderman towels.

Comay Mierda's picture

I hear Draghi called Zimbabwe for some pointers

Byte Me's picture

Not even if made from good Indian cotton?

I'm surprised...

brooklynlou's picture

In a couple of weeks the Spider Man towel will be worth more than the Euro that bought it ...

StychoKiller's picture

"Everyone should KNOW where their towel is..." -- Douglas Adams

Sam Clemons's picture

They are smart enough to throw in the towel, but not smart enough to realize that saying: 


is not profound at all.  In other news, water is wet.  And anything bad in the economy is "unexpected."

Greater Fool's picture

Actually, I'd say it looks remarkably similar. For example, Iceland is getting in position to go "boom" again....


walküre's picture

Fuck Air India. Indefinite strike?

Seriously, what the fuck is going on in India?

smb12321's picture

Regional - But 3rd world nations got to skip the startup steps for most technologies that they took fully developed.  Then again, what good did it do?  WHen Belgium left the Congo (the biggest nation in Africa) there were 35,000 miles of paved roads.  Today there is less than 1,000 so progress or even sustainability is not automatic as many assume. 

Europe is up the proverbial creek not because of its colonial past but due to a failed social system (social welfare) that relies on debt and more workers than retirees.  THe debt is now monstrous and Europeans are rapidly declining in population.  That's why they;re in trouble.

tiger7905's picture

Apparently Bank of Spain governor would love to tell his story...

Temporalist's picture

Gene you take these jokes way too seriously. 

kito's picture ranks in the 120s in the human development index, out of 170 countries or so. id say that is just about third world..................

GeneMarchbanks's picture

Very scientific. Amazing to see how frightened the so called first worlders are in their gulags.

kito's picture

using, lets say, the nordic countries as the standard for first world, perhaps you can enlighten us as to how south africa is on par with these countries, as opposed to, say, india, which is about 10 spots below?



derek_vineyard's picture

cramer was so bearish this morning ....... he capitualtes after the crash.....what gives?

Temporalist's picture

What gives?  Cramer is a complete asshole propagandist tool.  Does that help you understand?

derek_vineyard's picture

and liesman is now on my screen..............haven't seen him in weeks was praying he was fired

how can i explain his title "senior economic analyst" on cnbc to my son?

Temporalist's picture

When he's on air slap your son and say "Never be like him!" and the world will be a better place.

derek_vineyard's picture

the kid just pointed and said 'daddy, that man has special needs'  (but he used the word retarded)--please do not let cps (child protective services) see this post...i like having the kid around

Bastiat's picture

Always get a kick out of it when a friend, who's a Phd child psych, calls someone a "retard."

Chump's picture

This is precisely why I don't think I'll be up for public schooling my son.  I'm pretty sure I'll lose him after I choke some half-wit teacher/counselor/administrator/vice principal.  No thanks, he is my sanity.

walküre's picture

120 out of 170 is not the bottom third.

Isn't that how they define what "third" world is?

First 56 are FIRST world, 57 to 113 are SECOND world and 113 to 170 are THIRD world.

Winston Churchill's picture

Soon to be on a par with Zimbabwe.

See the 'benfaction law' being passed in RSA

rete's picture

It's third world. I've been there numerous times since the 1980's, and RSA is third world. More so now than the 1980's (although I suppose it was hidden from view back then). RSA == Africa.

GeneMarchbanks's picture

What is the 'S' in BRICS?


rete's picture

News flash. The "S" is there because of, shall we say, political correctness. Cannot have a BRIC without Africa, can we. And unfortunately Turkey is not in the right continent. So South Africa it is.

And in that grouping, Brazil is third world. Russia is somewhere inbetween. India is more third world. China is third world, despite the MSM.  Add in South Africa's true unemployment rate of 38% and you have...Third World.

magpie's picture

Never have been comfortable with that nomenclature; it's Cold War stuff, for the Third World "neutrals". Might as well be honest about it and just call them backward or poor.

That being said once everything falls apart, we'll probably go back to the "GDP" measures of the 19th Century, as in steel produced, tonnes of wheat grown or gold mined per capita.

BeetleBailey's picture

It's not South Africa, genius.

It's BRIC (Brazzie, Ruskie, Indi and Chiknee)

The "s" is for plural - NOT for South Afrikaner

What...are you Obama...making shit up as you go?

rete's picture


South Africa's presence 'drags down Brics'

Johannesburg: A year later and South Africa has still not convinced the world or the creator of Brics why it belongs in the exclusive emerging-giant grouping that includes Brazil, Russia, India and China. "It's just wrong. South Africa doesn't belong in Brics," said Jim O'Neill, global chairman of Goldman Sachs Asset Management, who coined the term "Bric" 10 years ago.

In an interview with the Mail & Guardian in London this week, O'Neill was highly critical of South Africa's position in this political bloc.

"South Africa has too small an economy. There are not many similarities with the other four countries in terms of the numbers. In fact, South Africa's inclusion has somewhat weakened the group's power."

He is also bearish about South Africa's growth prospects over the next five years. Gross domestic product (GDP) growth has been revised down from 3.2% to about 2.7% for this year, 3.6% in 2013 and 4.2% in 2014. Comparatively, the rest of Africa is expected to grow on average by about 7% over the short to medium term, according to the International Monetary Fund (IMF). China and India, on the other hand, are expected to power ahead with between 7% and 10% growth.

"South Africa has to stop feeling sorry for itself and be doers instead of talkers," O'Neill said. "When your country first introduced inflation targeting about 15 years ago and I sat with some of the policymakers, I was big on South Africa. I'm not now.  Over the past few years South Africa has lost its focus."

Factionalism in the ruling party and government ministries was also dragging down the country's ability to fix its problems, O'Neill said. 
"The country can't spend the whole time saying 'the world owes us'. There's a sense of entitlement and there's too much focus on the history of the country. Now, factionalism within the ANC and government is destabilising for growth and undermining Brics."

Flawed argument

If the argument is that South Africa's inclusion in Brics is because of its influence on the rest of the continent, it is a flawed one.

"South Africa is already losing out on investment to other rising economic stars on the continent. Countries such as Nigeria carry more power now," he said. "Just look at what is happening in the African Union. South Africa can't claim any more, apart from its sound fiscal and financial systems, to be the superpower on the continent."

Although South African authorities and Brics converts will disagree and vigorously defend South Africa's position in the grouping, the statistics substantiate the investment banker's argument.

Two of the Brics nations are now among the six largest economies in the world. Last year China usurped Japan to become the second-largest economy in the world -- five years earlier than O'Neill had predicted. The Chinese economy now stands  at about $5.9-trillion.

Similarly, three weeks ago Brazil overtook the United Kingdom as the sixth-largest economy -- about 10 years faster than projected. The IMF's figures put Brazil's economy at about $2.52-trillion and the UK's at $2.48-trillion.

India and Russia are just outside the top 10, but O'Neill believes they will probably climb the ladder soon. "As we creep through the decade, their share of the global GDP is set to rise," he said.

Over the past decade the combined value of the Bric countries, excluding South Africa, grew by about $8­-trillion, taking their aggregate GDP to about $11-trillion. The four countries are now more than three-quarters the size of the United States in current dollar terms. O'Neill believes that they could collectively become bigger than the US by 2018. His forecast is that they could eclipse the combined economies of the G7 richest countries by 2050.

Why SA does not cut it

South Africa, on the other hand, is nowhere close to being among the top 20 biggest economies. With a population of just more than 50-million and GDP of $364-billion, it is just too small to be on Goldman Sachs's radar of growth markets. "In fact, South Africa is a drag on the dynamics of the Bric grouping," O'Neill said.

If any country deserved to be in the Brics group, he reckons it should be South Korea, Indonesia, Mexico or Turkey. Of the next 11 most populated emerging economies, these four countries already account for more than 1% of global GDP.

According to O'Neill, at the end of 2011 these four countries, combined with Brazil, Russia, India and China, accounted for about 23% of global GDP. "This is nearly twice the total amount of all other so-called emerging economies, whose share is about 12%. In the decade ahead, it is likely that the combined dollar value of nominal GDP growth in these eight growth markets will rise by close to $16-trillion."

It is more than double that of the US and the eurozone combined. "This is why South Africa shouldn't belong in this grouping. It just doesn't make sense, because it doesn't have any economic clout other than being an access point for the Bric countries," said O'Neill.

He believes South Africa is part of Brics because it suits the Chinese agenda. He might be on to something. President Jacob Zuma admitted last year that, in addition to intense lobbying from the government, the Chinese and Indians had invited South Africa to become part of this bloc.

Political talkshop

"The Chinese, for example, are highly focused on the continent and South Africa is an easy way into the rest of Africa for them," said O'Neill.

In fact, he does not regard the four Bric countries as emerging giants any more, but rather as growth markets because of the size of their economies.  Brics is not a formal economic or trading bloc like the European Union. It is more a political talkshop or club that is trying to build greater clout on the global negotiating stage.

"South Africa's case for legitimacy in this grouping is predicated on its geographic location and advantage on the continent. But, in fact, it has slightly diminished what was a strong political club with the four original countries," he said. "It is not even a member of the N11 [the 'Next 11' emerging economies identified by Goldman Sachs as having promising outlooks]."

This grouping includes Nigeria, which O'Neill believes is the country with the right scale and population size to represent Africa.

Investors still wary of Africa

That said, Nigeria has its own set of problems, such as the recent violent uprisings sparked by a cut in the fuel subsidy. Youth unemployment, political instability, inadequate education and corruption are part of the growing list of concerns. 

Although Africa is a hot topic now, O'Neill is not yet convinced that investors -- or Goldman Sachs funds, for that matter -- should shower the continent with big money just yet. There is no liquidity in the African markets, for one, and investors cannot look at Africa as a single zone until the countries start trading among themselves.

"There is plenty of capital waiting to flow in, but investors are scared and nervous because they associate Africa with disappointment. They are intrigued but scared," he said.  "They want to see political stability, leadership, governance and investment in education. I think it's coming but is still some way off. In Nigeria, for example, there are suggestions that the country might not stay as one, that it could be split into the north and south like Sudan was."

O'Neill has some personal investments in Africa (property in Ghana, for example), but said he would not expose Goldman Sachs clients -- even though former employee Greg Smith claims the investment bank thinks clients are "muppets".

The African consumer

"The story of the African consumer is very big. The rising wealth is very impressive. We manage $800-billion and can raise a lot of money very quickly to pump into Africa, but as a firm we have a fiduciary duty to our clients and have to be careful not to expose them to potentially dangerous situations in Africa."

When O'Neill started at Goldman Sachs about 10 years ago, he wanted to start an African fund. "I have a positive inclination towards Africa. But to have an African fund we need general economic progress independent of the commodities booms and Chinese development.

Commodities can be a mixed curse -- some call it the Dutch disease. The time to invest was three years ago. But there's still time and we're always thinking about it."

But first, he said, policymakers need to concentrate on four things if they want capital to pour in: stability of government, weeding out corruption, the rule of law and education. "That applies to South Africa too."

Byte Me's picture

So the BRIC nations are applying for towels from SA?


LFMayor's picture

It's a BRIC
(cow shit) HAAAWWWWzS

check out that topless Ik chick
She's letting it all hang out

Shake it down shake it down now
shake it down shake it down now

GeneMarchbanks's picture

I guess you can find any old GS garbage and pretend it's gold, huh?

Between the GS agenda and the Chinese agenda, I'll go with the savers.

Cute article though.

rete's picture

Similarly, just because some guy on the internet says the RSA is not one doesn't mean it is not a lower middle-income developing country which is developmentally on par with Botswana and Namibia. Which South Africa is...

Uncle Remus's picture


if they want capital to pour in: stability of government, weeding out corruption, the rule of law and education.

The US is about to fall of THAT list.

BeetleBailey's picture

I stand corrected. I apologize.

I do find it odd that SA was included however.

Incubus's picture

Hey guyz, I'm in yer globalism, shitting BRICS

PeterLemonJello's picture

Even the South African's I work with say it's 3rd world...except they have great food and agriculture.

hedgeless_horseman's picture



Had great agriculture.  Like Rhodesia, 'twas Africa's breadbasket, and now just basket case.

SA ag production in quantitiy (not nominal value) is down, and has been since the blacks took over.

l1b3rty's picture

World in worse situation than before crisis? Hmm, thus world in worse situation ever, right up there with the heat of World War 1, with the rumbling of Europe of World War II and the worst nightmares of a Cold War Kid.


And we are watching from our rooms inside our rooms. Hope everything is okay out there!

Real Money Vigilance