Via Quartz, an interesting article on frontier markets:

Despite being incredibly young, South Sudan’s position in a planned oil pipeline makes it a promising investment.

As Jim O’Neill steps down as head of Goldman Sachs Asset Management, the world may be looking for a new acronym to succeed his infamous coinage of BRICS, which stands for Brazil, Russia, India, China, and South Africa. Many have tried to fashion their own emerging market groupings. Adding or dropping various combinations including Vietnam, Indonesia, Turkey, or Argentina yields novelties such as VISTA or CIVETS. None have had the traction of BRICS, however, which has even become a regular diplomatic gathering that has mooted a joint development bank, investment fund, and currency swap agreements.

The trouble with all these formulations, however, is that they are founded on the simple arithmetic of population size factored with current economic growth, extrapolated far into the future. But we don’t have to wait until 2040 to see that India punches far below its weight and may never reach its forecasted BRICS potential, or to speculate that by 2040, it is just as likely that Russia will be a drastically shrunken eastern European country, while its rich Siberian natural resources are harvested by and for China. Brazil’s current street revolution reminds us that while the country is no doubt an economic powerhouse, it is also one of the world’s most unequal and stratified societies.

This is a reminder that we must look not just at growth but also at composition. In Goldman Sachs’ follow-up to the BRICS—the “Next-11” grouping—published in 2010, Nigeria, Egypt, Iran, and Pakistan made the list. Again, large populations, impressive growth rates. But within a decade Nigeria could be split in two due to ethnic unrest, Pakistan continues to disintegrate, and Egypt has became an ungoverned political morass. Will these states really recover to keep decades’ ahead forecasts on track, or will some of these over-populated post-colonial giants (particularly Nigeria and Pakistan) gradually fall apart? One can make money there today, but that does not make them safe bets.

Furthermore, simplified economic logic makes no place for geopolitical complexity, which requires understanding history and considering international variables. This complexity emerges best from scenarios rather than projections. For example, World War III is more than likely to involve some combination of three of the five BRICS: India versus China and/or China versus Russia. Surely that would disrupt the 2040 projections.

Keeping the acronym fad alive, the newest frontier market clique to emerge is the 3Ms: Mongolia, Myanmar and Mozambique—mineral-rich countries that border the BRICS. They are projected to be the fastest growing countries of the next decade and can share best practices in managing resource wealth. A summit among the three is anticipated for this year.

In any event, once the investment banks have had their run with clustering disparate emerging markets, there may be just a handful left for investors to sweep up, so let’s call them the BROOMS:

Belize. Good enough for Silicon Valley millionaire-turned fugitive, John McAfee to flee to,  Belize (and Central America) may finally earn attention beyond last century’s moniker as “Banana Republics.” If NAFTA becomes a North American Union and the Pan-American Highway becomes a serious bridge across the hemisphere, Belize’s pristine beaches would make it a well-positioned visa-free, tax haven.

La Reunion. Not an independent country yet, you might say, but surely Francois Hollande will have to sell off the tiny French protectorate near Mauritius in the western Indian Ocean to finance his ailing economy. If privatized, it could become a pioneering offshore hub; perhaps Peter Thiel will buy it for his SeaSteading project. (By the way, Rwanda would have been too easy a candidate, with a president, Paul Kagame, who fancies himself an African Lee Kuan Yew and investment already pouring in.)

Oman. Largely free of the Arab Spring’s troubles, even when it runs out of oil and gas, Oman will still lead the world in precious Basra pearls, and unspoiled beaches from which to go diving for them. And once Iran re-opens to world (within five years is my bet), there will be no better staging ground for long-term operations in the world’s biggest remaining untapped market.

Outer Mongolia. Sadly, there is only one country in the world beginning with “O,” so we have to be creative. The Ming dynasty understood Outer Mongolia as encompassing present day Mongolia as well as part of Russia. Today, it can be thought of as China’s peripheral yet mineral-rich zone to which millions are being relocated to build new cities and from which iron ore and other commodities are being trucked into China’s growing interior.

Mauritania. Never mind the string of recent coups and bordering terrorist haven Mali, the former Roman province and French colony is rich in iron ore, copper, gold, and has just discovered multiple oil deposits. Mauritania is too poor to undertake expensive extraction in its harsh interior regions but surely China will come lift its fortunes. Better still, Europe could ramp up its economic assistance to generate some more hard currency through joint ventures in resources and fisheries.

South Sudan. Landlocked countries still facing threats from former masters usually don’t make for good investment candidates, but a planned oil pipeline across Kenya to the Indian Ocean (Lamu-Port-South-Sudan-Ethiopia—LAPSSET) and a master plan for a new capital city may give a boost to this destitute agrarian society. It also has a sympathy vote as the world’s newest country.

Whatever the potential of these lowest rungs on the investor radar, they of course lack the scale of the United States, which Antoine von Agtmael recently dubbed the world’s hot new “emerging market.” He ought to know, since he coined the term.

Irrespective of which country we evaluate, moving forward investors will need to be more savvy about the many varieties of emerging markets, looking beyond superficial indicators of size and growth towards much more fundamental indicators related to fiscal health, political stability, infrastructure spending, and productivity. Whether we call the next set of emerging markets “growth markets,” “frontier markets,” or something else, we must always remember that understanding the alchemy of national potential requires more than an alphabetic atlas.