Today, Russian President Dmitry Medvedev published a glowing op-ed in the Russian business daily Vedomosti about the upcoming second annual BRIC summit.
Called “Common Goals, Common Actions,” the piece talks about all the wonderful things the BRIC countries are doing to move the world forward and all the things they have already done, including active participation in the UN and G20, agricultural cooperation, promoting energy efficiency, trading in each other’s currencies, and, of course, conquering space.
All well and good, of course, provided the piece didn’t sound like a justification for BRIC’s existence.
Or, let me be more clear: Medvedev was arguing that not only was BRIC a necessary conglomeration, but that Russia deserved to be included — which is far from certain these days. Back in October, economist Nouriel Roubini argued quite forcefully that it didn’t. At a Moscow economic forum in February, a panel on the future of the BRIC countries was nearly unanimous on this point. “Russia doesn’t quite fit with other countries in terms of growth,” said one of the panelists, reminding the audience that the BRIC countries are supposed to have “dynamic, fast-growing” markets. “The official estimate,” he added, “is -7.9% GDP growth. How can that be a dynamic fast-growing market?”
Russia, everyone notes, has an unsolved demographic — and thus labor — crisis, an economy (and government budget) still entirely dependent on commodity prices, problems with rule of law and corruption, which, even according to the government’s own estimates, eat up as much as one third of the federal budget. All of which punches a massive a hole in your dynamism and fast growth.
Not that the others don’t have problems, but the numbers are telling.
The BRIC summit starting in Brazil next week, Medvedev writes, may be a young group “but from its first steps, it has won much international authority…And this is not surprising,” he adds, since the member countries comprise “26% of the world’s territory, 42% of its population, and 14.6% of the world’s GDP.”
Landmass, fine. Russia’s big, and has always been a size queen. Population? Russia’s is shrinking. 14.6% of the world’s GDP? At a wobbly, shrinking $1.3 trillion, Russia’s is just over 2% of the world economy. And it looks like it’ll stay that way: Economists estimate that, in a few years, China and India combined will make up 45-50% of world GDP, while Russia and Brazil will make up around 4%.
Of course it’s nice for Russia to play friendly and be cooperative, but it shouldn’t overstate its economic influence in the world.