Thursday, May 14, 2009

BrIC, not BRIC

An acronym thrown around recently:

BRIC countries are supposedly fast growing emerging economies that are somewhat independent of US driven demand and supposedly are going to become the dominant four economies by 2050:


Russia does not belong in this group.
Its economy is extraordinarily hydrocarbon and metals export dependent, in fact, such a huge proportion of the economy is natural resource driven that even the UAE has a more diverse economic base. Its GDP imploded in the recent economic malaise, contracting a staggering 9.5% in q1.

In fact, its economic performance has been so horrific that a recent strategic blueprint released by the Kremlin and signed by President Medvedev listed the current resource export economic structure as a major threat to Russia's future.

Furthermore, its life expectancy is abysmal, its population is on the decline, it has decreasing business transparency, and it has decreasing rule of law.

BrIC, not BRIC. Russia should be categorized with natural resource dependent nations, such as Saudi Arabia and Venezuela, not multi-faceted economies such as Brazil, India, and China.

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