Like China, Russia will be one of the BRIC economies that will stand the test of time in the alliance. Why? Like China, Russia is an old Communist regime that has impeccably mastered the art of capitalism in making its economy a success. Under the stewardship of President Medvedev and the brinksmanship of Prime Minister Putin, Russia has played ‘the capitalist’ game better than any capitalist can play it in any industrialized, western economy just like China has done.
Russia now owns $10 billion dollars worth of IMF bonds. Russia sits on about $516 billion or more in foreign exchange reserves. Russia is the world’s largest gas producer globally and now holds the third largest foreign exchange reserves due to the sharp rise in commodity prices. Its foreign exchange reserve position sits after China and Japan.
It was the then President Vladimir Putin in 2006 who politically crafted and organized the meeting between Russia and the other three BRIC economies (Brazil, India, and China) at a UN sideline meeting to get the BRIC economies allied. Since April 2011, South Africa has joined as the fifth BRIC economy. The alliance is now called ‘BRICS.’
According to the CIA World Factbook, Russia is considered a ‘Central Asian’ not European country with regard to its geographic location. This means Russia is one of three BRIC economies located on the Asian continent along with the BRIC economies of India and China. Given the fact Russia is a Central Asian country, the political leadership directs its attention to such countries as Kazakhstan, Uzbekistan, Tajikistan, and Azerbaijan which comprises along with China, the Shanghai Cooperation Organization.
In 2005, Russia ranked among the leading world producers or was a significant producer of such mineral commodities as: aluminum; arsenic; asbestos; bauxite; boron; cadmium; cement; coal; cobalt; copper; diamond; fluorspar; gold; iron ore; lime; lithium; magnesium compounds and metals; mica, sheet, and flake; natural gas; nickel; nitrogen; oil shale; palladium; peat; petroleum; phosphate; potash; rhenium; silicon, sulfur; titanium sponge; tin; tungsten; and vanadium.
In 2009, Russia was the world’s largest exporter of natural gas, the second largest exporter of oil, and the third largest exporter of steel and primary aluminum – and other less competitive heavy industries that remain dependent on the Russian domestic market. This reliance on commodity exports makes Russia vulnerable to boom and bust cycles that follow the highly volatile swings in global commodity prices.
Since 2007, the Russia government has embarked on an ambitious program to reduce this dependency and build up the country’s high technology sectors, but with few results so far. The economy had averaged 7% growth since the 1998 Russian financial crisis, resulting in a doubling of real disposable incomes and the emergence of a middle class. The Russian economy, however, was one of the hardest hit by the 2008-09 global economic crisis as oil prices plummeted and the foreign credits that Russian banks and firms relied on dried up. The economic decline bottomed out in mid-2009 and the economy began to grow in the first quarter of 2010.
Russia is indeed a BRIC economy to watch given the fact that it is a fiscally responsible country with enormous foreign exchange reserves. Also, it is one of the naturally endowed rich countries in the world when it comes to renewable energies such as wind, solar, hydroelectric power given its diverse, massive landscape. It is a BRICS economy with almost endless strategic resources and an extraordinary bright future.