03/29/2012, 00.00
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Moscow, odd man out at BRICS for experts

by Nina Achmatova
New Delhi hosts the fourth summit of the five countries, representing 40% of world population and 23% of the global economy. But Russia is increasingly different from China, Brazil, India and South Africa.

Moscow (AsiaNews) - The leaders of BRICS nations (Brazil, Russia, India, China, South Africa) have met for their fourth summit scheduled for March 28 to 29 in New Delhi. But according to experts Russia is the odd man out at the table of those economies for which Goldman Sachs coined the lucky acronym. It lacks all those features that are common to the four other members of the group: high population, strong GDP growth and attractive to foreign investors.

Compared to China and India with an slowing growth, but still 7.5% and 6.9%, Russia is still at 3.5%. With the advanced economies such as Europe, who are in full crisis and risk of stagnation, the Federation - which has its main market in the Old Continent - there are big risks. Especially since the state budget depends heavily on natural resources and the price of crude oil.

Unlike all the other BRICS nations, Russia has failed to broaden its product base for exports in the last ten years. Oil and natural gas, which "represented less than half of exports in 2000 - says the World Bank - in ten years have come to represent two-thirds of total exports, with another 15% on other minerals, while only 9% is for export of high technologies, mainly produced by the defence industry. "

For some time now, the Nobel Laureate, Nouriel Rubini has been saying that Russia no longer deserves to be included in so-called "fantastic five". Speaking in February at an economic conference in Moscow, Roubini warned that without serious structural reforms, the Russian economy will grow too slowly in the coming years. According to the New York University professor, real growth in the near future will be just over 0.5%, added to the worrying demographic decline that has beset the country. Russia, he said, has yet to recover from the severe crisis of 2008-2009, prior to which its rate of growth was at around 8%, with nothing to envy the Chinese.

The Russian economic model, also may prove fragile without a substantial flow of private direct investment, a real campaign of privatization, a reduction of bureaucracy and the presence of the state economy. According to a World Bank report on the Russian economy, the lack of competition on the domestic market, dominated by public companies, which account for 17% of the workforce, discourages both competitiveness and productivity.



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