Russia’s Evolving Role in BRICS: Is It Still Considered To Be An Emerging Market?

Russia was one of the founding members of BRICS, a coalition of major emerging economies consisting originally of Brazil, India, China and later South Africa. It was founded as a platform to improve economic coordination and challenge the dominance of Western-led financial institutions throughout the Global North (Käkönen, 2014), now framed as a significant geopolitical and economic bloc. It has now expanded to include countries such as Egypt, Ethiopia, Saudi Arabia and other emerging economies as of 2024, reflecting a shifting global landscape in which emerging economies play an increasingly influential role.

However, Russia’s position within BRICS has been increasingly complex. Although it is formally perceived as an emerging market, Russia recently exhibits several features more closely associated with developed economies. These include having a highly educated population, advanced technological and military industries, and significant geopolitical influence. At the same time, persistent sanctioning and significant waves of nationalisation continue to erode at its global presence and economic indicators. Although, the extent to which this has impacted Russia’s economic power and domestic growth is debateable. Such contradictions reflect broader debates about whether categories such as BRICS and “emerging markets” constitute a coherent analytical framework or merely a descriptive label (Armijo, 2007). This article will therefore critically assess an important question: to what extent can Russia be considered an emerging market, and do recent factors categorise a shift towards developed economy status?

One of the most significant economic shifts in Russia since its invasion of Ukraine on 24 February 2022 has been the accelerated nationalisation of key industries. Prior to the invasion of Ukraine, Russia’s GDP Annual Growth Rate stood at 11.4% in the second quarter of 2021. This figure dropped to -3.7% in the second quarter of 2022 (Trading Economics, 2024), showing the impact of consistent sanctioning from the Global North. However, Russia’s GDP Growth Rate has stabilised following a restructuring of their economy: in the third quarter of 2023, Russia still experienced a 6.2% growth rate. Russia’s response to unprecedented Western sanctions including restrictions on banking, technology imports, oil exports, and foreign corporate activity, has increasingly moved to bring strategic sectors under state control. This includes the takeover of formerly foreign-owned assets, heightened state oversight of energy production, and the consolidation of defence-related industries. Supporters argue that despite the ongoing war, this nationalisation has helped stabilize the economy during external shocks by preventing critical infrastructure from collapsing and ensuring continuity of production. It has also allowed Russia to redirect output toward domestic needs and non-Western markets, particularly within BRICS and the broader Global South. However, critics such as Kotz contend that expanded state ownership may undermine long-term competitiveness by reducing market efficiency, discouraging foreign investment, and enabling politically driven rather than economically rational decision-making. He argues that this could give way to a distorted form of Capitalism which Russia appears to be heading towards (Kotz, 2001). As a result, while nationalisation has offered short-term resilience under sanctions, its overall impact on Russia’s future economic development remains uncertain.

Perhaps Russia’s greatest barrier to being considered a developed economy is their dependence on natural resource exports, particularly oil and gas. According to Russia’s Audit Chamber, as of 2024, these exports amounted to 16.7% of Russia’s GDP, with 49.4% of the government’s revenue coming from the oil and gas industry alone (Realnoe Vremya, 2024). Sanctions imposed after 2022 only exacerbated this overreliance by restricting Russia’s access to Western markets, technology, and shipping services, forcing it to export at discounted rates towards Asia. However, high global oil prices diminished the economic shock and generated sustainable state revenue, but reliance on resource extraction continues to limit Russia’s diversification. This reinforces that Russia may still be considered an emerging market, having slowed their transition due to their invasion of Ukraine. Additionally, Russia’s isolation from technologies limits their capital growth, making their infrastructure used to extract oil less modern. This deters investment but also displaces their economy among other competitors who have lower costs and advanced capital.

Although Russia faces significant technological constraints across much of its economy, particularly in civilian industries and energy infrastructure, it retains highly advanced technological capacity in select strategic sectors, which supports the argument that it partially resembles a developed market. Russia possesses sophisticated capabilities in aerospace, nuclear energy, defence manufacturing, and space technology, industries that require advanced research institutions, skilled labour, and long-term capital investment. For example, Russia remains one of the few countries capable of independently designing nuclear reactors and space launch systems, a level of industrial complexity rarely achieved by emerging economies. However, these capabilities are concentrated and driven by the state rather than being broadly diffused across the economy. This uneven institutional development, as argued by Blumenfeld, explains why Russia can simultaneously exhibit characteristics of a developed economy in strategic industries while remaining structurally constrained by outdated infrastructure and limited institutional capacity elsewhere (Blumenfeld, 1996).

Despite certain advanced capabilities, Russia remains classified as an emerging market due to persistent structural and institutional weaknesses reflected in key economic indicators. Russia’s GDP per capita stood at approximately 13,000 USD in 2023 (Trading Economics, 2024), significantly below that of developed economies such as Germany and the United States, highlighting lower average income and productivity levels. Foreign direct investment has declined sharply since 2022, with net inflows turning negative in 2023 as foreign firms exited the market, reflecting low investor confidence and heightened political risk. Labour productivity in Russia is estimated to be less than half of the OECD average, indicating inefficient capital use and limited technological diffusion across the economy. Additionally, state owned enterprises account for more than half of total economic output, restricting competition and private sector dynamism. These factors, combined with weak institutional quality and corruption rankings in the bottom third globally, reinforce Russia’s classification as an emerging rather than developed economy.

While the argument that Russia exhibits characteristics of a developed economy is supported by its advanced capabilities in strategic sectors and relatively high levels of human capital, this evidence remains insufficient to justify a full reclassification. These strengths are concentrated in a narrow set of state dominated industries and have not translated into broad based economic development or sustained productivity growth across the wider economy. Developed market status requires not only isolated technological sophistication but also diversified growth, strong institutions, and widespread private sector innovation. Russia’s continued dependence on resource exports, weak institutional framework, and limited integration into global financial and technological networks undermine the persuasiveness of the developed market argument. As a result, despite selective indicators of advancement, the case for Russia being considered a developed economy remains unconvincing.

This article has examined whether Russia should still be considered an emerging market within BRICS. While Russia demonstrates developed economic characteristics in strategic, state led sectors such as defence, nuclear energy, and aerospace, these capabilities remain limited in scope and have not translated into broad based economic development. Nationalisation and high energy revenues have provided short term stability following sanctions, but they have also reinforced structural inefficiencies and discouraged investment. Continued dependence on oil and gas, weak institutions, and low productivity prevents Russia from achieving the diversification and innovation typical of developed markets. As a result, despite selective indicators of advancement, Russia remains best classified as an emerging market with hybrid characteristics rather than a fully developed economy.

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