February 5, 2024 - 11:00am

Two major recent stories appear to confirm the rising power of Brics+. Last week the International Monetary Fund (IMF) released its projections for GDP growth in all the major economies. Possibly the most surprising finding was that the Russian economy is growing faster in 2024 than any of its Western counterparts — having outperformed all of them in 2023. 

The Financial Times responded this weekend by running a long piece exploring Russia’s economic endurance. “The regime is resilient because it sits on an oil rig,” Elina Ribakova, a non-resident senior fellow at the Peterson Institute for International Economics, told the paper. “The Russian economy now is like a gas station that has started producing tanks.” This comment was a riff off the famous saying, popularised by the late senator John McCain, that “Russia is a gas station masquerading as a country.” 

Ribakova cannot have it both ways: Russia is either a gas station or it is a serious industrial economy capable of mass-producing advanced weaponry in a way that many Western economies no longer can. Last summer, for example, the German arms maker Rheinmetall, which produces the Leopard II tank, stated that it could not commit to orders coming from Ukraine due to production bottlenecks.

Around the same time as the IMF report, it was announced that Iran’s exports of crude oil had grown by roughly 50% to 1.29 million barrels per day. This puts Iranian oil exports back to where they were a decade ago, before the Trump administration imposed sanctions in 2019. Most of the increase in purchases of Iranian oil came from China. Iran’s economy appears to have picked up pace too. The IMF put the country’s economic growth at 5.5% in 2023, up from 3.8% in 2022 and higher than any rate since 2016. 

What we are seeing before our eyes is the continuing rise of Brics+. When Brics countries announced an expansion last year, it was widely dismissed as a sideshow in which leaders wouldn’t be able to agree on anything. Yet here we are in 2024, with Russia outpacing all the Western economies and Iran surviving sanctions due to the new trade relations within Brics+. Other large Brics+ members such as India are also growing rapidly, with 6.7% growth in 2023 and 6.5% projected in 2024 (Brazil, however, looks set to stagnate).

Adding Beijing to the equation makes the picture even gloomier. After a year of Western commentators saying that China was sluggish and would not meet its growth target, the country announced in December that it had exceeded it by 0.2%. This is lower growth than China had in the past but still the fourth-highest rate of GDP growth among the IMF-listed countries. The Chinese economy is certainly facing problems of its own, but the current outlook hardly marks a major crisis (despite predictions to the contrary). 

Many of the Brics+ countries still have major issues that they need to overcome. The most obvious of these are demographic, with the birth rates in most countries falling. But this is a global problem from which we are not exempt. China will also have to make more aggressive moves to boost consumption and stop relying so much on investment for economic growth. To ignore these problems might veer in the direction of excessive optimism, but to insist that they will result in imminent collapse is not tenable. 

Right now, it feels like we are in a Brezhnev era of sorts, projecting our economic problems onto others. But as these recent developments indicate, this cannot last forever. Western countries urgently need to formulate a strategic plan for economic development in this different world. Until then, they will be locked in a cycle of self-deception. 

Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics