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Thick as a BRIC

Analysis: Sure, Obama and Medvedev are talking about the economy. Maybe they shouldn't be.

U.S. President Barack Obama and Russian President Dmitry Medvedev hold a joint news conference at the Kremlin in Moscow, July 6, 2009. The United States and Russia agreed on Monday to "reset" their relations and would complete a legally binding nuclear deal by the end of 2009, Obama told a news conference. (Jim Young/Reuters)

The door of the American century – held ajar a few extra years by the bubble-headed financial policies of the past decade — hit Barack Obama pretty hard as it slammed shut at the end of 2008. The global economic crisis has put the United States on the defensive, both economically and politically, and looming behind everything Washington does on the world stage these days is a historic question: Is this the beginning of the end of the American juggernaut?

In Moscow, many hope the answer is “yes.” Indeed, Russia can reasonably be viewed as the head cheerleader of the “America in decline” section, as if somehow Russia’s own problems would be solved if only the American empire suffered the same fate as the Soviet one.

That’s a sad statement about a country being lumped together with Brazil, India and China as part of the BRIC powers, which some feel will play a major role in shaping the coming decades. But if Russia has a leadership role in the world economy, it has yet to earn it. In fact, alone among the BRICS, only Russia seems to view its economic prospects in direct opposition to American power, and rule of law as merely an annoyance.

Increasingly closed off from international investors (IKEA is the latest to announce it will leave Russia), and reliant on brute force and energy blackmail to get its way in the world, Russia has less in common with its fellow “BRICs” than it does with single-commodity countries like Venezuela or Algeria.

The recession has hit Russia particularly hard. Gross domestic product fell 11 percent between May 2008 and May 2009.

Russia’s sovereign wealth fund — all the money it built up selling oil at high prices — is dropping precipitously month-by-month as the government tries to prop up the economy. Contrast that with slower but still significant growth in China, India and Brazil, and you have to wonder if the future of global economics might belong to the “BICs,” not the BRICs.

Look at the other BRICs and you see wise, long-term thinking overriding nationalist reflexes in almost every case. Brazil, a major beneficiary of U.S. trade, charts a careful line between Washington and Latin America’s other pole, Venezuela’s Hugo Chavez. India knows a good deal of its transformative foreign capital inflows are due to an open and relatively transparent relationship with the U.S. corporate sector.