TICKS not BRICS? Russia’s race to replace commodities with technology

In an article last week, the Financial Times wrote that the concept of the BRICS group of emerging economies was dead, arguing that Russia and Brazil’s dependence on commodities exports had led to them being usurped by tech-heavy economies Taiwan and South Korea, leading to the creation of the TICKS (Taiwan, India, China, [South] Korea and South Africa).

“The realignment tells us much about the changing nature of emerging markets — and the world in general — with services, particularly technology, to the fore and trade in physical goods, especially commodities, in retreat,” the Financial Times wrote, explaining the switch in emerging market fund managers’ interest.

With the price of crude oil, of which Russia is the world’s top producer, sinking to 12-year lows of about $27 a barrel last month, prompting the ruble to fall to a record low, the need to diversify the economy has never been so starkly pressing.

Experts say Russia can develop its tech industry – and indeed is in the process of doing so – but caution that the progression will take time.