Is Russia’s place as part of the iconic BRIC countries under threat? Noises from many in the economic and investment communities are suggesting that Russia should be dropped from this informal grouping of large developing economies in favour of Indonesia, for example. But is this really a serious proposition? Is Russia’s place at the top table of emerging economies really under threat?

The BRIC countries met in a full-scale heads of government gathering in May 2008, although the first BRIC Summit took place in Yekaterinburg, Russia in June 2009. At the time, analysts took this to be a sign that these four developing economies were about to convert their growing economic power into greater political clout. By working together, the BRICS could dominate the global economy by 2050. In this scenario, China would lead in the production of manufactured goods, India would control the supply of services, with Russia and Brazil dominating in the supply of raw materials.

So what has happened since then to bring Russia’s standing in this elite group into question? Firstly, the problems and challenges of doing business in Russia have begun to be voiced openly and understood more widely. According to some commentators, these challenges include corruption, the failure of the rule of law, unprotected property rights, as well as the threat of physical violence.

In addition to the day-to-day stresses of carrying out business in Russia, as experienced by IKEA in this Biz/ed blog entry, there have been several worrying human rights’ issues raised by the Khodorkovsky case and the tensions between Russia and the UK surrounding the death of former KGB officer Alexander Litvinenko in Britain, as a result of poisoning by radioactive polonium 210. There are also the continuing border disputes that affect Russia’s North Caucusus region threatening to bring chaos to the heart of the country, as in last month’s bomb attack at Moscow’s Domodedovo airport, which killed 35 and left more than 100 wounded.

And yet, there is the other side to Russia which these problems fail to take into account. The country has vast raw material wealth. It has the world’s largest proven reserves of gas and among the biggest stock of global oil. Its economy began to grow again last year after suffering a steep decline in 2009. Of course, Russia is highly dependent on world prices of raw materials. But as fossil fuels become scarcer, Russia’s mineral wealth should help it develop its wider economy, given political will to do so. It’s also worth pointing out that very few countries do not have border disputes, the increased threat of terror and corruption problems.

Pro-Russian commentators stress the country’s European credentials, with its culture of the arts through literature, theatre, music and dance. Russia is also a world-leader in space travel, building on the achievements of its early space missions, which included manned space exploration with the launch of Yuri Gagarin into outer space 50 years ago. Indeed, Russia’s space programme continues to this day, with experiments on a manned mission to Mars underway at the moment.

With its problems of political instability, lack of western–style rule of law, prevalence of a gangster culture in business, and questionable human rights attitude, Russia is clearly not an easy place for most westerners to do business. There is a long way to go before the country finds itself labelled as one of the great democracies, for instance. But nevertheless, Russia is a great power, with the economic resources, military power, political strength and geographic location to sustain its development. Talk of its decline and imminent departure from the BRIC group is probably wide of the mark.