• Military

• WMD Menu                           

• Introduction
• Systems
• Facilities
• Agencies
• Operations
• Countries
• Hot Documents
• News
• Reports
• Policy
• Budget
• Congress
• Links

• Intelligence
• Homeland Security
• Space

Analysis: Russia's Economic Pipeline

Council on Foreign Relations

February 29, 2008
Author: Lee Hudson Teslik

Russia’s presumptive next president, Dmitri Medvedev, is a businessman. Before entering politics, Medvedev worked at a timber company, then sat on the board of a major Russian paper producer. He is currently the chairman of Gazprom, the energy giant that is Russia’s largest company and the world’s leading producer of natural gas. Some analysts, like CFR’s Stephen Sestanovich, say Medvedev’s business background may explain why Russian President Vladimir Putin seems so keen on him. Medvedev has no explicit KGB connections, Sestanovich says, which extracts him from Russia’s political turf wars. But Medvedev also makes a case for himself on economic grounds (Moscow Times). And if he ascends to power, as most analysts expect, he will do so at a time when Russia’s economy is at a crossroads—with booming wealth from natural resources putting the country in a newly powerful position, but also a host of problems threatening to undermine Moscow’s new buoyancy.

Spiking oil and natural gas prices account for much of Russia’s boom. Global oil prices have increased nearly tenfold since 1998, when they hit lows under eleven dollars per barrel (PDF). Data from the International Monetary Fund (IMF), displayed below, shows how this trend has steadily lifted Russia’s per-capita gross domestic product (GDP) from a point where it was well below the global average to having now surpassed it. In 2007, Russia showed GDP growth between 6.5 percent and 8.1 percent, depending whose numbers you use. In either case, that was at least double the 2007 growth rate of the United States, though the U.S. economy still dwarfs that of Russia in overall size. The Russian economy has also benefited from a flood of foreign investment.

Read the rest of this article on the cfr.org website.

Copyright 2008 by the Council on Foreign Relations. This material is republished on GlobalSecurity.org with specific permission from the cfr.org. Reprint and republication queries for this article should be directed to cfr.org.