Five years after a financial crisis brought Russia's post-Soviet development to a screeching halt, the country's economy has not only recovered but is speeding at a pace few would have thought possible.
On August 17, 1998, known here as Black Monday, the Russian government effectively defaulted on its debt, setting off a devastating chain reaction.
The ruble plunged, the stock market crashed and banks announced they could no longer meet their obligations, burning investors and wiping out the savings of many ordinary Russians.
Today investors are pouring in billions, the stock market is growing at a pace Wall Street can only envy, record-high reserves have filled government coffers to bursting and the nation's debt-to-GDP ratio is better than that of Europe's powerhouse Germany.
"The economic situation is as good as it has ever been," William Browder, who heads the Hermitage Capital investment fund and has been investing in Russian companies for years, told AFP.
But dangers still lurk behind this glittering facade, analysts warn.
"The economy is on the right track but it is not out of the woods yet," Christof Ruehl, chief economist at the World Bank's Russia office, told AFP.
Yet even cautious, risk-conscious observers admit the comeback has been spectacular.
"We didn't think it would happen this quick," said an investment banker who has worked in Russia for a decade.
So what happened? Luck and oil, observers say.
With a devalued ruble, the costs of imports soared and Russians turned to domestic producers, giving them a much-needed lift. The capacity that stood idle suddenly swung into action.
Then, six months after the crisis, the world oil price began to rise and with it Russia's fortunes.
The country is one of the world's major oil and gas producers and with the rising oil price, government coffers filled and the economy rumbled to life.
And just when a strengthening ruble threatened the recovery (a stronger ruble means Russian exports become more expensive), luck kicked in -- the euro rose against the dollar, easing the effect.
The result? GDP grew by 5.0 percent in 2001, 4.3 percent in 2002 and 6.6 percent during the first four months of this year.
Foreign currency reserves stand at a whopping 64 billion dollars (57 billion euros).
And country has been dilligently paying back its foreign debt -- 17.3 billion dollars this year alone -- lowering the nation's current debt-to-GDP ratio to 35 percent, better than that of Germany, France and Italy, according to the World Bank.
Investors have returned with a vengeance. As stocks shed value in Western markets, Russia's RTS has steadily climbed and today stands above pre-crisis levels.
And in a spectacular display of investor confidence, British Petroleum announced this year that it would invest some six billion dollars in Russia's TNK oil company.
"Symbolically, it is very important," said a managing director at a major international investment bank. "They are showing their investors around the world that they have to watch Russia," he told AFP.
But much still needs to be done before Russia can be a well-functioning market economy, analysts say.
Aside from the oil sector, most of the economy remains in its inefficient, Soviet-era state, World Bank's Ruehl says.
While bright spots do exist -- by making relatively minor investments, for example, domestic juice makers have markedly improved on quality and regained market share previously held by imports -- they are few and far between.
"They are still islands of competence in an ocean of inefficiency outside the oil sector," Ruehl said.
Likewise the banking sector, which in a market economy greases the economic engine, is sorely in need of reform.
These reforms, along with a reliable legal system, are essential because they would diversify the economy and help protect Russia from the volatility of the oil price, which is likely to fall once oil from Iraq hits the market.
"The current situation is still untested," Ruehl said. "If you talk to people who look back... the economy is in best shape since the start of Russian reforms."
"But if you look ahead like me it is not where it should be," he said.
In perhaps the best sign that things have really begun to turn around, Ruehl said: "When I traveled to regions (this year), even in the most desolate places people would for the first time say that it hasn't gotten worse."
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