Oil men and investment bankers are throwing money around expensive nightspots in Moscow these days as investors crowd into Russia again to get a slice of the action in one of the world's hottest economies.
With the Moscow stock market already at all-time highs after rocketing past a level not seen since before the 1998 financial crash, fresh euphoria erupted when Moody's upgraded Russia's credit rating Thursday to investment grade.
"Russia's economy is extremely solid and its prospects are excellent," enthused Christopher Granville of the Moscow-based brokerage United Financial Group, hailing the move as a "strong formal stamp of approval."
Only five years ago, badly-burned foreign investors deserted the country when Russia defaulted on its debt on August 17, 1998, sending stocks and the national currency into a devastating tailspin.
The Russian market lost 90 percent of its value in 1998 while the ruble shed 80 percent in the last six months of that year.
But under President Vladimir Putin, a tough-talking former KGB colonel who took the reins of power from his ailing predecessor Boris Yeltsin at the end of 1999, Russia has turned the page on that bitter chapter.
On the back of high world oil prices, Russia's battered economy took off with a vengeance and now in its fourth year of consecutive growth, gross domestic product expanded nearly seven percent in the first eight months of 2003, on a par with China.
With the nation's coffers swelled by petrodollars, Russia has accumulated international currency reserves of more than 62 billion dollars (54 billion euros).
And adopting tight fiscal discipline, the Putin administration has used the windfall oil revenues to pay back its foreign debt, lowering Russia's debt-to-GDP ratio from nearly 100 percent in 1999 to 33 percent today.
These prudent policies have paid dividends and today investors are back in business.
Investment funds are directing massive flows into the Russian stock market, whose performance is the envy of Wall Street, and the Moscow RTS index has risen 75 percent on the year.
Russia, the second-largest oil exporter after Saudi Arabia, has become a magnet for Western majors looking to replenish dwindling reserves and in a spectacular display of investor confidence, BP invested 7.7 billion dollars this year in the Russian TNK oil company.
That could be dwarfed soon by the world's biggest oil company, ExxonMobil, in talks over paying a reported 25 billion dollars for 40 percent of YukosSibneft, Russia's top oil and natural gas producer in the final stages of a merger.
"Putin is an able manager, he's popular and there is increasing consensus around the new system, which is delivering good gains at the moment," commented Al Breach, chief economist at Brunswick financial house in Moscow.
"There is a determination among the policy-making establishment not to go back to the bad old days," he added.
Some commentators worry however that the authoritarian-leaning Russian leader and his allies from the secret services have set the clock back for democratic freedoms in Russia.
"In a certain sense it's good if compared to the anarchy which existed under Yeltsin, when there were no rules of the game, and a lot of instability," said Yevgeny Volk, Moscow director of the US-based Heritage Foundation think-tank.
"But it is dangerous when you have certain clans in power which don't feel accountable to the electorate. They use this managed democracy for their personal ends and vested interests," he added.
An ongoing Kremlin standoff with Yukos, whose billionaire head Mikhail Khodorkovsky has been financing opposition parties, prompted fears of a review of the murky privatization deals of the 1990s that would undermine private property rights.
Another concern is that Russia has not diversified away from its energy sector -- exposing it to the volatility of oil prices -- and most of the economy remains in its inefficient, Soviet-era state.
While there are exceptions such as fruit-juice makers "they are still islands of competence in an ocean of inefficiency outside the oil sector," Christof Ruehl, chief economist at the World Bank's Russia office, told AFP.
Likewise structural reforms, especially of the banking sector, which in a market economy oils the economic engine, are not moving forward.
"The economy is on the right track but it is not out of the woods yet," Ruehl concluded.
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