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"In general, financial management has been well-handled," said Yasin, who is now head of studies at Moscow's prestigious Higher School of Economics. "The biggest success has been the handling of the [international] reserves and the creation of the stabilization fund."

For once in history, Russia appears to be on the right side of a global price trend. As one of the world's major producers of commodities -- not least oil and gas -- the country is reaping a windfall as commodity prices soar worldwide. But is this price boom another bubble that will burst just as we have seen in real estate markets in a number of countries? Is Russia prepared to deal with the consequences of price volatility?

Mr. Yakovlev, a director at the school's Institute for Industrial and Market Studies, said the news isn't all bad. There have been strides in the manufacturing sector since 1998, when the ruble's crash forced Russian companies to increase their productivity because imported goods - especially food products - were no longer affordable.

Russia is the largest country in the world by land area and the seventh largest in terms of population. It may also have the eighth-largest economy, which is rapidly climbing up the rankings. But its size does not insulate it from the financial turbulence that is increasingly seizing up the world economy.

Martin Gilman, a former senior representative of the IMF in Russia, is a professor at the Higher School of Economics in Moscow.

A relapse of a disease is often more problematic than the original illness. This is the case with inflation in Russia.

It took until 2006 to finally get inflation down to a single-digit -- 9 percent. The long struggle to reduce the inflationary fever finally seemed to be won. The government optimistically projected that inflation would decrease to 7 percent to 8 percent in 2007 and to converge with international levels by 2010.

Martin Gilman, a former senior representative of the IMF in Russia, is a professor at the Higher School of Economics in Moscow

Next week's annual meeting of the World Economic Forum in Davos will open under more than just the usual degree of uncertainty about the direction of world affairs. The U.S. economy is teetering on the brink of a recession whose global reach is unknown. Political factors further complicate making an assessment of how the world will cope with what is likely to be a challenging 2008. Can Russia detach itself from the spreading gloom?

Martin Gilman, a former senior representative of the IMF in Russia, is a professor at the Higher School of Economics in Moscow:
Once again, Russia is in the crosshairs of U.S. policy. Rather that an intentionally Russia-wary position, it results from a 21st-century form of "benign neglect" by Washington -- a term last widely used to describe the attitude of U.S. Treasury Secretary John Connally regarding the plight of the dollar in 1971.

The International Monetary Fund's latest annual report on Russia describes a remarkable trajectory no less exceptional than that of post-World War II Germany or Japan.
Russia's contribution to world growth, in terms of purchasing power parity, will be half as large as that of the entire European Union and much higher than Japan's or Brazil's, the report says.

Global financial markets are nervous and with good reason. The long period of low and stable interest rates is coming to an end. Since the events of August, when U.S., German, French, Chinese and other banks were caught holding suddenly illiquid assets backed by U.S. subprime mortgage securities, the interbank markets in main financial centers have tightened. Liquidity is at a premium, trust is low, and market volatility has risen.
(...)If markets are repricing risk, the provision of liquidity by central banks, including Russia's Central Bank -- and even the Federal Reserve's first step in reducing its short-term interest rate -- may do little to prevent a significant economic slowdown. Of course, it is too early to tell how markets will react.

This mindframe can be seen in the reactions in various Western capitals after Russia nominated last week Josef Tosovsky, the former Czech central banker and prime minister, as its candidate to become managing director of the International Monetary Fund. We heard that Russia's choice was part of a broader anti-Western campaign in the context of the Shanghai Cooperation Organization. We also heard that it is an insidious attempt by the Kremlin to distort international institutions for its own devious purposes.

..."The question is this: how many of today's banks will be able to operate with the tighter margins that will exist after WTO?" - Prof. Vasily Solodkov, Higher School of Economics, Moscow...