That's what the Washington Post calls Russia's growth spurt under Putin, but the numbers don't really support this claim. Russia is not Saudi Arabia. It has a lot of oil, but its also a big economy. It does not live by oil alone. Russia exports approximately 7 million barrels a day, which comes to 2.6 billion barrels a year. If we say that the oil price run-up of recent years has added a preimum of $30 per barrel compared to the pre-Iraq war level, this implies an dividend for Russia of $78 billion a year. According to the CIA Factbook, Russia's exchange rate GDP (the appropriate measure here -- the exports are paid for in foreign currency) was $730 billion in 2006. That puts the oil premium at 10.7 percent of GDP. The IMF data puts average GDP growth in Russia since 2000 at 6.8 percent annually for a cumulative increase of more than 58 percent thus far this decade. The oil dividend certainly helped this growth, but it can hardly explain such a strong and sustained performance. The more obvious explanation is that Russia broke out of the economic straightjacket that the United States and the IMF had imposed when it devalued its currency and temporarily suspended payments on its debt in the middle of 1998. This move was portrayed as a disaster for Russia at the time, as the IMF and the financial team in the Clinton administration (dubbed at the time "the Committee to Save the World") did everything they could to keep Russia from taking this route. It turned out that the Clinton administration's failure in Russia (mourned by Robert Rubin in his book), was the basis for Russia's economic revival. The jump in world oil prices has helped, but Russia's change in economic policies was far more important.
--Dean Baker
