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Russia's Living Standard Up, Driven by High Oil Revenues

A leading Russian economist said Monday Russia's economic resurgence is driven by its booming energy sector. VOA's Barry Wood has more.

Leonid Grigoriev told an audience at Washington's Woodrow Wilson Center Monday that income levels in Russia have tripled since the low point of transition in 1996. Per capita gross domestic product, says Grigoriev, has reached $7,000 and finally returned to the pre-transition levels of 1990.

"Seven thousand dollars per head of GDP [Gross Domestic Product] is one-fourth of what applies to 25 European Union economies, I believe, and one-sixth of what is here [in the U.S.]," said Leonid Grigoriev. "So it [Russia] is [still] a relatively poor country. The government got a great windfall because of the taxation of oil and gas."

In his remarks, Grigoriev did not address Russia's recent moves against foreign energy companies or its use of energy as a weapon in disputes with countries like Ukraine and Georgia.

Grigoriev said that Russia's oil and gas industry is likely to continue to do well, no matter the short-term trend in world prices. He said needed investments are now taking place in an effort to repair 15 years of neglect.

Russia's oil exports have doubled since 2000 and the country is nearly equal to Saudi Arabia in oil output. He said President Vladimir Putin is popular with the public in part because he has taken a tough stand against the very rich individuals who exercised near monopoly control over Russian energy companies.

"It's not an easy point for Russians in general to understand the difference between private and public control [of corporations]," he said. "Because our privatization didn't produce mass [widespread] ownership. We don't have millions of owners of shares in big companies."

Grigoriev was a deputy minister of finance under President Boris Yeltsin. He now teaches in Moscow and heads the city's Institute of Energy and Finance.