At the opening of this new millennium, Russia looms on the horizon as an immense opportunity for investors, domestic and foreign alike - but for actual investments to flow and capital flight to be reversed, much will have to change. There are increasingly positive signals in this direction. Russia is a vast country stretching across Europe and Asia, possessing spectacular wealth in the form of exploitable natural resources, technology, a large, skilled workforce, and nearly 150 million consumers whose needs are endless. It is a country whose goals are to move towards a market system based on private capital investment and enterprise and to integrate rapidly into the world economy. Indeed, it has rapidly privatised the bulk of the assets of former state enterprises (although in many cases with a lack of transparency and fairness that has created an unfortunate legacy). It has also spawned hundreds of thousands of new small and medium-sized private enterprises, which have formed the backbone of its economy.

There is an increased interest from foreign investors in the Russian economy, which has seen a continuous growth over the past three years – a turnaround after a decade of declines in the 1990s. It has been quite a shock for many to see how quickly the Russian economy has rebounded from the 1998 financial crisis. On the back of strong oil prices, real GDP growth in 2002 is expected to reach 4 percent. The governmental interim scenarios currently suggest growth in the range 3.4 to 5.6 percent for 2003-05. President Putin instructed the government to step up efforts to further increase the annual growth rate so that Russia could catch up Portugal over the next 10 to 15 years. In all the scenarios, the world oil price assumption plays an important role in view of the fact that Russia is the world's second largest oil exporter. Otherwise, growth is only expected to accelerate if reforms are implemented, and there would also be a lag before the effects of reforms would materialise.

President Putin brought political stability, a welcome change for investors after the rotating governments in the final years of Boris Yeltsin's presidency. The state is consolidating its control functions, and political and macroeconomic risk factors have been significantly reduced. The consolidation of the Federal Government's authority in the regions (via the Presidential Representatives in the Federal Districts) has regional legislation into line with federal law on most issues, thereby overcoming the fragmentation of the national economic territory while reducing administrative barriers and risks. President Putin called on the Russian elite to bring money abroad back to Russia at low tax rates offered, warning that offshore accounts would become increasingly difficult to use as the international community tightens rules governing their use.