Script:

In the frozen arctic region of the East Siberia, teams from the Russian oil company Rosneft, work in numbing -40 degree cold, digging exploration wells. The massive Vankor field promises to be one of the largest in Russia. Russia’s oil and gas remain the backbone of its economy, but production growth is slowing. Last year, according to analysis of government statistics by the Economists, oil production rose just 2.6 percent. But Russia’s gross domestic product hit a six year high, in the first quarter of this year, rising 7.9 percent, compared to 5 percent in the same period last year. There was major growth in construction, manufacturing and trade, and here is one of the major reasons---Russia’s consumers. Just take a look at Moscow’s newest mall, the European, Yevropeisky, one of the biggest in Europe. Here in Moscow and across Russia, shoppers are flocking to malls like these. Russians have more and more disposable income, and they are spending it like there is no tomorrow. Retail sales are up 30.5 percent this quarter over the same period last year, imports of goods and services up nearly 37 percent. Last year, domestic credit in Russia grew more than 46 percent.

Alexander Gonchruk is part of that growth. He’s president of the Russian corporation Sistema, a 20-billion-dollar conglomerate with five companies in ten industries including telecommunications, construction and services.

The service sector is growing very strongly, unbelievably fast. The purchasing power of consumers is increasing, and that’s stimulating growth in that sector. And in past year, the business climate has seriously improved. It’s become predictable and more stable.

This June at the Saint Petersburg International Economic Forum, President Putin told CEOs from major global corporations, Russia is gradually integrating with the world economy. Another message, the government’s economic strategy isn’t focused just on oil and gas. Russia intends to become a high-tech and industrial leader. For now, Russia’s economy and the purchasing power of consumers remain dependent on global oil prices. If those prices stay high, Russians will continue to have more to spend and the consumer boom will go on.

Jill Dougherty, CNN, Moscow

notes:

Conglomerate: A corporation made up of a number of different companies that operate in diversified fields.