0 "old" lei equal 1 "new" leu. The economy grew at 6.4%
in 2006, the strongest growth in the last decade. Romania joined the
European Union on 1 January 2007, and the IMF has praised the
country's recent reform efforts in preparation for EU accession.

Russia
Russia ended 2006 with its eighth straight year of growth,
averaging 6.7% annually since the financial crisis of 1998. Although
high oil prices and a relatively cheap ruble are important drivers
of this economic rebound, since 2000 investment and consumer-driven
demand have played a noticeably increasing role. Real fixed capital
investments have averaged gains greater than 10% over the last five
years, and real personal incomes have realized average increases
over 12%. During this time, poverty has declined steadily and the
middle class has continued to expand. Russia has also improved its
international financial position since the 1998 financial crisis.
Over the past several years, Russia has used its stabilization fund
based on oil taxes to prepay all Soviet-era sovereign debt to Paris
Club creditors and the IMF. Foreign debt has decreased to 39% of
GDP, mainly due to decreasing state debt, while commercial debt to
foreigners has risen strongly. Oil export earnings have allowed
Russia to increase its foreign reserves from $12 billion in 1999 to
some $315 billion at yearend 2006, the third largest reserves in the
world. These achievements, along with a renewed government effort to
advance structural reforms and fiscal restraint, have raised
business and investor confidence in Russia's economic prospects.
Russia's economy grew 6.6% in 2006 and inflation growth was below
10% for the first time in the past 10 years. Russia shows signs of
increasing its ties to the global economy, having signed a bilateral
market access agreement with the US as a prelude to possible WTO
entry. Nevertheless, serious problems persist. Oil, natural gas,
metals, and timber account for more than 80% of exports, leaving the
country vulnerable to swings in world commodity prices. Russia's
manufacturing base is dilapidated and must be replaced or modernized
if the country is to achieve broad-based economic growth. The
banking system, while growing at a high rate and increasing consumer
lending, is still small relative to the banking sectors of Russia's
emerging market peers. Domestic and foreign investor sentiment is
tem