THE RUSSIAN FEDERATION

Territory: 17,098,200 square kilometers.

Population: 141.9 million (as of July 1, 2008).

Administrative division: As of July 1, 2008, the country had 21 republics, 9 territories, 46 regions, two federal cities, one autonomous region, four autonomous areas and seven federal districts.

Russia occupies the world’s first place in its territory, seventh place in its population and eighth place in its GDP volume counted in U.S. dollars according to purchasing power parity.

National language: Russian.

Currency: Ruble, one ruble equals 100 kopeks.

Fundamental Law: The Russian Constitution was passed in 1993.

In 1991, Russia began electing its Top Executive, the President, by universal, equal and direct suffrage by secret ballot.

On March 2, 2008, Dmitry Medvedev was elected President of Russia.

The executive branch comprises the Government serving until the presidential term expires. The Government consists of the Prime Minister, Deputy Prime Ministers and Federal Ministers.

Since January 1994, the legislative branch includes the Federal Assembly (Parliament) consisting of the Federation Council, its upper house, and the State Duma, its lower house.

The incumbent State Duma comprises the following political parties: United Russia, the Russian Communist Party, the Liberal Democratic Party of Russia and A Just Russia.

National holiday: Day of Russia celebrated on June 12.

The Economy

In 1999 Russia began posting substantial economic growth. The GDP grew by 6.4% in 1999 and by another 10% in 2000. The breakdown for 2001, 2002, 2003, 2004, 2005, 2006 and 2007 is 5.1%, 4.7%, 7.3%, 7.2%, 6.4%, 7.4% and 8.1%, respectively. In January-March 2008, the Russian GDP grew by 8.5%.

Russian industry has been steadily expanding production the last few years. From 2002 through 2006, annual industrial output grew by an average of 7.1%. In 2007, the mining and processing industries, the power, gas and water industries expanded production by 6.3%.

Industrial growth tended to slow down in early 2008. The first half, 2008, saw an industrial production indice of 105.8%, as compared to 107.1% during the corresponding period in 2007. Industrial growth was largely influenced by the processing industry’s fast-paced development. The 111.4% production indice posted for the first half, 2007, dropped to 108.4% during the first half of 2008.

Production of transport systems and equipment, rubber, plastics, timber, wood products, machinery and equipment and non-metal minerals expanded by the greatest margin (16.8%, 15.7%, 13.3%, 10.4% and 8.9%, respectively).

The power, gas and water industries also increased production, posting a 104.1% production indice in the first half, 2008, (output fell by 3.8% in the first half, 2007). The mining industry posted a 100.5% production indice in the first half of 2008 and a 103% indice for 2007, first half.

In 2007, the telecommunications sector boosted profits by 19.1% on 2006. In January-June 2008, profits increased 12.7% on the corresponding 2007 period.

In 2007, agricultural output increased by 3.3% over 2006, increasing by 4.3% in the first half of 2008 over the same period in 2007.

The consumer price indice continued to drop from 1999 through 2006. Nationally, prices increased by 15.1%, 12%, 11.7%, 10.9% and 9% in 2002, 2003, 2004, 2005 and 2006, respectively.

From 2007 there was a growth in consumer prices. In 2007, the consumer price indice was 11.9%, and 8.7% in the first half of 2008.

On July 1, 2008, the Bank of Russia estimated the country’s international reserves at $568.3 billion, a 40% increase over July 1, 2007. As of January 1, 2008, Russia’s international reserves totaled $477.9 billion, soaring by 60% on January-June 2007.

In 2007, the Russian economy received foreign investment worth $120.9 billion, a 120% increase over 2006. First half, 2008, foreign investment volumes declined by 22.9% over the corresponding 2007 period.

In 2007, fixed capital investment volumes totaled 6,626.8 billion rubles ($269.3 million), soaring by 21.1% over 2006. First half, 2008, saw fixed capital investment volumes reach 3,256.1 billion rubles ($132.3 million), a 15.4% increase over first half, 2007.

In 2007, the Russian foreign trade turnover reached $577.9 billion, a 23.5% increase over 2006. Exports and imports soared by 16.8% and 36% to reach $354.4 billion and $223.5 billion, respectively.

During the first half of 2008, the Russian foreign trade turnover soared by 48.6% over the corresponding 2007 period to reach $372.9 billion. In the first half of 2008, Russian exports and imports soared by 53.1% and 41.3% above 2007, first half, to reach $238 billion and $135 billion, respectively.

In 2007, the Shanghai Cooperation Organization accounted for 11.2% of the Russian foreign trade turnover (exports, 8.8% and imports, 15.5%). China accounted for 7.3% of the Russian foreign trade turnover (exports, 4.5% and imports, 12.2%). The share of Kazakhstan was 3.0%, 3.4% and 2.3%, with that of Uzbekistan, Kyrgyzstan and Tajikistan totaling 0.6%, 0.5% and 0.7%, 0.2%, 0.2% and 0.1%б and 0.1%, 0.2% and 0.1%, respectively.

First half, 2008, the Shanghai Cooperation Organization accounted for 10.6% of the Russian foreign trade turnover (exports, 7.9% and imports, 15.6%). China accounted for 7.1% of the Russian foreign trade turnover (exports, 4.4% and imports, 12.3%). The share of Kazakhstan was 2.7%, 2.8% and 2.5%, with that of Uzbekistan, Kyrgyzstan and Tajikistan totaling 0.4%, 0.4% and 0.5%, 0.2%, 0.2% and 0.2%, and 0.1%, 0.2% and 0.1%, respectively.