ARTICLE: “Fueled by Oil Money, Russian Economy Soars: An Investment Boom Transforms Industries; Bor’s Barter Days Over,” by Guy Chazan, Wall Street Journal, 13 March 2007, p. A1.

This article speaks for itself:

On Bor Glassworks’ state-of-the-art production line here, workers in blue overalls churn out windshields for Russian-made Fords and Renaults--and offer a glimpse of an investment boom transforming Russia’s industrial landscape.

The glass company was once so poor it paid its workers sewing machines and other tradable goods. Now, after an injection of $100 million from Belgian investors, it’s a success story: Bor produces a growing share of windows for the western cars assembled on Russian soil.

“We have a great future ahead of us,” says Valery Tarbeyev, Bor’s chief executive. “Some people are waiting in line up to six months for a new Ford Focus.

Across Russia, companies are spending billions of dollars to upgrade facilities and expand capacity--all in an effort to keep pace with surging consumer demand. The activity is the latest stage of an economic turnaround that has delivered seven years of robust growth. Fueled by Russia’s vast energy sector but ranging well beyond it, the boom goes a long way to explain Russia’s new assertiveness on the world stage.

The revival--dating roughly back to the 2000 election of Vladimir Putin--is also a major reason for the president’s enormous popularity. Under Mr. Putin, Russia’s per-capita gross domestic product has quadrupled to nearly $7,000, and about 20 million people have been lifted out of poverty. Global corporations, such as Intel Corp. and Ford Motor Co., are fast expanding their Russian operations.

For the first time since the end of the Soviet Union, opinion polls show, more people are optimistic about the future than pessimistic.

Naturally, observers say there is too much state-involvement still and Russia lacks the overall entrepreneurial spirit of India and China, but guess what? That will change only when people in Russia, both on top and below, see that deficiency as the major hindrance to further increasing income levels. So long as the current system suffices, helped in no small part by high oil prices that India and China fuel, don’t expect much change.

But here’s the best part:

Businesses are now plowing profits back into fixed capital--assets such as machinery and new buildings.

As Benjamin Friedman writes in his brilliant “The Moral Consequences of Economic Growth,” when incomes rose in America throughout its history, so did political freedom, and when it became stagnant or dropped, so did our long march to greater freedom. The same will be true for Russia, so we should continue to encourage the growing economic connectivity so long as the impact is rising income levels across a wide swath of the economy and society.