The Mechanism of Russian economic development in the 2000s is characterized by heavy dependence on soaring oil prices, increasing household consumption as the driving force of the growth, and some symptoms of Dutch disease. Although in this period manufacturing industries grew relatively rapidly despite the sharp appreciation of the ruble, I argue that symptoms of Dutch disease were alleviated due to several factors, including enormous increases in demand both for domestic production and imports, prompted by skyrocketing oil prices, and large-scale interventions in foreign exchange markets by the Central Bank of Russia which restricted the expansion in imports to a certain degree.
