Still, seen from a safe distance, these blemishes looked relatively benign against the backdrop of the reforms Putin has already instituted, including the 13-percent flat rate personal income tax, a reduction in the tax on profits, a reduction in the number of business activities subject to licensing and various judicial reforms that putatively bring Russia’s legal system more in line with Western practice.

Indeed, Bush administration officials cited the Russian president’s reform efforts–together, of course, with his support for the U.S.-led war on international terrorism–during recent appearances on Capitol Hill aimed at convincing the U.S. Congress to lift restrictions on Russia still in force under the Jackson-Vanik amendment. That measure, passed in 1974, required countries “nonmarket” countries like the Soviet Union to allow free emigration in order to be eligible for normal trading status. The Bush administration is expected to reach a decision on whether to reclassify Russia as a market economy soon, perhaps before the U.S. president’s trip to Moscow in May. Given that Kazakhstan was recently granted market status, it’s hard to see how Russia can be refused. Meanwhile, Moody’s Investors Service this week raised Russia’s credit rating outlook from “positive” from “stable.” The international credit rating agency cited, among other things, Russia’s “continued commitment to structural reforms and macroeconomic stability.”

In another sign that foreign investors are cautiously optimistic, British Petroleum, announced yesterday (April 16) that it was purchasing a 15-percent stake in the oil giant Sidanco to add to the 10-percent stake it bought in 1997. The announcement of the purchase was all the more surprising given that it marked a deal between BP and Sidanco’s owner–the Alfa Group, run by oligarch Mikhail Fridman, which back in 1999 (through its subsidiary TNK) won control of Chernogorneft, Sidanco’s main production subsidiary, producing $1 billion worth of crude a year, for a mere $178 million in a suspect bankruptcy auction. BP at the time denounced the sale and threatened to pull out of Russia. “Mafia, gangsters, drug traffickers! That is what they shouted,” Fridman later told Euromoney magazine. “We don’t want to screw foreign investors…. It is just business, a tough business, but it is normal within the clear limitations of Russian law.” In any case, the two sides subsequently kissed and made up and now, it seems, have decided to renew their vows.