Dmitry Medvedev’s election as president opens an era of political partnership in Russia — though for the time being, Vladimir Putin will serve as senior partner. The arrangement ensures that Russia will remain politically stable, at least for the near term, and that its economy will continue to expand, generating more opportunities for foreign investors. But Kremlin foreign policy will create new headaches for Western policymakers — and especially for Russia’s neighbours.

For foreign investors in Russia’s growth, these are heady times. Medvedev, a capable technocrat, offers credible promises to further liberalise non-strategic sectors of the Russian economy. The country has an exceptionally strong fiscal position, the world’s third largest gold and currency reserves, and projected GDP growth of between 7 and 7.5 per cent for 2008. Rules of the road for foreign investment have become clearer over the past year, and Russia’s new president will ensure they become clearer still.

The country’s middle class has grown substantially in recent years, allowing foreign and domestic investors alike to profit from the rising demand for a wide range of consumer products. In addition, the Russian economy is ideally positioned to profit from the current geopolitical environment. Three economic sectors vital to Russia’s growth — oil and gas, arms, and nuclear energy — are much in demand around the world these days.

Local business leaders I met during a recent visit to Moscow seemed convinced that a US economic slowdown holds few risks for Russian growth. Investors were bullish on everything from opportunities created by the longer-term effects of climate change on Russia’s Arctic shipping lanes to an underdeveloped agricultural sector that could eventually become an important player in alternative energy markets.

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