The good times that Russia has enjoyed for the past six years continued in 2006. I will describe some of the elements of this remarkable recent performance, but only briefly. My main remarks will rather focus on two broader issues. The first is how I view Russia’s political economy working today. This is the system of “rent sharing” that Professor Barry Ickes of Penn State University and I have written about. I will also discuss Vladimir Putin’s key role in shaping and managing this system. The second topic is the fundamental challenges the economy faces for the longer term. I will especially focus on the pitfalls along the way. In a new book we are writing, Barry Ickes and I describe them as the “Bear Traps.” I will conclude by asking how, against this background, Russia’s economy may evolve in the shorter and longer term.