Russia is outpacing the US, UK and Germany in securing its population’s long-term economic and environmental future, according to a new study. Economists at Germany’s Allianz Insurance and Dresdner Bank have ranked Russia sixth in an 18-country index of «sustainability of fiscal and ecological development», ahead of the UK (placed seventh), Germany (ninth), and the US (17th).

The result – described as «unexpected» by the report’s authors on Wednesday – came about because of Russia’s huge oil and gas reserves and the sharp rise in energy prices in recent years, which have boosted significantly the country’s finances.

The index – drawing on data for 2006 from various public sources – is a composite of five indicators, and Russia holds the top position in three of them – based on its good performance on public debt, and current account and net borrowing balances, compared with the other more established economies.

Russia performs badly on ecological development, being pushed to the bottom rank for the other two indicators because of its high carbon dioxide emissions and high energy use per unit of gross domestic product. However, this is largely outweighed by the strong fiscal record, the authors argue.

Brazil, another emerging economy, did even better than Russia, gaining third place because of its large agricultural sector, under-developed manufacturing industry and support for biofuels.

Sweden is the study’s top sustainability performer followed by Austria. China (ranked 13th) and India (16th) are both more sustainable than the US, according to the study.

Gabriela Steck, Russia specialist at Allianz Dresdner economic research unit, admitted Russia’s heavy dependence on oil meant its strong performance in the ranking was in itself not necessarily sustainable. «As soon as the oil price falls, then so will the country’s fiscal performance,» she said.

Michael Heise, Allianz Insurance and Dresdner Bank’s chief economist, said the findings were «a thought-provoking way of looking at the issue, although in Russia’s case it’s probably more appropriate to look at each indicator separately».

He said the European Union’s Lisbon Agenda to promote economic competitiveness used similar indicators to compare sustainability and other factors among countries within the bloc.

The study’s overall «business location» ranking – with indicators for economic performance, labour and research and development issues – has Sweden at top spot and Russia ranked 15th.

"The Financial Times"