MOSCOW"With summer solstice approaching and twilight lingering until an hour before midnight, nothing, not even cool temperatures and a brisk breeze, can keep young Muscovites from parading in and around Red Square. For the more fashion conscious young women, short skirts, Calvin Klein jeans atop three-inch heels and bare midriffs are de rigueur. Signposts of Russia's new prosperity are everywhere. Late model cars from Toyota, Ford and Hyundai choke the streets. The gothic stone buildings along the boulevards feeding into the city center have been turned over to branches of European stores selling designer fashions, Gucci purses and expensive jewelry. An ornate, former government office building adjoining the square better known in the West for the rumble of tanks and truck-borne missiles has been converted into a spectacular enclosed shopping mall, its indoor "outdoor cafes" an ideal resting place for shoppers during Russia's dark, frigid winters. What's behind it all? Oil, as longtime Russia scholar Marshall Goldman points out in his new book, Petrostate: Putin, Power, and the New Russia. As the global oil price has surged over $125 a barrel , no country has benefited more than Russia, one of the world's top exporters. Oil production surged to 481 million metric tons in 2006, up 60 percent from a decade earlier. And every bit of that increase was available for export because domestic consumption actually fell slightly over the period. How could that be, given what seems like an economic boom is underway? First, the Russian population continues to fall, dropping by nearly three quarters of a million persons every year (more on that in a moment). And, unlike India and China, its giant neighbors to the south and southeast, respectively, Russia has done almost nothing to forge a place for itself in the global economy other than as a natural resource exporter. It takes a lot of cars to replace the demand of one shuttered Soviet-era factory. Goldman's point is that oil suffuses every aspect of Russian life. And that includes Russia's politics. The newly elected (or was that selected?) president, Dmitry Medvedev, a longtime friend and protégé of Vladimir Putin, was previously chairman of the board of Gazprom, the former state-run enterprise that is now the world's second-largest oil company. Given the capital's relative prosperity (below the glittering surface, however, there is still a second-world grittiness), what could account for the fact that the Russian Federation's population is falling? One could blame the women. The birthrate here has fallen sharply since the fall of Soviet Communism and is now near the levels of Italy and Japan, countries that are seeing their own populations shrink. But more significantly, the life expectancy for men has only slightly recovered from its precipitous plunge in the wake of the collapse of the Soviet Union. The reasons are not complex: Russia still suffers from rampant alcoholism and drug abuse, especially among those without a stable place in the economy. The traditional diet is still laden with fatty meats and is noticeably lacking in green vegetables. There are few trendy restaurants or sushi shops in the new shopping malls. Smoking rates (this is based strictly on observation) appear to be very high, even though Russian office workers, like their American counterparts, must now sneak outside to smoke. As a result, heart disease is still Russia's number-one killer, just as it is in the U.S. But in Tomsk Oblast in western Siberia, for instance, where I will be going tomorrow to report on a successful effort to curb the tuberculosis epidemic, the number of deaths each year from cardiovascular causes was double the number from cancer. In the U.S., by comparison, the two rates are about equal. This also remains a society where a premature violent death may be lurking around the corner. There has been a mini boom in auto accident fatalities. With alcohol consumption high and more and more people driving, that one isn't hard to figure out. There is also still an extremely high homicide rate, largely among poor and working class young men. The result is that life expectancy, for men at least, still hovers between 58 and 59 despite the economic recovery of recent years. Russian men who live to be 65 have the same life expectancy as men in other western countries, Goldman observes. Their problem is getting to retirement age. Perhaps that was one of the issues on the mind of an orator, probably in his late 50s , who stood just outside the Kremlin Wall in front of the statue of Marshall Georgy Zhukov, the general who led the Soviet's resistance to Hitler's invading army during World War II. Red Square as Hyde Park? Russia has indeed changed since my last visit here in 1992. The speaker quickly drew an audience of a few hundred mostly young onlookers, including a couple of cops who stood by impassively. "What has democracy brought Russia?" he cried, his arms extended like one of the statues of Lenin that no longer surround the square. "We were a great country once." The crowd clapped politely and moved on. There were still a few hours left before the stores closed.