* Will Russia regain its BRIC lustre?
* Investors optimistic but worries on bad loans remain
* Two dozen top execs, officials to speak at Reuters Summit
By Michael Stott
MOSCOW, Sept 10 (Reuters) - Can Russia regain its coveted status as one of the world's biggest, fastest-growing emerging markets or will it languish as a once-promising also-ran ?
The global economic crisis hit Russia far harder than its BRIC peers because it depended heavily on exports of energy and metals and its private sector was over-reliant on foreign loans.
While China, India and Brazil are still growing, albeit more slowly, Moscow expects GDP to fall by 8.5 percent this year. The severity of that downturn has even led some economists to suggest Moscow be stripped of its BRIC status.
Russian officials naturally reject such views but concede that the crisis has shone a harsh light on the country's failure to diversify away from natural resources and to invest in renewing its creaking, Soviet-era infrastructure.
"Russia has offered a developed market reaction to the crisis with developing market levels of risk," said Roland Nash, head of research at Renaissance Capital. "So you got the worst of both worlds."
Like other Russia-watchers, Nash is now bullish about the future, believing the country has been oversold and that current prices don't accurately reflect the real level of risk.
Anticipating a steady global recovery, investors have rushed back into the Russian stock market this year, buying mainly energy and metals stocks and propelling the leading indices up by around 70 percent.
Shares in top lender Sberbank have rocketed 157 percent this year in a vote of confidence in Russia's revival. But the country still trades at a big discount to its main BRIC rivals.
Have investors positioned themselves correctly for the upturn or will they live to regret their renewed faith in the Russian and global rebound? Has Russia learned policy lessons from the crisis or will it be back to "business as usual"?
Around two dozen top policymakers, bankers and executives will discuss these and other issues at the Third Reuters Russia Investment Summit from Sept. 14-16 in a series of exclusive interviews.
"If optimism about a sustained recovery in the world economy continues to grow, then so too will Russian equity valuations," said Uralsib chief strategist Chris Weafer in a briefing note.
"Meanwhile, through the coming autumn period, equities face a tougher international and domestic environment."
High on investors' list of worries is the size of Russia's budget deficit for next year, a projected 6.8 percent of GDP.
Although most major nations have been spending heavily to reflate their economies, analysts have criticised Russia for not targeting state cash efficiently to support business.
"One should not expect much from Russia's anti-crisis package" said Moscow brokerage Troika Dialog in a recent report.
"It is bulky and inefficient, which is not surprising considering that the country ranks somewhere near the bottom of Transparency International's list of the most efficient and least corrupt countries."
Troika frets that excessive government spending may hurt the rouble.
So far, the Russian currency has held steady in its government-set exchange rate corridor after a gradual devaluation at the end of 2008 and inflation has eased, allowing the central bank to cut rates by 225 basis points since April.
Optimists see other reasons for hope.
Predictions by Russia's marginalised liberal opposition that the crisis would trigger a wave of street protest leading to the collapse of the government have not materialised. Even in the country's one-company towns, demonstrations have been scarce.
Higher-than-expected world oil prices have allowed the government to trim the size of next year's deficit and predict that by 2012 Russia's economy will return to pre-crisis size.
The Finance Ministry, whose long-serving leader Alexei Kudrin will be among this year's summit guests, has pencilled in a prediction of $57 oil this year and $58 next year, compared with a current market price for Russia's Urals blend of $69.
But plenty could still go wrong.
Apart from the economic storm clouds still on the horizon, politics may yet intrude.
Russia's unusual "tandem" system of government has so far survived the crisis, largely because most observers say Prime Minister Vladimir Putin continues to pull most of the strings.
As President Dmitry Medvedev nears the mid-point of his four-year term next May, however, pressure will grow on both men to make clear whether Putin will run again for the top Kremlin job or step aside to leave the stage to his hand-picked successor.
And in spite of Medvedev's frequent public pronouncements about restoring the rule of law in Russia and fighting corruption, businessmen and investors see little progress on either front. (Editing by Simon Jessop)