FACTBOX-Key political risks to watch in Russia

MOSCOW Aug 2 (Reuters) - Russia is one of the world's most lucrative emerging markets but the risks are big.

Oil sales are the foundation of Russian stability. The plans of Prime Minister Vladimir Putin, the country's paramount leader, also remain central to Russia's future.

Otherwise, the biggest risks remain corruption and the arbitrary rule of law.

OIL

Russia is the world's biggest energy producer and remains heavily reliant on oil and gas exports, which make up 65 percent of exports despite Kremlin calls to diversify the economy.

A sharp and sustained fall in oil prices would lead to a sell-off in the equity, bond and currency markets, undermine the economic recovery and erode Putin's popularity before the March 2012 presidential election.

Major investment banks expect this year's Gross Domestic Product (GDP) to grow by more than the official 4.0 percent forecast after the economy shrank by 7.9 percent in 2009, the worst annual GDP result in 15 years.

While Russia's 2010 growth forecasts look impressive when compared to developed markets such as the European Union, they are less rosy when compared to China and India which are expected to grow by about 10 and 8.5 percent respectively.