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Monday, October 1, 2012

Russian Political, Economic, and Security Issues and U.S. Interests

Jim Nichol, Coordinator
Specialist in Russian and Eurasian Affairs

Russia made some uneven progress in democratization during the 1990s, but this limited progress was reversed after Vladimir Putin rose to power in 1999-2000, according to many observers. During this period, the State Duma (lower legislative chamber) came to be dominated by government-approved parties, gubernatorial elections were abolished, and the government consolidated ownership or control over major media and industries, including the energy sector. The Putin government showed a low regard for the rule of law and human rights in suppressing insurgency in the North Caucasus, according to critics. Dmitriy Medvedev, Putin’s long-time protégé, was elected president in early 2008 and immediately designated Putin as prime minister. President Medvedev continued Putin’s policies. In August 2008, the Medvedev-Putin “tandem” directed military operations against Georgia and recognized the independence of Georgia’s separatist South Ossetia and Abkhazia, actions condemned by most of the international community. In late 2011, Putin announced that he would return to the presidency and that Medvedev would become prime minister. This announcement and flawed Duma elections at the end of the year spurred popular protests, which the government addressed by launching some reforms (such as the return of gubernatorial elections) and by holding pro-Putin rallies. In March 2012, Putin was (re-)elected president by a wide margin. The day after his inauguration on May 7, the legislature confirmed Medvedev as prime minister. Since then, the Putin administration appears to be tightening restrictions on freedom of assembly and other human rights.

Russia’s economy began to recover from the Soviet collapse in 1999, led mainly by oil and gas exports, but the decline in oil and gas prices and other aspects of the global economic downturn beginning in 2008 contributed to an 8% drop in gross domestic product in 2009. Since then, rising world oil prices have bolstered the economy. Russian economic growth continues to be dependent on oil and gas exports. The economy also is plagued by an unreformed healthcare system and unhealthy lifestyles; low domestic and foreign investment; and high rates of crime, corruption, capital flight, and unemployment.

Russia’s armed forces now number less than one million, down from 4.3 million Soviet troops in 1986. Troop readiness, training, morale, and discipline have suffered, and much of the arms industry has become antiquated. Russia’s economic growth during most of the 2000s allowed it to increase defense spending to begin to address these problems. Stepped-up efforts have been launched to restructure the armed forces to improve their quality. Opposition among some in the armed forces, mismanagement, and corruption have seemingly slowed this restructuring.

After the Soviet Union’s collapse, the United States sought a cooperative relationship with Moscow and supplied almost $19 billion in aid for Russia from FY1992 through FY2010 to encourage democracy and market reforms and in particular to prevent the proliferation of weapons of mass destruction (WMD). In the past, U.S.-Russia tensions on issues such as NATO enlargement and proposed U.S. missile defenses in Eastern Europe were accompanied by some cooperation between the two countries on anti-terrorism and non-proliferation. Russia’s 2008 conflict with Georgia, however, threatened such cooperation. The Obama Administration has worked to “re-set” relations with Russia. The Administration has hailed the signing of a new Strategic Arms Reduction Treaty in April 2010, the approval of new sanctions against Iran by Russia and other members of the U.N. Security Council in June 2010, the accession of Russia to the World Trade Organization on August 22, 2012, and the cooperation of Russia in Afghanistan as signifying the “re-set” of bilateral relations. Congress is considering legislation(H.R. 6156 and S. 3406) to grant Russia Permanent Normal Trade Relations (PNTR) status.

Date of Report: September 19, 2012
Number of Pages: 82
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