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 according to many observers, this limited progress was reversed after Vladimir Putin rose to power in 1999-2000. During this period, the State Duma (lower legislative chamber) came to be dominated by government-approved parties and opposition democratic parties were excluded. Putin also abolished gubernatorial elections and established government ownership or control over major media and industries, including the energy sector. The methods used by the Putin government to suppress insurgency in the North Caucasus demonstrated a low regard for the rule of law and human rights, according to critics. Dmitriy Medvedev, Vladimir Putin’s chosen successor and long-time protégé, was elected president in March 2008 and immediately designated Putin as prime minister. President Medvedev continued Putin’s policies. In August 2008, the Medvedev- Putin “tandem” directed wide-scale military operations against Georgia and unilaterally recognized the independence of Georgia’s separatist South Ossetia and Abkhazia, actions denounced by most of the international community. In late September 2011, Putin announced that he would run in the upcoming March 2012 presidential election, and that Medvedev would then become prime minister. The two leaders claimed that they had agreed to consider this possible shift in roles in late 2007 when the two decided on their present arrangement.

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. In 2010-2011, rising world oil prices have bolstered the economy. Russia continues to be challenged by an economy highly dependent on the production of oil, gas, and other natural resources. It is also 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 military has been in turmoil after years of severe force reductions and budget cuts. The armed forces now number less than 1.0 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 were launched in late 2007 to restructure the armed forces to improve their quality. Russia’s 2008-2009 economic downturn, opposition among some in the armed forces, mismanagement, and corruption have appeared to slow force modernization efforts.

After the Soviet Union’s collapse, the United States sought a cooperative relationship with Moscow and supplied over $18 billion in aid for Russia from FY1992-FY2011 to encourage democracy and market reforms and in particular to prevent the proliferation of weapons of mass destruction (WMD). U.S. aid to reduce the threat posed by WMD proliferation has hovered around $700 million-$900 million per fiscal year, while other foreign aid to Russia has dwindled. In past years, 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, and cooperation in Afghanistan as signifying the “re-set” of bilateral relations.


Date of Report: November 4, 2011
Number of Pages: 69
Order Number: RL33407
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