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

Publication Date: October 2008

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

Type:

Coverage: Russia (Federation)

Abstract:

Vladimir Putin won reelection as President in March 2004 in an exercise in "managed democracy" in which he took 71% of the vote and faced no serious competition. The pro-Putin Unified Russia party similarly swept the parliamentary election in December 2003 and controls more than two-thirds of the seats in the Duma. Putin's twin priorities remain to revive the economy and strengthen the state. He has brought TV and radio under tight state control and virtually eliminated effective political opposition. Federal forces have suppressed large-scale military resistance in Chechnya and in 2006 succeeded in killing most of the remaining top Chechen rebel military and political leaders.

The economic upturn that began in 1999 is continuing. The GDP and domestic investment are growing impressively after a long decline, fueled in large part by profits from oil and gas exports. Inflation is contained, the budget is balanced, and the ruble is stable. Major problems remain: 18% of the population live below the poverty line, foreign investment is low, and crime, corruption, capital flight, and unemployment remain high.

Russian foreign policy has grown more self-confident and assertive, fueled by its perceived status as an "energy superpower." Russia's drive to reassert dominance in and integration of the former Soviet states is most successful with Belarus and Armenia but arouses opposition in Georgia, Ukraine, Azerbaijan, and Moldova. The Commonwealth of Independent States as an institution is failing. After years of sharp U.S.-Russian disagreement over Russian support for Iran's nuclear program, Washington and Moscow appear to have found some common ground on the Iranian as well as the North Korean nuclear concerns.

The military has been in turmoil after years of severe force reductions and budget cuts. The armed forces now number about 1.2 million, down from 4.3 million Soviet troops in 1986. Readiness, training, morale, and discipline have suffered. Major weapons procurement, which virtually stopped in the 1990s, has begun to pick up as petrodollars flow into Moscow and defense spending increases.

After the Soviet Union's collapse, the United States sought a cooperative relationship with Moscow and supplied over $14 billion to encourage democracy and market reform, for humanitarian aid, and for WMD threat reduction in Russia. Direct U.S. foreign aid to Russia under the Freedom Support Act fell in the past decade, due in part to congressional pressure. U.S. aid in the form of WMD threat reduction programs, and indirect U.S. aid through institutions such as the IMF, however, was substantial. The United States has imposed economic sanctions on the Russian government and on Russian organizations for exporting nuclear and military technology and equipment to Iran and Syria. Restrictions on aid to Russia are in the FY2006 foreign aid bill. This CRS report will be updated regularly.