Country Report: Russia Key Recent

Country Report: Russia

Key Recent Developments in Russia

In the initial years after the break-up of the Soviet Union in 1991, President Boris Yeltsin faced vigorous opposition by the communist old guard in the government. Although Yeltsin managed to suppress communist opposition by adopting a new Russian constitution and consolidating his political power, Russia's transition to a market economy was extremely painful. Following a major economic collapse in 1998, continuing economic problems and poor personal health, Yeltsin resigned on December 31, 1999 and appointed Vladimir Putin as his successor.

Since that time, Putin has secured his political position and gained popularity among the common Russians by adopting a hard line against the Chechen insurgents. He has been helped in his policies by the worldwide backlash against terrorism following the 9/11 attacks and the unprecedented spike in oil prices that has boosted Russia's economy.

The Putin administration has also embarked on an increasingly authoritarian path by concentrating more powers in the Presidency and regaining state control over independent TV stations. The recent crack down against the Yukus Oil Company and its CEO Mikhail Khodorkovsky, a leading political opponent of Putin, further underlines the trend. ("Politics: Recent Political Events," 2004)

The Main Challenges or Problems

The main challenges facing Putin are consolidation of the economy and controlling the separatist tendencies in breakaway regions such as Chechnya. The Russian economy, although temporarily boosted by the extremely high oil prices, continues to be a major source of worry. It is heavily dependent on oil and gas revenues and Russia has been unable to follow the example of China in transforming a command economy to an effective market economy after the collapse of Communism. Pervasive corruption in the government, very high criminal activity ranging from petty street crime to mafia controlled criminal rings, a weak judicial and banking system that has failed to protect consumers and businesses alike, have combined to undermine faith in the prevalent economic system among the Russian public. This lack of faith is reflected in the alarming declining trend in the country's population which could fall to135 million by 2020 from its current level of approximately 146 million, if the present trends continue. The security issue in Russia is another major problem, highlighted by the downing of two passenger planes and the massacre of 300 people in a school in Beslan last summer. ("Russia at a Glance," 2005)

Key Regional Issues

The most serious regional issue faced by the Russian government is the separatist movement in Chechnya, which is far from over. The human rights organizations have accused both sides (the Russian government forces as well as the rebels) of massive human right violations in the war. Several high-profile terrorist attacks by the Chechens in 2004 including the assassination of the republic's Kremlin-backed leader, Aslan Kadyrov, exemplify the seriousness of the problem. According to recent estimates, about 3,400 rebels are scattered throughout Chechnya and particularly the area around the border with Georgia. Russia has accused Georgia of allowing Chechen rebels to move freely and providing safe haven to them for launching terrorist attacks from across the border.

Relations with Neighboring Countries

The Commonwealth of Independent States (CIS) was formed by 12 of the 15 former Soviet Republics after the collapse of the Soviet Union in 1991 to preserve some of the political and economic ties. Russia's relations with the CIS countries have, however, been dogged by mutual distrust. Sources of tension between Russia and CIS members include the issue of claim over military assets belonging to the Soviet Union and the status of Russians settled in the former Soviet republics. Most of the disputes about assets have now been settled but such disputes have left a bad taste in the mouth and the initial optimism about the CIS becoming even a loose confederation has not been realized. ("Russia: Foreign Relations," 2005)

Russia's relations with the neighboring Ukraine were particularly strained due to their dispute about the vital Black Sea Fleet and military installations on the Crimean peninsula. Kremlin's ham-handed but unsuccessful interference in a fraudulent November 2004 presidential election in Ukraine has been a serious setback for Russia. The setback is likely to have a corrosive effect on its influence in other former Soviet Republics as the failure reflects Kremlin's weakness, encouraging its neighbors to take a more independent line and seek closer ties with other more powerful countries. On the other hand, Russia's relations with its other neighbors such as China, Korea and Japan have generally improved since the collapse of the Soviet Union.