Order Code IB92089
Issue Brief for Congress
Received through the CRS Web
Russia
Updated May 22, 2002
Stuart D. Goldman
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Post-Soviet Russia and Its Significance for the United States
Political Developments
Economic Developments
Economic Reform
Foreign Policy
Defense Policy
Fundamental Shakeup of the Military
Control of Nuclear Weapons
U.S. Policy
U.S.-Russian Relations
U.S. Assistance


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Russia
SUMMARY
Vladimir Putin, who was catapulted into
on many issues.
the Kremlin following Boris Yeltsin’s resigna-
tion, was elected President on March 26, 2000
The military is in turmoil after years of
by a solid majority that embraced his military
severe force reductions and budget cuts. The
campaign in Chechnya. Parties backing Putin
armed forces now number about one million,
did well in the December 1999 Duma election,
down from 4.3 million Soviet troops in 1986.
giving Putin a stable parliamentary majority as
Weapons procurement is down sharply.
well. Putin has moved to strengthen the
Readiness, training, morale, and discipline
central government vis-a-vis regional leaders,
have suffered. Following the war in Chechnya
to bring TV and radio under tighter state
and strained relations with the West over
control, and to modernize the armed forces.
Kosovo, Putin’s government increased de-
Federal forces have suppressed large-scale
fense spending sharply. There is conflict
military resistance in Chechnya, but face the
between the military and the government and
prospect of prolonged guerilla warfare. The
within the military over resource allocation,
economic upturn that began in 1999 is contin-
restructuring, and reform.
uing. The GDP and domestic investment are
growing after a decade-long decline, inflation
After the collapse of the Soviet Union,
is contained, the budget is balanced, and the
the United States sought a cooperative rela-
ruble is stable. Major problems remain: one
tionship with Moscow and supplied over $4
third of the population live below the official
billion in grant aid to encourage democracy,
poverty line, foreign investment is very low,
market reform, and strategic threat reduction
crime, corruption, capital flight, and unem-
in Russia. Early hopes for a close partnership
ployment remain high. Putin appears to seek
waned, in part because Russians grew disillu-
simultaneously to tighten political control,
sioned with perceived U.S. disregard for
introduce economic reforms, get major debt
Russian interests, while Washington grew
forgiveness, and strengthen the military.
impatient with Russia’s increasingly
adversarial stance on issues in which their
Russian foreign policy under Yeltsin had
interests clash. Direct U.S. foreign aid to
grown more assertive, fueled in part by frus-
Russia, under congressional pressure, fell over
tration over the gap between Russia’s self-
the past decade. Indirect U.S. assistance,
image as a world power and its greatly dimin-
however, through institutions such as the IMF,
ished capabilities. Russia’s drive to reassert
is very substantial. The United States has
dominance in and integration of the former
imposed economic sanctions on Russian
Soviet states is most successful with Belarus
organizations for exporting military technol-
and Armenia but arouses opposition in Geor-
ogy and equipment to Iran and Syria. There
gia, Ukraine, Uzbekistan, and Azerbaijan. The
are more restrictions on aid to Russia in the
CIS as an institution is failing. Washington
FY2002 foreign aid bill. In the spirit of
and Moscow continue to disagree over Rus-
cooperation after September 11, however, the
sian missile technology and nuclear reactor
two sides have agreed on a strategic nuclear
transfers to Iran, among others. After the
force reduction treaty and a strategic frame-
September 11 terror attacks, however, Russia
work for bilateral relations, due to be signed at
has adopted a much more cooperative attitude
the Bush-Putin summit, May 23-25, 2002.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On April 8, it was reported that the Bush Administration had decided not the certify that
Russia was fully cooperating with U.S. efforts to verify its compliance with agreements to
eliminate chemical and biological weapons. This could block or limit U.S. funding for a
number of major U.S.-Russian comprehensive threat reduction programs.

On April 15-16, U.S. and Russian officials announced substantial progress on trade
disputes involving Russian steel and U.S. poultry. Russia lifted its ban on U.S. poultry
imports, although licencing restrictions remain an obstacle. Russia’s Economic
Development and Trade Minister announced that Russia was terminating the 1999
agreement on steel with United States, adding that the U.S. had agreed to raise the quota for
Russian slab steel not covered by the anti-dumping limitations on steel imports imposed by
the Bush Administration in March.

On May 13, President Bush announced that agreement had been reached on a new
U.S.-Russian strategic arms reduction treaty, to be signed when he meets President Putin
at a summit meeting in Russia, May 23-25, 2002.

On May 15, NATO and Russian officials meeting in Iceland initialed the new “NATO
at 20" agreement, which will give Russia a limited role in NATO decision making on certain
issues. The agreement is to be formally signed and inaugurated in Rome on May 28.

BACKGROUND AND ANALYSIS
Post-Soviet Russia and
Its Significance for the United States
Russia was by far the largest of the former Soviet republics. Its population of 146
million (down from 149 million in 1991) is about half the old Soviet total. Its 6.6 million
square miles comprised 76.2% of the territory of the U.S.S.R. and it is nearly twice the size
of the United States, stretching across Eurasia to the Pacific, across 11 time zones. Russia
also has the lion’s share of the natural resources, industrial base, and military assets of the
former Soviet Union.
Russia is a multinational, multi-ethnic state with over 100 nationalities and a complex
federal structure inherited from the Soviet period. Within the Russian Federation are 21
republics (including Chechnya) and many other ethnic enclaves. Ethnic Russians,
comprising 80% of the population, are a dominant majority. The next largest nationality
groups are Tatars (3.8%), Ukrainians (3%), and Chuvash (1.2%). Furthermore, in most of
the republics and autonomous regions of the Russian Federation that are the national
homelands of ethnic minorities, the titular nationality constitutes a minority of the
population. Russians are a majority in many of these enclaves. Nevertheless, political
confrontations between the executive and legislative branches weakened the central
government, allowing many of the republics and regions to demand greater autonomy, and
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in some cases independence. Only the Chechen Republic, however, has tried to assert
complete independence. Some have seen this trend as a threat to the cohesion of the Russian
state. One of President Putin’s key policies is to reverse this trend and rebuild the strength
of the central government vis-a-vis the regions.
The Russian Constitution combines elements of the U.S., French, and German systems,
but with an even stronger presidency. Among its more distinctive features are the ease with
which the president can dissolve the parliament and call for new elections and the obstacles
preventing parliament from dismissing the government in a vote of no confidence. The
Constitution provides a four-year term for the president and no more than two consecutive
terms. The president, with parliament’s approval, appoints a premier who heads the
government. The president and premier appoint government ministers and other officials.
The premier and government are accountable to the president rather than the legislature.
The bicameral legislature is called the Federal Assembly. The Duma, the lower (and
more powerful) chamber, has 450 seats, half chosen from single-member constituencies and
half from national party lists, with proportional representation and a minimum 5% threshold
for party representation. The upper chamber, the Federation Council, has 178 seats, two
from each of the 89 regions and republics of the Russian Federation. Deputies presently are
the regional chief executive and the head of the regional legislature. Legislation approved
in July 2000, however, will transform this chamber, replacing the regional leaders with
Deputies appointed by them who will serve as full-time legislators. (See p. 4, below.) The
most recent parliamentary election was in December 1999.
The judiciary is the least developed of the three branches. Some of the Soviet-era
structure and personnel are still in place, but a major overhaul of the criminal code was
completed in late-2001. Trial by jury is being introduced and is to become the norm by 2003.
Federal judges, who serve lifetime terms, are appointed by the President and must be
approved by the Federation Council. The Constitutional Court rules on the legality and
constitutionality of governmental acts and on disputes between branches of government or
federative entities. The Supreme Court is the highest appellate body.
Russia is not as central to U.S. interests as was the Soviet Union. With the dissolution
of the U.S.S.R. and a diminished Russia taking uncertain steps toward democratization,
market reform and cooperation with the West, much of the Soviet military threat has
disappeared. Yet developments in Russia are still important to the United States. Russia
remains a nuclear superpower. It will play a major role in determining the national security
environment in Europe, the Middle East, and Asia. Russia could be cooperative, passive, or
disruptive. Russia is central to the future of strategic arms control, missile defense, and
dealing with nuclear proliferation and international terrorism. Such issues as the U.S. budget
deficit, the future of NATO, and the U.S. role in the world will all be affected by
developments in Russia. Also, although Russia’s economy is distressed, it is potentially an
important market and trading partner. Russia is the only country in the world with more
natural resources than the United States, including vast oil and gas reserves. It has a large,
well-educated labor force and a huge scientific establishment. And many of Russia’s needs
— food and food processing, oil and gas extraction, computers, communications, and
transportation — are in areas in which the United States is highly competitive.
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Political Developments
The ongoing political struggle in Russia has many aspects, including contests over
political ideology, the character of government, and the pace and character of economic
reform; institutional clashes between the executive and legislative branches and between the
central government and the regions; and personal rivalries among would-be leaders. The
political landscape is fluid, with parties and alliances forming, shifting, and dissolving.
Some argue that what appears on the surface to be “normal” competition among politicians
and parties of varying ideological hues masks a deeper underlying contest – an ongoing venal
competition among elites to seize ownership of vast, previously state-owned assets.
In 1999, Islamic radicals based in Russia’s break-away republic of Chechnya launched
armed incursions into neighboring Dagestan, vowing to drive the Russians out and build a
new Islamic state. A series of bombing attacks against apartment buildings in Moscow and
other Russian cities killed some 300 people. The new government of then-Premier Vladimir
Putin responded with a large-scale military campaign. Russian security forces may have seen
this as an opportunity to reverse their humiliating 1996 defeat in Chechnya. Russian forces
invaded and gradually occupied most of Chechnya. With Moscow keeping its (reported)
military casualties low and domestic media ignoring the suffering of the Chechen population,
the conflict enjoyed strong Russian public support, encouraging military and political leaders
to escalate the offensive, despite international criticism. After a grinding siege, Russian
forces took the Chechen capital in February 2000 and in the following months took the major
rebel strongholds in the mountains to the south. Russian forces are believed to have killed
tens of thousands of civilians and driven hundreds of thousands of Chechen refugees from
their homes. Many foreign governments and the UN and OSCE, while acknowledging
Russia’s right to combat separatist and terrorist threats on its territory, criticized Moscow’s
use of “disproportionate” and “indiscriminate” military force and the human cost to innocent
civilians. Although Moscow has suppressed large-scale Chechen military resistance, it faces
the prospect of prolonged guerilla warfare. Russia has lost over 10,000 troops in Chechnya
(1999-2001), comparable to total Soviet losses in Afghanistan (1979-1989). Russian
authorities deny there is a “humanitarian catastrophe” in the North Caucasus and strongly
reject foreign “interference” in Chechnya. In October 2001, Russian authorities announced
that they would meet with representatives of the Chechen rebels to discuss a political
settlement, but Moscow demanded disarmament and surrender and the talks led nowhere.
In the December 1999 Duma election, the two parties associated with then-Premier
Putin, Unity and the Union of Rightist Forces, fared very well. The Fatherland-All Russia
bloc, led by former Premier Yevgenni Primakov and Moscow Mayor Yuri Luzhkov, did not
do well, as had earlier been predicted. The Communist Party, which lost about one quarter
of the seats it previously held and most of its parliamentary allies, remains the largest faction
in the Duma, but no longer controls a majority. Vladimir Zhirinovsky’s right-wing Liberal
Democratic party and Grigory Yavlinsky’s democratic, pro-market, Yabloko Party both lost
over half the seats they previously held.
Twelve days later, President Yeltsin’s surprise New Year’s Eve resignation propelled
Putin into the Kremlin, advanced the presidential election date from June 4 to March 26 and
increased Putin’s already strong election prospects. (See CRS Report RS20525, Russian
Presidential Election, 2000
, March 24, 2000.)
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Putin’s meteoric rise in popularity was due to a number of factors: his tough policy
toward Chechnya; his image as a youthful, vigorous, and plain-talking leader; and massive
support from state-owned TV and other mass media. Putin’s political strength and popularity
reached such levels that three of his four chief rivals, Primakov, Luzhkov, and Lebed,
decided not to run in the presidential election. On March 26, Putin was elected president
with 52.5% of the vote in an 11-person field. His closest rival, Communist Party leader
Gennady Zyuganov, got just under 30%. All other candidates were in single digits.
Putin, who was a Soviet KGB foreign intelligence officer for 15 years and later headed
Russia’s Federal Security Service (domestic security), is, in contrast to Yeltsin, an intelligent,
disciplined statist. His priorities appear to be: strengthening the central government, reviving
the economy, integrating Russia into the global marketplace, and modernizing the military.
On the domestic political scene, Putin won several major victory over regional leaders,
reclaiming some authority for the central government that Yeltsin had allowed to slip away.
First, Putin created seven super-regional districts, each overseen by a presidential appointee.
Then he pushed legislation to change the composition of the Federation Council, the upper
chamber of parliament. That body was comprised of the heads of the regional governments
and regional legislatures of Russia’s regions, giving those leaders exclusive control of that
chamber and also parliamentary immunity from criminal prosecution. With Putin’s changes,
Federation Council Deputies will be appointed by the regional leaders and legislatures, but
once appointed, will be somewhat independent. A related bill gives the president the right
to remove popularly elected regional leaders who violate federal law. To partly compensate
the regional leaders, Putin created the State Council, a consultative body comprised of the
heads of Russia’s regions and republics.
The Putin regime has been steadily working to gain control of the broadcast media. A
key target was the media empire of Vladimir Gusinsky, which included Russia’s only
independent television network, NTV, which had been critical of Putin. Gusinski, one of the
so-called oligarchs who rose to economic and political prominence under Yeltsin, was
arrested in June 2000 on corruption charges. Many viewed this as an act of political
repression by the Putin regime. Gusinsky was released and allowed to leave the country, but
was rearrested in Spain on a Russian warrant and is being held there pending extradition to
Russia. NTV owed several hundred million dollars to the state-controlled gas monopoly,
Gazprom. In April 2001, Gazprom took over NTV and appointed Kremlin loyalists to run
it. A few days later, Gusinsky’s flagship newspaper, Segodnya, was shut down and the
editorial staff of his respected newsweekly, Itogi, was fired. The government then forced the
prominent oligarch Boris Berezovsky to give up ownership of his controlling share of the
ORT TV network. In January 2002, TV-6, the last significant independent Moscow TV
station, was shut down, the victim, many believe of government pressure. The government
also appears to be moving against the independent radio network, Echo Moskvuy.
Two other developments are seen by observers as signs of authoritarianism in the Putin
regime. A new law on political parties introduced by the government and explicitly aimed
at reducing the number of parties gives the government the authority to register, or deny
registration to, political parties. In his address to the nation in April 2001, Putin suggested
that the Duma be stripped of it power to debate or vote on specific components of the budget
and instead either approve or reject the government’s proposed budget as a whole.
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Economic Developments
Since the collapse of the Soviet Union, Russia has experienced widespread economic
dislocation and a drop of about 50% in GDP. Conditions worse than the Great Depression
of the 1930s in the United States have impoverished much of the population, some 25% of
which is living below the government’s official poverty or subsistence level. Russia is also
plagued by environmental degradation and ecological catastrophes of staggering proportions;
the near-collapse of the health system; sharp declines in life expectancy and the birth rate;
and widespread organized crime and corruption. The population has fallen by 4 million in
the past decade, despite net in-migration from other former Soviet republics. The following
table highlights economic performance through the decade.
Table 1. Russian Economic Performance Since 1992
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
GDP
Growth

-14.5%
-8.7%
-12.6%
-4.1%
-4.9%
0
-5.0%
3.2%
8.3%
5.5%
Rates
Inflation
2,525%
847%
223%
131
%
11%
84%
36%
20.2
15%
Rates
Sources: PlanEcon, Inc. and Center for Strategic and International Studies.
By the end of 1997, Russia’s steadily declining GDP seemed to have bottomed out,
inflation was under control, and the ruble was stable. In mid-1998, however, there was a
sharp economic crisis triggered by government revenue shortfalls and a pyramid-type
government borrowing scheme, worsened by the Asian financial crisis and falling world oil
prices. In August, the government suspended payment on its debts to commercial and
government creditors and devalued the ruble, which promptly lost two-thirds of its value,
while the Russian stock market lost 88% of its value. Many peoples’ savings were wiped
out. The emerging middle class was hard-hit. The number of Russians living below the
official poverty line increased 25%. Some analysts warned of the danger of a total economic
collapse. Russia’s 1998 grain harvest was the worst in 40 years, raising fear of famine.
These dire predictions, however, were wrong. In 1999, the economy began to recover.
Inflation was held to 36% and the ruble was stabilized at about 25-28 to the dollar.
Economic output increased and the GDP grew by 3.2%, its best performance of the decade,
due partly to the sharp increase in the price of imports and increased price competitiveness
of Russian exports caused by the 74% ruble devaluation in 1998. The surge in the world
price of oil and gas also buoyed the Russian economy. The economic upturn accelerated in
2000, led by a 7.6% increase in GDP, 20% inflation, and a budget surplus. Economic
performance remained strong in 2001. Economists disagree as to whether this is a turning
point marking the start of real economic recovery, or a cyclical up-tick that will not be
sustainable without further, politically costly, systemic reform.
In August 1999, the Paris Club of official government creditors provided a “framework
agreement” reducing Russian interest payments on its Soviet-era debt (of over $50 billion)
and deferring payment of principal until after 2001. In February 2000 Russia reached an
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agreement with the London Club of commercial creditors, writing off 36.5% of Russia’s
$32.8 billion Soviet-era commercial debt outright, with the remainder to be converted into
30-year eurobonds with lower interest rates and an 8-year grace period. This amounts to a
total of 52% debt forgiveness in current net value terms. “Comprehensive” Paris Club
negotiations have begun, to determine whether western government creditors will grant
Russia more large-scale debt forgiveness, or offer debt rescheduling without forgiveness.
Germany, which holds 48% of that debt, is calling for full repayment. Some of Moscow’s
critics contend that Russia’s recent economic upturn and its substantial increases in defense
spending should be taken into account by western governments considering further debt
forgiveness for Russia. The United states holds about 5% of Russia’s Paris Club debt, about
$3 billion. In December 2001, the Senate unanimously passed the Russian Federation Debt
Reduction for Nonproliferation Act of 2001 (S. 1803) sponsored by Sens. Biden and Lugar
and sent it to the House, where a companion bill (H.R. 3836) is being considered. These
bills would link U.S. debt forgiveness for Russia to Russian efforts at nonproliferation of
weapons of mass destruction. The Bush Administration is believed to be leaning toward
supporting Russia’s quest for debt forgiveness.
Economic Reform. In January 1992, Yeltsin launched a sweeping economic reform
program developed by Acting Premier Yegor Gaidar. The Yeltsin-Gaidar program wrought
fundamental changes in the economy. Although the reforms suffered many setbacks and
disappointments, most observers believe they carried Russia beyond the point of no return
as far as restoring the old Soviet economic system is concerned. The Russian government
removed controls on the vast majority of producer and consumer prices in 1992. Many
prices have reached world market levels. The government also launched a major program
of privatization of state property. By 1994, more than 70% of industry, representing 50% of
the workforce and over 62% of production, had been privatized, although workers and
managers owned 75% of these enterprises, most of which have not still been restructured to
compete in market conditions. Critics charged that enterprises were sold far below their true
value to “insiders” with political connections. Land privatization, backed by the Yeltsin
regime, was stalled by the strong collective farm lobby in the Duma. The Putin government
says that it favors marketization and land reform. Putin has declared reviving the economy
his top priority. His liberal economic reform team has formulated policies that have won G-7
and IMF approval. Skeptics charge that this may be more to impress western creditors than
to implement real economic reform. The test will be in its implementation.
Foreign Policy
In 1992 and early 1993, Yeltsin’s Russia gave the West more than would have seemed
possible even 2 or 3 years earlier under Gorbachev. Moscow cut off military aid to the
Communist regime in Afghanistan; ordered its combat troops out of Cuba; committed Russia
to a reform program and won IMF membership; signed the START II Treaty that would
eliminate all MIRVed ICBMs (the core of the Soviet Strategic Rocket Forces); and radically
reduced Russian force levels in many other categories. The national security policies of
Yeltsin and Foreign Minister Andrei Kozyrev came to be strongly criticized at home, not
only by hardline communists and ultranationalists but also by many centrists and prominent
democrats, who came to agree that the Yeltsin/Kozyrev foreign policy lacked a fundamental
sense of national interest and was too accommodating to the West — at Russia’s expense.
This criticism contributed to the erosion of Yeltsin’s support in the legislature. Since 1993,
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Russian foreign policy has become increasingly more assertive and nationalistic in many
areas, while maintaining cooperation with the West in others. This shift may have had a
number of causes: a) a policy adjustment to “responsible” criticism; b) an attempt to woo
some of the hardline nationalists’ supporters; c) a reaction to the success of nationalists and
communists in the 1993 and 1995 parliamentary elections; and d) resentment over the West’s
“inadequate” response to Russia’s earlier conciliatory approach, western “responsibility” for
Russia’s economic distress, and western indifference to Russian security concerns.
The victory of leftist and nationalist forces in the 1995 legislative elections pushed
Yeltsin to replace Kozyrev as Foreign Minister with Yevgenni Primakov, who was less
pro-Western but still pragmatic. Primakov opposed NATO enlargement, promoted
integrating former Soviet republics under Russian leadership, and favored closer links with
Islamic countries and with China. (See CRS Report 97-185, Russian-Chinese Cooperation:
Prospects and Implications
.) When Primakov became Premier in September 1998, he chose
Igor Ivanov to succeed him as Foreign Minister. Ivanov has kept that position.
Increasing nationalism in Moscow is tempered by a desire not to be isolated from the
West, especially in view of Russia’s need for western-led economic assistance and debt
relief. The Kosovo crisis and the NATO air strikes against Yugoslavia in 1999 posed a
serious dilemma for Moscow: how to oppose NATO’s military action without provoking a
confrontation with the U.S. and NATO Europe. The response was a combination of
vehement rhetoric and limited action. Moscow relied on vigorous diplomacy to help defuse
the conflict and demonstrate its status as a world power. During much of the conflict, Russia
opposed NATO’s terms for peace as too severe, but in the end Russia joined U.S., NATO,
and EU representatives in persuading Yugoslavia to accept a cease fire on NATO’s terms.
Moscow still opposes NATO enlargement in Central and Eastern Europe, but has
moderated its previously vehement objections. Russia appears reconciled to the likelihood
of further NATO enlargement. Several years ago, Moscow declared a “red line,” warning
that any attempt to bring former Soviet republics such as the Baltic states into NATO would
be an intolerable security threat leading to a rupture of relations with the alliance and strong
Russian counter measures. By mid-2001, however, Russian officials softened their rhetoric
even on the issue of Baltic accession to NATO. In December, NATO and Russian Foreign
Ministers announced their intention to create a NATO-Russia Council, on the principle of
“NATO at 20,” in which Russia and NATO members would participate as equals on certain
issues. This would replace the NATO-Russia Permanent Joint Council, a consultative body
that operated on the principle of “19 plus 1," i.e., NATO plus (and often versus) Russia,
which Moscow found unsatisfactory. On May 15, NATO and Russian officials meeting in
Iceland initialed the “NATO at 20" agreement, which is to be signed and inaugurated in
Rome on May 28.
Russia has toughened its policy (some see it as imperialism or expansionism) toward
neighboring former Soviet republics. A consensus emerged in Moscow that reestablishing
Russian dominance in this region is its highest foreign policy priority. A September 1995
Yeltsin decree outlining Russian policy toward other CIS countries set the goal of further
economic integration under Russian leadership, including a customs union and a payments
union. Russia has also striven for a CIS defense alliance and Russian military bases in the
territory of other CIS states. Another Russian goal is to get agreement to joint efforts to
secure the CIS’s “external borders.” The 1995 decree also said Russia would provide
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financial and other assistance to ethnic Russians in other CIS states, and warned of retaliation
if their rights are abused.
There has been little progress toward overall CIS integration. Russia and other CIS
states impose tariffs on each others’ goods in order to protect domestic suppliers and raise
revenue, in contravention of an economic integration treaty. Recent CIS summit meetings
have ended in failure, with many of the presidents sharply criticizing lack of progress on
common concerns and Russian attempts at domination. The CIC appears to be foundering.
On October 11, 2000, however, the presidents of Russia, Belarus, Armenia, Kazakhstan,
Kyrgyzstan, and Tajikistan upgraded their 1992 Collective Security Treaty, giving it more
operational substance and de jure Russian military dominance.
Russia and Belarus have taken real steps toward integration. Belarusan President
Aleksandr Lukashenko is widely believed to covet a leading role in a unified state. But he
unconstitutionally removed the parliamentary opposition in 1996 and strongly opposes
market reform in Belarus, making economic integration difficult and potentially very costly
for Russia. In April 1997, Yeltsin and Lukashenko signed documents calling for a “union”
between states that are to remain “independent and sovereign.” On May 23, 1997, they
signed a Union Charter. Lukashenko minimized his and his country’s political subordination
to Moscow. Yeltsin avoided onerous economic commitments to Belarus. Decision making
was to be on the basis of one-side- one-vote, valid only if approved by both sides. On
December 25, 1998, Yeltsin and Lukashenko signed an agreement to “unify” the two
countries. After protracted negotiations, the two presidents signed a treaty on December 8,
1999, committing Russia and Belarus to form a confederal state. Although Moscow and
Minsk continue to differ over the scope and terms of union, the general idea of reunification
appears to enjoy broad public support in both countries.
Russian forces remained in Moldova against the wishes of the Moldovan government
(and the signature of a bilateral troop withdrawal treaty in 1994), in effect bolstering a
neo-Communist, pro-Russian separatist regime in the Transdniester region of eastern
Moldova. Russian-Moldova relations warmed, however, after the election of a communist
pro-Russian government in Moldova in 2001. Russian forces intervened in Georgia’s
multi-faceted civil strife, finally backing the Shevardnadze Government in November 1993
— but only after it agreed to join the CIS and allow Russia military bases in Georgia. Russia
tacitly supports Abkhaz separatism in Georgia and is delaying implementation of a 1999
OSCE-brokered agreement to withdraw from military bases in Georgia. (See CRS Report
97-727, Georgia [Republic]: Current Developments and U.S. Interests, Nov. 14, 2000.)
Moscow has used the Armenian-Azerbaijani conflict over Nagorno-Karabakh to
pressure both sides and win Armenia as an ally. Citing instability and the threatened spread
of Islamic extremism on its southern flank as a threat to its security, Moscow intervened in
Tajikistan’s civil war in 1992-93 against Tajik rebels based across the border in Afghanistan.
At the OSCE summit in Istanbul, November 1999, Russia agreed to accelerate the
withdrawal of its forces from Moldova and Georgia, but has reneged on those commitments.
A major focus of Russian policy in Central Asia and the Caucasus has been to gain
more control of natural resources, especially oil and natural gas, in these areas. Russia seeks
a stake for its firms in key oil and gas projects in the region and puts pressure on its
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neighbors to use pipelines running through Russia. This became a contentious issue as U.S.
and other western oil firms entered the Caspian and Central Asian markets and sought
alternative pipeline routes. Russia’s policy of trying to exclude U.S. influence from the
region as much as possible, however, was dramatically reversed by President Putin after the
September 11. Russian cooperation with the deployment of U.S. military forces in
Uzbekistan, Tajikistan, and Tajikistan would have seemed unthinkable before September 11.
(For more on Russian policy in these regions, see CRS Issue Brief IB93108, Central Asia’s
New States: Political Developments and Implications for U.S. Interests
, and CRS Issue Brief
IB95024, Armenia, Azerbaijan, and Georgia: Political Developments and Implications for
U.S. Interests
.)
Of all the Soviet successor states, Ukraine is the most important for Russia. The
Crimean Peninsula has been especially contentious. Many Russians view it as historically
part of Russia, and say it was illegally “given” to Ukraine by Khrushchev in 1954. Crimea’s
population is 67% Russian and 26% Ukrainian. In April 1992, the Russian legislature
declared the 1954 transfer of Crimea illegal. Later that year Russian and Ukrainian
negotiators agreed that Crimea was “an integral part of Ukraine” but would have economic
autonomy and the right to enter into social, economic and cultural relations with other states.
In January 1994, Yuri Meshkov, an advocate of Crimean union with Russia, was elected
President of Crimea. Moscow and Kiev sought to avoid open conflict over Crimea.
Moscow distanced itself from Meshkov, allowing Kiev successfully to use economic and
political pressure against Crimean separatism. Throughout 1996, Yeltsin postponed visiting
Kiev to sign a friendship treaty, citing Kiev’s refusal to cede full control of Sevastopol naval
base in Crimea to Russia. Moscow also stalled on the division of the Black Sea Fleet. In
response, Ukraine pointedly increased its cooperation with NATO. Finally, in May 1997,
Yeltsin and Ukrainian President Leonid Kuchma signed a Treaty resolving the long dispute
over Sevastopol and the Black Sea Fleet and declaring that Russian-Ukrainian borders can
not be called into question. This agreement, widely viewed as a major victory for Ukrainian
diplomacy, was ratified in April 1999.
Moscow grudgingly treats the three Baltic states, which never joined the CIS, as
exceptions among the former Soviet states. Russian troops were withdrawn from Lithuania
in 1993 and from Estonia and Latvia in August 1994. In October 1997, Russia and Lithuania
signed a border delimitation treaty, Russia’s first such treaty with a former Soviet state.
However, Russia frequently and strongly states its objection to what it calls human rights
violations against the Russian-speaking population in Estonia and Latvia, particularly
concerning citizenship and language laws. In 1998, Moscow launched a sharp campaign
against Latvia, using propaganda, threats, and de facto economic sanctions to try to force a
change in Riga’s citizenship and language laws. Many believe that Russia fosters tension
with the Baltic states as a way of trying to block their accession to NATO.
Defense Policy
Fundamental Shakeup of the Military
The Russian armed forces and defense industries are in turmoil. Their previously
privileged position in the allocation of resources has been broken, as has their almost
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sacrosanct status in official ideology and propaganda. Hundreds of thousands of troops have
been withdrawn from Eastern Europe, the former Soviet Union, and the Third World.
Massive budget cuts and troop reductions forced hundreds of thousands of officers out of the
ranks into a depressed economy and probable unemployment. Present troop strength is about
1 million men. (The Soviet military in 1986 numbered 4.3 million.) Weapons procurement
is at historic lows. Readiness and morale are very low, and draft evasion and desertion are
widespread. (See CRS Report 97-820, Russian Conventional Armed Forces: On the Verge
of Collapse?
) In mid-1997, Yeltsin named General (later Marshal) Igor Sergeev, previously
Commander of the Strategic Rocket Forces, as Russia’s Defense Minister, declared military
reform a top priority, and signed a number of decrees to reorganize, consolidate, and further
downsize the armed forces.
But fundamental reform of the armed forces and the defense industries — which Russia
urgently needs if it is to solve its economic problems — is a very difficult, controversial, and
costly undertaking and was further set back by the economic and political crises of 1998-
1999. The Chechen conflict further delayed military reform. Putin, however, has pledged
to strengthen and modernize the armed forces, and appears determined to do so. At the same
time, he appears to be quite aware of Russia’s financial limitations. The decisions
announced in August and September 2000 to greatly reduce Russia’s strategic nuclear forces
(from 6,000 to 1,500 deployed warheads), to shift resources from strategic to conventional
forces, and to reduce military manpower by 350,000, from 1,200,000 (authorized) to
850,000, may be indications of a serious intent of effect military reform.
The conflicts in Kosovo and Chechnya, and the generally more hawkish, anti-western
atmosphere in Russia, led the government under Putin to make some other changes. A new
military doctrine and new national security and foreign policy “concepts” were adopted.
These documents retain the previous judgement that Russia’s main security threats are
internal rather than external, but assert that external military threats, particularly from
NATO, are growing, and call for greater military readiness and capability. This is the
context for the Putin government’s pledge to increase defense spending by 50%.
In March 2001, Putin made a series of changes in the military leadership that may
foreshadow major policy changes. Sergeev was replaced as Defense Minister by Sergei
Ivanov, a former KGB general very close to Putin, who had resigned his nominal intelligence
service/military rank and headed Putin’s Security Council as a civilian. Deputy Finance
Minister Lyubov Kudelina, a woman, was appointed Deputy Defense Minister in charge of
the defense budget. Putin explained that the man who had supervised the planning for
military reform (Ivanov) should be the man to implement reform as Defense Minister. He
also said these changes would increase civilian control of the military.
Despite its difficulties, the Russian military remains formidable in some respects and
is by far the largest in the region. Because of the deterioration of its conventional forces,
however, Russia relies increasingly on nuclear forces to maintain its status as a major
military power. Even Russia’s increased defense spending (up some 50% over last year, to
$5.16 billion in 2000) is far below the levels of support of the 1970s or 1980s. There is sharp
debate within the armed forces about priorities between conventional vs. strategic forces and
among operations, readiness, and procurement. Russia is trying to increase security
cooperation with the other CIS countries. Russia has military bases on the territory of all the
CIS states except Azerbaijan and is seeking to take over or at least share in responsibility for
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protecting the “outer borders” of the CIS. In the early 1990s, Russia, Armenia, Azerbaijan,
Belarus, Georgia, Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, and Uzbekistan signed
a collective security treaty and/or an agreement on creating a common “military-strategic
space.” Implementation of these agreements, however, has been limited, although in the
proposed Russia-Belarus union, President Lukashenko pointedly emphasizes the military
dimension. On the other hand, Georgia, Ukraine, and Azerbaijan are shifting their security
policies toward a more western, pro-NATO orientation.
Control of Nuclear Weapons
When the U.S.S.R. collapsed in 1991, over 80% of its strategic nuclear weapons were
in Russia. The remainder were deployed in Ukraine, Belarus, and Kazakhstan. Those three
states completed transfer of all nuclear weapons to Russia and ratified the Nuclear
Non-Proliferation Treaty as non-nuclear-weapon states by 1995-1996. All Soviet tactical
nuclear weapons, which had been more widely dispersed, reportedly were moved to Russia
by 1992 to be dismantled. The command and control system for strategic nuclear weapons
is believed to be tightly and centrally controlled, with the Russian President and defense
minister responsible for authorizing their use. The system of accounting and control of
nuclear (including weapons grade) material, however, is much more problematic, raising
widespread concerns about the danger of nuclear proliferation. There are growing concerns
about threats to Russian command and control of its strategic nuclear weapons resulting from
the degradation of its system of early warning radars and satellites. At the June 2000
Clinton-Putin summit, the two sides agreed to set up a permanent center in Moscow to share
near real-time information on missile launches. (See CRS Issue Brief IB98038, Nuclear
Weapons in Russia: Safety, Security, and Control Issues
.)
U.S. Policy
U.S.-Russian Relations
The spirit of U.S.-Russian “strategic partnership” of the early 1990s was replaced by
increasing tension and mutual recrimination in succeeding years. In the aftermath of the
September 11, 2001 attacks, however, the two nations have reshaped their relationship on
the basis of cooperation against terrorism.
Two continuing sources of bilateral tension remain Russia’s building nuclear reactors
in Iran and its role in missile technology transfers to Iran. Despite repeated pleas by
President Clinton and other U.S. officials, who believe Iran will use the civilian reactor
program as a cover for a covert nuclear weapons program, Russia has adamantly refused to
cancel the project. In 1997, Israeli and U.S. critics charged that Russian enterprises were
actively assisting Iran’s missile development program. The Clinton Administration and the
Congress made this a high-priority issue in bilateral relations. In January 1998, Russia
tightened export controls on missile technology. On June 9, 1998, Congress passed H.R.
2709 (Title I of which was the “Iran Missile Proliferation Sanctions Act”), that would have
imposed economic sanctions on foreign entities that contribute to Iran’s efforts to develop
ballistic missiles. The President vetoed this bill. Before the expected veto override attempt,
Moscow brought criminal charges against seven entities, alleging illegal exports to Iran. The
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Clinton Administration promptly imposed economic sanctions against them. Congress took
no further action on H.R. 2709. But in December 1998, press reports and Administration
statements asserted that some Russian entities continued to transfer missile technology to
Iran.
On January 10, 1999, the Clinton Administration announced economic sanctions against
three more Russian institutions. It further threatened to curtail contracts worth hundreds of
millions of dollars for Russian launch of U.S. commercial satellites. Moscow denies these
allegations and protests the sanctions. Dissatisfied with Russia’s response and Clinton
Administration actions, the House unanimously passed the Iran Nonproliferation Act (H.R.
1883) on September 14, which would require the president to impose economic sanctions
on any entity or government that contributed to Iran’s development of weapons of mass
destruction or of ballistic missiles. The bill also targets U.S. payments to the Russian Space
Agency, in connection with the international space station, worth over $500 million. On
February 22, 2000, the Senate unanimously passed the bill. President Clinton signed it into
law (P.L. 106-178) on March 14. On November 3, the Russian Foreign Ministry notified the
State Department that as of December 1, it would no longer consider itself bound by the 1995
Gore-Chernomyrdin agreement limiting Russian conventional arms sales to Iran. On January
16, 2001, the Russian Atomic Energy Ministry announced that it had begun construction of
a second nuclear reactor at Bushehr. (See CRS Report RL30551, Iran: Arms and
Technology Acquisitions
.)
Since late-1997, U.S. and Russian interests have clashed over Iraq. Russia has strongly
opposed military action against Iraq in connection with the UN inspection regime. Virtually
all segments of the Russian political spectrum protested vehemently against the U.S.-led
missile and air strikes against Iraq in December 1998. Russia has supported Iraq’s call for
an end to economic sanctions and limiting UN weapons inspections. It also wants to expand
economic relations with Iraq and secure repayment of $7 billion of loans owed from the
Soviet period. Since September 11, however, Moscow has moved away from blanket
support of Iraq. Some Russian officials have suggested that under certain circumstances,
U.S. military action against Iraq might not seriously strain U.S.-Russian relations.
There are sensitive security issues concerning the nexus of U.S. proposals for missile
defense, the ABM Treaty, and strategic arms reductions. The Bush Administration rejected
the Clinton Administration’s policies of seeking implementation of START II together with
modification of the ABM Treaty to allow limited national missile defense. (START II was
approved by the U.S. Senate in January 1996 and by the Russian Federal Assembly in April
2000, but instruments of ratification were never exchanged and the treaty was never
implemented. Agreements signed by Presidents Clinton and Yeltsin in September 1997 had
modified the treaty, requiring Senate approval of the new terms, which was not forthcoming.)
The new Bush Administration declared its disinterest in START II and the ABM Treaty and
its determination to pursue robust missile defense. This approach was met with resistance
from Moscow, but the Administration stuck to its policies and, despite skepticism from some
Members of Congress and many European allies, gradually won Russian acquiescence on
most elements of its program.
Moscow reacted very negatively to early Bush Administration assertions of its
determination to press ahead vigorously with a more robust missile defense program, but the
atmospherics, at least, changed markedly during the Bush-Putin summit in Slovenia on June
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16, 2001. Putin expressed willingness to consider some changes to the ABM Treaty – but
later made clear that he saw this in terms of theater missile defense for Europe, in which
Russia would expect to participate, a formulation not favored by the Bush Administration.
At the G-8 meeting in Genoa on July 22, Bush and Putin made the surprising announcement
that senior officials would begin consultations soon on the linked issues of missile defense
and strategic nuclear arms reductions. After their October 21 meeting at the APEC summit
in Shanghai, the two presidents announced that they had narrowed their differences on these
issues. In the run up to the November 2001 Bush-Putin summit, U.S. and Russian officials
hinted that a breakthrough agreement was near that would, inter alia, relax ABM Treaty
restrictions on missile defense testing while preserving the ABM Treaty and also sharply
reduce strategic nuclear forces on both sides. The November 13-16 summit in Washington
and Texas, however, did not result in the expected package deal. Although both sides said
they would reduce their strategic offensive nuclear forces by some two-thirds, the Americans
resisted Russian’s desire to codify this in binding treaty form. They also disagreed on missile
defense tests and the ABM Treaty. Discussions at the foreign minister level in December
reportedly narrowed the differences on strategic force reductions, but full agreement was not
reached. On December 13 the Bush Administration gave Moscow official notification of its
intention to renounce the ABM Treaty within six months. U.S. press reports, citing
Administration sources, say that Russian leaders were privately informed of the U.S. decision
some days earlier. Russia’s official response has been cool but restrained, calling the U.S.
decision a mistake, but saying that it would not cause a major disruption in the bilateral
relationship. Similarly, in January 2002, Moscow reacted negatively to the Bush
Administration’s proposed plans to put in storage many of the nuclear warheads it plans to
withdraw from deployment, rather than destroy them. Again, however, Russian criticism
was relatively restrained, while the two sides continue intensive negotiations. The
negotiations bore fruit in mid-May, when final agreement was announced. Moscow won
U.S. agreement to make the accord a treaty requiring legislative approval. The terms of the
treaty, however, reportedly achieve virtually all the Administration’s key goals: Deployed
strategic nuclear warheads are to be reduced to 1,700-2,200 by 2012, with no interim
timetable, no limits on the mix or types of weapons, and no requirement for destroying rather
than storing warheads. This treaty is expected to be signed by the two presidents at their
summit meeting in Russia, May 23-26.
Moscow and Washington are cooperating on some issues of nuclear weapons reduction
and security. Since 1992, the United States has spent over $3 billion in Cooperative Threat
Reduction program (CTR or “Nunn-Lugar”) funds to help Russia dismantle nuclear weapons
and ensure the security of its nuclear weapons, weapons grade nuclear material, and other
weapons of mass destruction. During the September 1998 summit, both countries agreed
to share information when either detects a ballistic missile launch anywhere in the world, and
to reduce each country’s stockpile of weapons-grade plutonium by fifty metric tons. In June
1999, U.S. and Russian officials extended the CTR program for another seven years. The
two sides also agreed to each dispose of an additional 34 tons of weapons-grade plutonium,
with the U.S. to seek international funding to help finance the $1.7 billion Russian effort.
The planned U.S.-Russian joint missile early warning information center in Moscow,
however, has yet to be established. In April 2002, the Bush Administration decided not to
certify that Russia was fully cooperating with U.S. efforts to verify its compliance with
agreements to eliminate chemical and biological weapons. This could block or limit U.S.
funding for a number of major U.S.-Russian comprehensive threat reduction programs.
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President Putin denounced the September 11 terror attacks in New York and
Washington in very strong terms, comparing them to Nazi atrocities. Some saw this as
preparing the Russian public for cooperation with the United States. Indeed, he has moved
toward fundamentally reshaping U.S.-Russian relations on a more cooperative basis. Russia
has facilitated U.S. military force deployments to bases in Uzbekistan, Tajikistan, and
Kyrgyzistan, an unprecedented development that required not only Russia’s approval but its
active support. Russia is also sharing intelligence about Afghanistan with the United States,
has sent arms, including tanks and other heavy weapons, to the anti-Taliban opposition
forces, and reportedly provided them with direct military assistance on the ground. Further
Russian cooperation could become highly desirable, depending on what options the United
States chooses in its anti-terrorism campaign. The interplay of what Washington might want
from Moscow and what Moscow might seek in return could involve some very high-stakes
tradeoffs. In the short run, the Bush Administration has said it would work with Congress
to eliminate the Jackson-Vanic restrictions on trade with Russia, to facilitate increased U.S.
trade and investment in Russia, and to support Russia’s efforts to win debt relief from the
Paris Club of creditors.
U.S. Assistance
(The following discussion draws heavily from CRS Issue Brief IB95077, The Former
Soviet Union and U.S. Foreign Assistance.) From FY1992 through FY1997, the U.S.
government obligated $4.5 billion in grant assistance to Russia, including $2.1 billion in
Freedom Support Act aid for democratization and market reform and $857 million for
Cooperative Threat Reduction (Nunn-Lugar assistance). But Russia’s share of the
(shrinking) NIS foreign aid account fell from about 60% in FY1993-FY1994 to 17% in
FY1998 and has been at or below 20% since then. The Administration allocated $179
million to Russia from FY2000 appropriations, $61million of which is for the Extended
Threat Reduction program, and it has requested a level of $162 million for Russia programs
in FY2001.
Both the FREEDOM Support Act and annual foreign operations appropriations bills
contain conditions that Russia is expected to meet in order to receive assistance. A
restriction on aid to Russia was approved in the FY1998 appropriations and each year
thereafter, prohibiting any aid to the government of the Russian Federation (i.e., central
government; it does not affect local and regional governments) if the President does not
certify that Russia has not implemented a law discriminating against religious minorities. The
President has made such determinations, most recently on May 26, 2000.
In addition to the conditions related to Russian nuclear reactor and ballistic missile
technology transfers to Iran, discussed above, Members of Congress proposed a number of
other conditions, which were debated during the 106th Congress (H.R. 4811) or Senate (S.
2522). These bills would have:
! required a reduction in assistance to Russia by an amount equal to any loan
or other financial assistance or energy sales provided to Serbia, required
U.S. opposition to international financial institution loans, and suspended
Export-Import and OPIC loans or guarantees. Authored by Senator Helms
in response to Russia’s hosting of the Yugoslav Defense Minister, an
indicted war criminal, and its provision of a loan to Serbia, it was adopted
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as an amendment to S. 2522, after being modified with a presidential waiver
authority.
! expressed the sense of the Senate that the United States should oppose
international financial institution loans to Russia if it delivered additional
SS-N-22 Moskit anti-ship missiles to China. This amendment by Smith
(NH) was added to S. 2522 during floor debate. H.R. 4022 (Rohrabacher),
prohibiting rescheduling or forgiveness of bilateral debt until Russia has
terminated sales of the missiles was approved by the House International
Relations Committee on April 13, 2000 with a presidential waiver authority
provision.
! prohibited the rescheduling or forgiveness of any bilateral debt owed to the
United States by Russia until the President certifies that Russia has ceased
operations and closed its intelligence facility at Lourdes, Cuba. H.R. 4118
(Ros-Lehtinen) was approved by the House (275-146) on July 19, 2000. The
International Relations Committee added presidential waiver authority that
would permit the rescheduling of debt, but the bill did not provide a waiver
for debt forgiveness. Further, the bill still would have required U.S.
opposition to rescheduling and forgiveness at the Paris Club, possibly
making the rescheduling waiver meaningless. In the Senate, a similar piece
of legislation was introduced (S. 2748, Mack) on June 16, 2000. (See CRS
Report RL30628.)
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