Order Code IB92089
CRS Issue Brief for Congress
Received through the CRS Web
Russia
Updated August 20, 2003
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, catapulted into the
ber 11, however, Russia adopted a much more
Kremlin by Boris Yeltsin’s resignation, was
cooperative attitude on many issues.
elected President on March 26, 2000 by a
solid majority that embraced his military
The military is in turmoil after years of
campaign in Chechnya. Parties backing Putin
severe force reductions and budget cuts. The
did well in the December 1999 Duma election,
armed forces now number about one million,
giving Putin a stable parliamentary majority as
down from 4.3 million Soviet troops in 1986.
well. Putin’s top priority is to revive the
Weapons procurement is down sharply.
economy and integrate Russia into the global
Readiness, training, morale, and discipline
marketplace. He has also strengthened the
have suffered. Putin’s government has increa-
central government vis-a-vis the regions and
sed defense spending sharply but there is
brought TV and radio under tighter state
conflict between the military and the
control. Federal forces have suppressed large-
government and within the military over
scale military resistance in Chechnya but face
resource allocation, restructuring, and reform.
the prospect of prolonged guerilla warfare.
After the collapse of the Soviet Union,
The economic upturn that began in 1999
the United States sought a cooperative rela-
is continuing. The GDP and domestic invest-
tionship with Moscow and supplied over $4
ment are growing after a decade-long decline,
billion in grant aid to encourage democracy,
inflation is contained, the budget is balanced,
market reform, and WMD threat reduction in
and the ruble is stable. Major problems re-
Russia. Early hopes for a close partnership
main: one fourth of the population live below
waned, in part because Russians grew disillu-
the official poverty line, foreign investment is
sioned with perceived U.S. disregard for
very low, crime, corruption, capital flight, and
Russian interests, while Washington grew
unemployment remain high. Putin appears to
impatient with Russia’s increasingly
seek simultaneously to tighten political con-
adversarial stance on issues in which their
trol and introduce economic reforms.
interests clash. Direct U.S. foreign aid to
Russia, under congressional pressure, fell over
Russian foreign policy in the late 1990s
the past decade. Indirect U.S. assistance,
had grown more assertive, fueled in part by
however, through institutions such as the IMF,
frustration over the gap between Russia’s self-
was very substantial. The United States has
image as a world power and its greatly dimin-
imposed economic sanctions on Russian
ished capabilities. Russia’s drive to reassert
organizations for exporting military technol-
dominance in and integration of the former
ogy and equipment to Iran and Syria. There
Soviet states is most successful with Belarus
are more restrictions on aid to Russia in the
and Armenia but arouses opposition in Geor-
FY2003 foreign aid bill. In the spirit of
gia, Ukraine, Uzbekistan, and Azerbaijan. The
cooperation after September 11, however, the
CIS as an institution is failing. Washington
two sides agreed on a strategic nuclear force
and Moscow continue to disagree over Rus-
reduction treaty and a strategic framework for
sian missile technology and nuclear reactor
bilateral relations, signed at the Bush-Putin
transfers to Iran, among others. After Septem-
summit in May 2002.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On July 11, U.S. Ambassador to Russia Alexander Vershbow, called on Russian
authorities to share what information they might have on Iraqi resistance groups and the
whereabouts of Saddam Hussein with U.S. intelligence agencies. The Russian government
protested the inference that it had, and was withholding, such information.
On July 30, Russia withdrew the last of its peacekeeping forces from Bosnia.
On July 30, the Russian government agreed to allow the OSCE to reopen an office in
Chechnya, closed earlier this year when Moscow withdrew its mandate.
On August 1, Moscow announced that North Korea had agreed to Russian participation
in 6-party talks on North Korea’s nuclear program, to begin in September.
On August 1, a suicide bomber detonated a truck bomb at a Russian military hospital
in Mozdok, near Chechnya, killing over 50 people and injuring more than 100.
On August 13, U.S., British, and Russian authorities announced that a joint anti-
terrorism operation had foiled an attempt by a British citizen to smuggle Russian-made hand-
held anti-aircraft missiles into the United States for attacks against U.S. airliners.
On August 14, the Russian cabinet unveiled its proposed 2004 budget, which sets total
spending at 2.66 trillion rubles ($87 billion) and revenue at 2.74 trillion rubles ($90 billion).
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 145
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. During Yeltsin’s presidency,
many of the republics and regions won greater autonomy. Only the Chechen Republic,
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however, tried to assert complete independence. 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 are appointed
by the regional chief executive and the regional legislature. (See p. 3-4, below.) The next
Duma election is due in December 2003.
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 has an important role in the future
of strategic arms control, missile defense, nonproliferation of weapons of mass destruction,
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 technology, computers, communications, transportation, and investment
capital — are in areas in which the United States is highly competitive.
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
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reform; institutional clashes between the central government and the regions; and rivalries
among competing political-economic cliques and 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 create an
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
blamed Chechen terrorists and 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. 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, 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 reportedly has lost over 10,000 troops in
Chechnya (1999-2002), 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. The bloodshed continues on both sides.
Russian forces regularly conduct sweeps and “cleansing operations” that reportedly result
in civilian deaths, injuries, and abductions. In October 2002, some 40 Chechen separatists
seized a Moscow theater, taking over 800 hostages and demanding that Russian forces leave
Chechnya. Russian special forces, using an incapacitating gas, stormed the theater and killed
the hostage-takers — and 129 hostages. In December, two truck bombs devastated the main
administrative building of the pro-Moscow Chechen government in Grozny, killing over 80
people and wounding many others. In March 2003, Russian authorities conducted a
referendum in Chechnya on a new Chechen constitution that would give the region limited
autonomy within the Russian Federation. Moscow claims it was approved by a wide margin.
An election for Chechen president is scheduled for October 2003. Moscow hopes this will
increase political stability and reduce bloodshed. Suicide bomb attacks in Chechnya in April
and May and in Moscow in July, with major loss of life, have dimmed Moscow’s hopes.
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 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 (and mis-named) Liberal Democratic party and Grigory
Yavlinsky’s democratic, pro-market, Yabloko Party both lost over half the seats they
previously held. New Duma elections are scheduled for December 7, 2003.
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President Yeltsin’s surprise resignation (December 31, 1999) propelled Putin into the
Kremlin, advanced the presidential election from June to March and increased Putin’s
already strong election prospects. (See CRS Report RS20525, Russian Presidential Election,
2000
, March 24, 2000.) 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. Three of Putin’s
four chief rivals decided not to run in the presidential election. On March 26, 2000, 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 is expected to seek reelection in March 2004.
Putin, who was a Soviet KGB foreign intelligence officer for 16 years and later headed
Russia’s Federal Security Service (domestic security), is 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 overseen by presidential appointees. 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 are appointed by the regional leaders and legislatures, but once
appointed, are 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. Gusinsky, one of
the so-called oligarchs who rose to economic and political prominence under Yeltsin, was
arrested in June 2000 on corruption charges and was later released and allowed to leave the
country. Many viewed this as an act of political repression by the Putin regime. In April
2001, the state-controlled gas monopoly 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 has also moved against the independent radio network, Echo Moskvuy and other
electronic media.
A 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 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. In April 2002, the pro-Putin bloc in
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the Duma staged a political coup against the Communist Party faction, depriving it of most
of its committee chairmanships and other leadership posts. Many believe this was
orchestrated by the Kremlin in order to undermine Communist parliamentary opposition to
Putin’s market-oriented economic reforms and his western-oriented foreign policy.
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, 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 almost 5 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
2002
GDP
Growth

-14.5%
-8.7%
-12.6%
-4.1%
-4.9%
0
-5.0%
3.2%
9%
5.5%
4%
Rates
Inflation 2,525% 847%
223%
131
%
11%
84%
36%
20.2
15%
12%
Rates
Sources: PlanEcon, Inc. and Center for Strategic and International Studies.
By late 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. The
government suspended payment on its debts to commercial and government creditors and
devalued the ruble, which lost two-thirds of its value, while the Russian stock market lost
88% of its value. Some analysts warned of the danger of a total economic collapse.
These dire predictions, however, were wrong. In 1999, the economy began to recover,
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 relatively strong in 2001 and 2002. 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. “Comprehensive” Paris Club
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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. The Bush Administration is believed to be leaning toward supporting Russia’s
quest for debt forgiveness. 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. The House passed a companion bill, (H.R. 1646), which was signed into
law (PL 107-228) on September 30, 2002. This act links U.S. debt forgiveness for Russia
to Russian efforts at nonproliferation of weapons of mass destruction.
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. The Putin government 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. The
test will be in its implementation. Some notable accomplishments include: a flat 13%
personal income tax and lower corporate taxes which helped boost government revenue and
passage of historic land privatization laws.
Foreign Policy
In the early 1990s, 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 have
eliminated 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 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. Russian foreign
policy became 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
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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. In 1995, Yeltsin replaced Kozyrev as
Foreign Minister with Yevgeny Primakov, who was decidedly less pro-Western. Primakov
opposed NATO enlargement, promoted integrating former Soviet republics under Russian
leadership, and favored closer links with China, India, and other states opposed to U.S.
“global hegemonist.” When Primakov became Premier in September 1998, he chose Igor
Ivanov to succeed him as Foreign Minister. Ivanov has kept that position.
During Putin’s first year as president he continued Primakov’s policies, but by 2001,
even before September 11, most analysts agree he made a strategic decision to reorient
Russian national security policy toward cooperation with the West and the United States.
Putin sees Russia’s economic revitalization proceeding from its integration in the global
economic system dominated by the advanced industrial democracies — something that
cannot be accomplished in an atmosphere of political/military confrontation or antagonism
with the United States. After the September 11 attacks, the Bush Administration welcomed
Russia’s cooperation against Al Qaeda and the Taliban regime in Afghanistan, which paved
the way for broader bilateral cooperation.
Moscow is still unhappy about NATO enlargement in Central and Eastern Europe, but
has reconciled itself to that, including former Soviet Baltic republics. In December 2001,
NATO and Russian Foreign Ministers announced their intention to create a NATO-Russia
Council, on the principle of “NATO at 20,” In May 2002, NATO and Russian leaders
meeting in Rome signed the “NATO at 20" agreement, in which Russia and NATO members
participate as equals on certain issues. This replaces 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 all sides found unsatisfactory.
After the collapse of the Soviet Union, a consensus emerged in Moscow that
reestablishing Russian dominance in this region is a very high priority. 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 CIS as an institution 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. On February 23, 2003, the
presidents of Russia, Ukraine, Belarus, and Kazakhstan held an unexpected meeting in
Moscow at which they announced agreement in principle on creating a “joint economic
space” covering the four countries.
Russia and Belarus have taken steps toward integration. Belarusian President Aleksandr
Lukashenko may have hoped to for a leading role in a unified state during Yeltsin’s decline.
Lukashenko 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,
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they signed a Union Charter. Lukashenko minimized his and his country’s political
subordination to Moscow. Yeltsin avoided onerous economic commitments to Belarus. 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. Moscow and Minsk
continue to differ over the scope and terms of union, and Putin repeatedly has sharply
criticized Lukashenko’s schemes for a union in which the two entities would have equal
power. The prospects for union seem to be growing more distant.
Russian forces remained in Moldova against the wishes of the Moldovan government
(and the signature of a 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 has delayed implementation of a 1999 OSCE-brokered agreement to withdraw
from military bases in Georgia. In 2002, tension arose over Russian claims that Chechen
rebels were staging cross-border operations from Georgia’s Pankisi Gorge, near the border
with Chechnya. In March 2002, the Bush Administration announced that a small contingent
of U.S. military personnel would be deployed in Georgia to help train and equip Georgian
security forces combat Chechen, Arab, Afghani, al-Qaeda, and other terrorists who may have
infiltrated into Georgia. Russian aircraft have staged sporadic air attacks against alleged
Chechen rebel bases in Georgia. Tension between Russia and Georgia escalated as Russian
officials, frustrated by the seemingly endless guerilla warfare in Chechnya, began threatening
systematic military action against Chechen bases in Georgia. President Bush asked President
Putin to give Georgia time to clear the Pankisi Gorge. E.U. officials and other European
leaders also spoke out against Russian military action in Georgia. In response, Russian
officials racheted down the rhetoric about military action in Georgia, at least temporarily.
(See CRS Issue Brief IB95024, Armenia, Azerbaijan, and Georgia: Political Developments
and Implications for U.S. Interests,
updated regularly.)
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
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 attacks. Russian cooperation with the deployment of U.S. military forces in
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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 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 the separatists, allowing Kiev successfully to use economic and political pressure
against them. Tension remained over Kiev’s refusal to cede exclusive use of the Sevastopol
naval base in Crimea to Russia. Moscow 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.
Defense Policy
Fundamental Shakeup of the Military
The Russian armed forces and defense industries have been in turmoil for over a decade.
Their previously privileged position in the allocation of resources has been broken, as has
their almost sacrosanct status in official ideology and propaganda. Hundreds of thousands
of troops were 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. 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 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 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
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(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 to effect military reform.
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 power.
Even the increased defense spending under Putin 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
share in responsibility for 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
.)
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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, attacks, however, the two nations have reshaped their relationship on the basis
of cooperation against terrorism and Putin’s goal of integrating Russia economically with the
West. (For the change in Russian policy toward integration with the West and cooperation
with the United States, see CRS Report RL31543, Russia’s National Security Policy After
Sept. 11
, August 20, 2002.)
Russia’s construction of nuclear reactors in Iran and its role in missile technology
transfers to Iran are critical sources of tension with the United States. Despite repeated and
ongoing representations from the White House and Congress, who argue that Iran will use
the civilian reactor program as a cover for a covert nuclear weapons program, Russia has
adamantly refused to cancel the project. Recent revelations of previously covert Iranian
nuclear developments have revived this issue, and some Russian political leaders now
criticize the policy of nuclear cooperation with Iran. For the first time, there is now a serious
policy debate on this issue in Moscow. As of August 2003, Moscow’s official position is
that it intends to continue its civilian nuclear power projects in Iran, while urging Teheran
to accept more intrusive international safeguard inspections.
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 June 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 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 and threatened to curtail contracts worth hundreds of millions of dollars for
Russian launch of U.S. commercial satellites. Moscow denies the U.S. 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), which
requires 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. The Senate also unanimously passed
the bill, which President Clinton signed it into law (P.L. 106-178) on March 14, 2000.
On November 3, 2000, 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
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nuclear reactor at Bushehr. (See CRS Report RL30551, Iran: Arms and Technology
Acquisitions
.) The Bush Administration continues to treat these as urgent issues in its
relations with Russia. At the May 2002 summit meeting in Russia, the two countries
established a bilateral working group to seek a mutually satisfactory resolution of this
lingering policy conflict. In late July 2002, however, the Russian press reported that the
Ministry of Atomic Energy had adopted a plan to build five new nuclear reactors in Iran over
a ten-year period. A high-level U.S. delegation made a previously planned visit to Moscow
to urge Russia to cancel this deal. Afterward, Russian officials reportedly said that the ten-
year plan was “theoretical” and might be reevaluated in light of “political factors.” Russian
nuclear cooperation with Iran remains at the top of the U.S. agenda in talks with Moscow.
Since the mid-1990s, U.S. and Russian interests have clashed over Iraq. Russia 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 supported Iraq’s call for an end
to economic sanctions and limiting UN weapons inspections. It also sought to expand
economic relations with Iraq and secure repayment of $7 billion of loans owed from the
Soviet period. After September 11, Moscow moved away from blanket support of Iraq.
Some Russian officials suggested that under certain circumstances, U.S. military action
against Iraq might not seriously strain U.S.-Russian relations — provided it was not
unilateral and Russia’s economic interests in Iraq were protected. Nevertheless, on August
16, 2002, Iraqi and Russian officials announced a long-term agreement worth $40 billion for
Russian firms to modernize Iraq’s oil, electrical, chemical, agricultural, and transport sectors.
As the United States moved toward military action against Iraq, Putin tried to balance three
competing interests: protecting Russian economic interests in Iraq; restraining U.S. global
dominance; and maintaining friendly relations with the United States. In February-March
2003, Putin aligned Russia with France and Germany in opposition to U.S. military action
and threatened to veto a U.S.-backed UNSC resolution authorizing military force against
Iraq. The U.S.-led war in Iraq further strained U.S.-Russian relations, but the senior
leadership in both countries said that this would not be allowed to jeopardize their overall
cooperation. On May 22, Russia voted with other members of the UN Security Council to
approve a U.S.-backed resolution giving the United States broad authority in administering
post-war Iraq. Moscow’s main interests in Iraq now are in debt repayment, having the post-
Saddam regime honor pre-war multi-billion dollar contracts with Russian oil firms, and
preventing a glut of Iraqi oil from sharply depressing the price of oil.
A sharp U.S.-Russian clash of interests over missile defense, the ABM Treaty, and
strategic arms reductions flared in the first year of the Bush Administration. These problems
were substantially reduced, but not entirely resolved, at the Bush-Putin summit in May 2002.
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
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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
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 narrowed the differences on
strategic force reductions.. 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 was cool but restrained,
calling the U.S. decision a mistake, but saying that it would not cause a major disruption in
relations. 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 continued 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, achieve 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.
The so-called Treaty of Moscow was signed by the two presidents on May 24, 2002. On
June 13, the United States became free of all restraints of the ABM Treaty. On the same day,
Moscow announced that it would no longer consider itself bound by the provisions of the
(unratified) START II Treaty, which has become a dead letter. On June 24, the commander
of Russia’s Strategic Rocket Forces announced that in response to the U.S. withdrawal from
the ABM Treaty, Russia had decided to prolong the life of its MIRVed ICBM force, which,
he said, could be extended another 10-15 years. On June 1, 2003, Presidents Bush and Putin
exchanged instruments of ratification allowing the Treaty of Moscow to enter into force.
They also agreed to cooperate in missile defense. Later that month, the two sides agreed to
conduct a joint missile-defense exercise on Russian territory next year.
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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 have blocked U.S.
funding for some U.S.-Russian comprehensive threat reduction programs, but President Bush
granted Russia a waiver.
Despite continued tension between Washington and Moscow over Iran and the sharp
disagreement over Iraq in early 2003, both governments seems determined to preserve the
cooperative relationship they built following the September 11 attacks. In March 2003, Sen.
Lugar introduced legislation to exempt Russia from the Jackson-Vanik amendment to the
Trade Bill of 1974, action which would grant Russia permanent normal trade relations
(PNTR) status and facilitate Russian accession to the WTO.
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 between 15%-22% since then. Roughly $158 million was allocated
to Russia in FY2000 appropriations. The Administration has requested $148 million for
Russian programs in FY2003, a 6% cut from the previous year.
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 each year, most recently in May 2001.
In addition to the conditions related to Russian nuclear reactor and missile technology
transfers to Iran, discussed above, Members of Congress introduced a number of other
conditions on aid to Russia. The FY2001 foreign aid bill prohibited 60% of aid to the central
government of Russia if it was not cooperating with international investigations of war crime
allegations in Chechnya or providing access to NGOs doing humanitarian work in Chechnya.
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The FY2002 bill withholds 60% of aid to the central government only if it does not provide
access to NGOs. Possibly as a result of Russian cooperation with the United States in its war
on terrorism, the war crime provision has been dropped. House and Senate FY2003 bills
(H.R. 5410, S. 2779) continue this practice.
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