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Russian Political, Economic, and Security Issues and U.S Russian Political, Economic, and Security Issues and U.S. Interests Jim Nichol, Coordinator Specialist in Russian and Eurasian Affairs June 7, 2012 Congressional Research Service 7-5700 www.crs.gov RL33407 CRS Report for Congress Prepared for Members and Committees of Congress Russian Political, Economic, and Security Issues and U.S. Interests Summary Russia made some uneven progress in democratization during the 1990s, but according to many observers, this limited progress was reversed after Vladimir Putin rose to power in 1999-2000. During this period, the State Duma (lower legislative chamber) came to be dominated by government-approved parties and opposition democratic parties were excluded. Putin also abolished gubernatorial elections and established government ownership or control over major media and industries, including the energy sector. The methods used by the Putin government to suppress insurgency in the North Caucasus demonstrated a low regard for the rule of law and human rights, according to critics. Dmitriy Medvedev, Vladimir Putin’s chosen successor and long-time protégé, was elected president in early 2008 and immediately designated Putin as prime minister. President Medvedev continued Putin’s policies. In August 2008, the Medvedev-Putin “tandem” directed wide-scale military operations against Georgia and unilaterally recognized the independence of Georgia’s separatist South Ossetia and Abkhazia, actions denounced by most of the international community. In late 2011, Putin announced that he and Medvedev had decided that Putin would return to the presidency and that Medvedev would become his prime minister. At the March 2012 presidential election, Putin was reelected by a wide margin. The day after Putin’s inauguration on May 7, 2012, the legislature confirmed Medvedev as prime minister. Russia’s economy began to recover from the Soviet collapse in 1999, led mainly by oil and gas exports, but the decline in oil and gas prices and other aspects of the global economic downturn beginning in 2008 contributed to an 8% drop in gross domestic product in 2009. Since then, rising world oil prices have bolstered the economy. Russia continues to be challenged by an economy highly dependent on the production of oil, gas, and other natural resources. It is also plagued by an unreformed healthcare system and unhealthy lifestyles; low domestic and foreign investment; and high rates of crime, corruption, capital flight, and unemployment. Russia’s military has been in turmoil after years of severe force reductions and budget cuts. The armed forces now number less than 1.0 million, down from 4.3 million Soviet troops in 1986. Troop readiness, training, morale, and discipline have suffered, and much of the arms industry has become antiquated. Russia’s economic growth during most of the 2000s allowed it to increase defense spending to begin to address these problems. Stepped-up efforts were launched in late 2007 to restructure the armed forces to improve their quality. Opposition among some in the armed forces, mismanagement, and corruption have appeared to slow force modernization efforts. After the Soviet Union’s collapse, the United States sought a cooperative relationship with Moscow and supplied almost $19 billion in aid for Russia from FY1992 through FY2010 to encourage democracy and market reforms and in particular to prevent the proliferation of weapons of mass destruction (WMD). U.S. aid to reduce the threat posed by WMD proliferation has hovered around $700 million-$900 million per fiscal year, while other foreign aid to Russia has dwindled in recent years. In the past, U.S.-Russia tensions on issues such as NATO enlargement and proposed U.S. missile defenses in Eastern Europe were accompanied by some cooperation between the two countries on anti-terrorism and non-proliferation. Russia’s 2008 conflict with Georgia, however, threatened such cooperation. The Obama Administration has worked to “re-set” relations with Russia. The Administration has hailed the signing of a new Strategic Arms Reduction Treaty in April 2010, the approval of new sanctions against Iran by Russia and other members of the U.N. Security Council in June 2010, and cooperation in Afghanistan as signifying the “re-set” of bilateral relations. Congressional Research Service Russian Political, Economic, and Security Issues and U.S. Interests Contents Most Recent Developments............................................................................................................. 1 Post-Soviet Russia and Its Significance for the United States......................................................... 1 Political and Human Rights Developments ..................................................................................... 2 Background................................................................................................................................ 2 Putin’s First Two Presidential Terms: The Tightening of Presidential Power ........................... 3 The 2008-2012 Medvedev-Putin “Tandem”.............................................................................. 4 Government Moves Against Non-Favored Political Parties and Leaders in the Period Before the 2011-2012 Elections............................................................................ 6 Putin’s September 2011 Announcement of Candidacy for the Presidency ......................... 7 The December 4, 2011, State Duma Election ..................................................................... 8 The March 2012 Presidential Election and Its Aftermath ................................................. 10 Human Rights Problems.......................................................................................................... 12 Insurgency in the North Caucasus..................................................................................... 15 Defense Reforms ..................................................................................................................... 17 U.S. Perspectives...............................................................................................................19 Trade, Economic, and Energy Issues............................................................................................. 20 Russia and the Global Economic Crisis .................................................................................. 20 Russia’s Accession to the World Trade Organization (WTO) and PNTR for Russia .............. 21 Modernization Initiatives......................................................................................................... 22 The Skolkovo Center for Innovation................................................................................. 23 U.S. Interest in Skolkovo .................................................................................................. 23 Russian Energy Policy............................................................................................................. 24 Foreign Policy................................................................................................................................ 27 Russia and the West................................................................................................................. 27 NATO-Russia Relations .................................................................................................... 29 Russia and the European Union ........................................................................................ 31 Russia and the Soviet Successor States ................................................................................... 34 U.S.-Russia Relations .................................................................................................................... 37 The Obama Administration “Re-sets” Bilateral Relations ...................................................... 37 Bilateral Relations and Iran ..................................................................................................... 42 Bilateral Relations and Afghanistan ........................................................................................ 46 Bilateral Relations and North Korea ....................................................................................... 48 Bilateral Relations and Syria ...................................................................................................50 Russia’s Role in the Middle East Quartet................................................................................ 52 Arms Control Issues ................................................................................................................ 54 Cooperative Threat Reduction........................................................................................... 54 The New Strategic Arms Reduction Treaty....................................................................... 54 Russia and Missile Defense............................................................................................... 56 U.S.-Russia Economic Ties ..................................................................................................... 67 U.S. Assistance to Russia ........................................................................................................ 69 Tables Table 1. U.S. Merchandise Trade with Russia, 1994-2011............................................................ 67 Congressional Research Service Russian Political, Economic, and Security Issues and U.S. Interests Table 2.
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