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Stuart
D. Goldman, Congressional Research Service
Updated July 8, 2003
US Policy Toward Russia
SUMMARY
Vladimir
Putin, catapulted into the Kremlin by Boris Yeltsin's resignation, was elected
President on March 26, 2000 by a solid majority that embraced his military
campaign in Chechnya. Parties backing Putin did well in the December 1999 Duma
election, giving Putin a stable parliamentary majority as well. Putin's top
priority is to revive the economy and integrate Russia into the global
marketplace. He has also strengthened the central government vis-a-vis the
regions and brought TV and radio under tighter state control. Federal forces
have suppressed large-scale military resistance in Chechnya but face the
prospect of prolonged guerilla warfare.
The
economic upturn that began in 1999 is continuing. The GDP and domestic
investment are growing after a decade-long decline, inflation is contained, the
budget is balanced, and the ruble is stable. Major problems remain: one fourth
of the population live below the official poverty line, foreign investment is
very low, crime, corruption, capital flight, and unemployment remain high. Putin
appears to seek simultaneously to tighten political control and introduce
economic reforms.
Russian
foreign policy in the late 1990s had grown more assertive, fueled in part by
frustration over the gap between Russia's self-image as a world power and its
greatly diminished capabilities. Russia's drive to reassert dominance in and
integration of the former Soviet states is most successful with Belarus and
Armenia but arouses opposition in Georgia, Ukraine, Uzbekistan, and Azerbaijan.
The CIS as an institution is failing. Washington and Moscow continue to disagree
over Russian missile technology and nuclear reactor transfers to Iran, among
others. After September 11, however, Russia adopted a much more cooperative
attitude on many issues.
The
military is in turmoil after years of severe force reductions and budget cuts.
The armed forces now number about one million, down from 4.3 million Soviet
troops in 1986. Weapons procurement is down sharply. Readiness, training,
morale, and discipline have suffered. Putin's government has increased defense
spending sharply but there is conflict between the military and the government
and within the military over resource allocation, restructuring, and reform.
After
the collapse of the Soviet Union, the United States sought a cooperative
relationship with Moscow and supplied over $4 billion in grant aid to encourage
democracy, market reform, and WMD
threat reduction in Russia. Early hopes for a close partnership waned, in
part because Russians grew disillusioned with perceived U.S. disregard for
Russian interests, while Washington grew impatient with Russia's increasingly
adversarial stance on issues in which their interests clash. Direct U.S. foreign
aid to Russia, under congressional pressure, fell over the past decade. Indirect
U.S. assistance, however, through institutions such as the IMF, was very
substantial. The United States has imposed economic sanctions on Russian
organizations for exporting military technology and equipment to Iran and Syria.
There are more restrictions on aid to Russia in the FY2003 foreign aid bill. In
the spirit of cooperation after September 11, however, the two sides agreed on a
strategic nuclear force reduction treaty and a strategic framework for bilateral
relations, signed at the Bush-Putin summit in May 2002.
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, 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 by2003. 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 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 incapacitatingg as, 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 bya 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
misnamed) 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 2003.
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. (SeeCRSReportRS20525,
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 Berezovskyto 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 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 povertyor
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.
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 bygovernment 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 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 January1992, 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; order 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;)and 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. 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
October11, 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, 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 in 2002, Putin 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, especiallyoil 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 Uzbekistan, Tajikistan, and Tajikistan would have seemed
unthinkable before September11. (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 January1994 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
(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.)
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 early July, 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 January10, 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 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, 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."
Sincethemid-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.
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 May2002. 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 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.
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. 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.
This document is not necessarily endorsed by the Almanac of Policy Issues. It is being preserved in the Policy Archive for historic reasons.