Russia's territory, bounded by the Arctic and Pacific oceans to the north and east, extends over 17 million sq. km (6.6 million sq. miles). This makes it by far the world's largest state, almost twice as big as either the USA or China. The Russian Federation's sovereign status, with the borders established for the federative state in 1954, dates from 1991 – the dissolution of the USSR. Within the CIS, it maintains a traditionally dominant role in central Asia and the Caucasus. Ethnic Russians make up 82% of the population, but there are around 150 smaller ethnic groups, many with their own national territories within Russia's borders. Regionalism and separatism are major political issues. The situation is complicated by the fact that many of these territories are rich in key resources such as oil, gas, gold, and diamonds.

In the former Soviet Union, Russians were just over 50% of the population, but in Russia they are an overwhelming majority. Although significant numbers of Russians still live in some of the neighboring former Soviet republics, notably Ukraine and Latvia, a rise in nationalism has persuaded many to return to Russia.

Within Russia there has also been an increase in ethnic tension, especially in the Caucasus. Hostility toward the Muslim Chechens is particularly acute. There are 57 nationalities with their own territories within the federation and 95 nationalities (but only 6% of the population) without a territory.

Social life in Russia has not changed significantly since the demise of communism. With the lifting of censorship, there has been a greater expression of sexuality and of political and religious views. The expensive rebuilding of Moscow's Church of Christ the Savior symbolized this change. The strong revival of the Russian Orthodox Church is boosted by legal recognition of its "special role" in Russia's history. All religious organizations were required to re-register by 1 January 2000, under conditions which many small minority faiths could not meet, and whereby a church deemed to "violate social order" would be banned.

One marked change of which Russians speak is the growing importance given to money. Mutual support systems of extended friendships are now in decline.

The position of women has changed little since the fall of communism. Many have suffered from the rise in unemployment, but this reflects the demise of part-time or badly paid jobs, rather than gender-motivated social change. Most Russians have very modest living standards and were further impoverished by the collapse of the economy in the late 1990s.

Strengths

Huge natural resources, in particular hydrocarbons, precious metals, fuel, timber. Potential from future international oil pipelines. Enormous engineering and scientific base. Small enterprises benefited from devaluation of rouble in 1998. Tax reforms increasing government revenue. Lucrative privatizations. Recognized as a market economy in 2002, encouraging foreign investment.

Weaknesses

Oil profits vulnerable to fluctuating world prices. Crumbling infrastructure. Slow transition to market economy. Privatized companies asset-stripped by former managers. Organized crime controls huge areas of the economy. Regional investment hindered by uneven implementation of federal laws. Tax evasion and corruption remain widespread. Rising wages and strengthening rouble have promoted boom in imports, narrowing trade gap, harming local production, and stifling small enterprises.

Profile

The few gains made in the early post-communist era were swept aside in the 1998 economic crisis. Powerful financial "oligarchs" emerged and organized crime moved into most areas of the economy. However, the devaluation of the rouble ironically served to promote a mini-boom in the last years of the 20th century. Real wages fell, encouraging small enterprises to expand, while the devaluation made imports too expensive for the average consumer – promoting local production. Industrial production increased and GDP grew by 7.6% in 2000. Putin has also moved to dismantle the power of the economic elites. The private sale of land was permitted from 2001, and a new 13% flat rate of income tax promised to help reduce widespread tax evasion. However, while the economy weathered the 2001 global slowdown, the rise in real wages and the strengthening of the rouble have begun to offset the previous years' gains.

The government is responsible to the elected parliament (Duma), but executive power lies firmly with the president.

Profile

President Boris Yeltsin's second term (1996–1999) was overshadowed by his health problems, economic crisis, and corruption. Dramatic changes of government personnel were a characteristic of this period, as Yeltsin confronted the Duma in both 1998 and 1999 over his choice of prime minister. The confrontation ended with the appointment of Vladimir Putin, a little-known former head of the Federal Security Service (FSB), who became Yeltsin's favorite to succeed him.

Putin has greatly consolidated his position since coming to power as acting president from the end of 1999. Having stormed to victory in the first round of the 2000 presidential elections, he has tackled the power of the business "oligarchs," and of Russia's 89 regional governors, with his program of centralization. His support within the Duma has been consolidated by the transformation of the Unity bloc (which he formed for the December 1999 legislative elections) into an official party. A merger with the Fatherland bloc in April 2001 made Unity the largest single party in parliament.

The conflict in Chechnya, although it damaged Putin's image internationally, has by contrast been a key element in his domestic appeal as a strong leader. This was shaken by criticism of his handling of the Kursk submarine disaster, in which 118 sailors died in August 2000. However, the marked improvement in the economy during his first year in office stood greatly to his credit in popular opinion, as it also did for Prime Minister Mikhail Kasyanov, appointed in May 2000 with revitalizing the economy as his central task.

The Communist Party, which until April 2001 was the single largest party in the Duma, remains powerful because of its effective organization and its ability to appeal to those who have suffered from the upheavals of the post-Soviet period. However, even with parliamentary allies, it has been unable to take power. Its leader Gennady Zyuganov has three times been beaten to the presidency.

Main Political Issues

Living standards

Russians became disillusioned at the failure of politicians to improve their living standards. The fall of communism swept away the securities which used to underpin life – long-term employment, guaranteed housing, and a basic diet – hitting the old particularly hard. Uneven and crisis-prone efforts at introducing a market economy under former president Yeltsin created much insecurity. Putin has more credibility on running the economy.

Crime and corruption

Crime levels rose alarmingly under the post-Soviet regime, and visitors began to be warned against walking the streets of St. Petersburg or Moscow after dark. Widespread bureaucratic corruption was countered by the power acquired by business tycoons, the so-called "oligarchs," who snapped up privatized industries at bargain prices. Putin launched a crusade against these oligarchs, but has shied away from a full-scale review of the privatization process.

Regionalism and separatism

Nation-based separatism is brutally suppressed. Nowhere has this been made clearer than by the ferocious military campaign in Chechnya.

Influence accumulated under the Yeltsin regime by Russia's 89 regional governors was reversed by Putin's efforts to concentrate power in the presidency. Control of police and taxation has been centralized in seven huge federal districts, responsible only to Putin, and the governors have been stripped of their seats in the upper house, the Federation Council.

Russia's loss of great power status

Once the counterweight to the USA, Russia's importance on the global stage was seriously dented by the collapse of the USSR and the subsequent economic difficulties. Since 2001, however, the Putin regime has had some success in reclaiming Russia's international influence.

The 11 September 2001 terrorist attacks on the USA laid the foundations for a massive change in Russia's relations with the West.

Before then, Russia had been pursuing an independent foreign policy with a renewed skepticism about Western intentions, especially NATO's eastward expansion. The 1999 NATO bombardment of Yugoslavia, Russia's natural coethnic and coreligionist ally, had pushed relations to a low ebb. Russia also felt threatened by US plans for a new missile defense system (NMD). On top of these underlying tensions was heaped Western criticism of the long-running and often bloody Russian campaign against Muslim separatists in Chechnya.

After 11 September, by pledging immediate support to the US-led "war on terrorism," President Putin secured unqualified backing for the Chechnya campaign. This was now viewed by the West as a legitimate battle against "terrorism." By agreeing to share intelligence information as part of the new global war, Russia and NATO appeared to bury their grievances, and in 2002 a new NATO–Russia Council was established, effectively making Russia a junior partner in NATO. In return Russia dropped its fundamental objection to the NMD and agreed to a new nuclear disarmament treaty which was widely seen as favoring US interests.

The successor states of the USSR, the "near abroad," retain close links to Russia, particularly Belarus, which is keen on a full reunification.

The loss of the 118-man Kursk submarine in August 2000 symbolized the long-term decline of Russia's military might. Maintaining and using the enormous former communist war machine has proved too expensive. Plans have been drafted to axe hundreds of thousands of troops by 2003, and conscription is set to be abolished in 2005. Public anger at conditions within the services has led to pay increases.

Spending on nuclear forces is limited to physical protection of warheads. In 2002, Russia agreed to cut further its nuclear arsenal, expanding on the 2000 Start II Treaty, and slashing the number of warheads by 60%. It also dropped previous objections to the proposed US national missile defense system.

The Northern and Pacific navy fleets are inactive and deteriorating fast. Fourteen admirals were disciplined in 2001 for the "failings" of the Northern fleet.

Russia is a leading world producer of oil, natural gas, and electricity, among other resources. Confirmed reserves make Russia the world's leading country in terms of hydrocarbons, gold, other precious metals, diamonds, and timber.

Unlike some of the other republics of the ex-USSR, Russia has been reluctant to open its resources up to foreign concerns, fearing the loss of control to Western multinationals. The lack of investment and technology is a reason for underexploitation of many of the country's major resources. Geographic remoteness is another. Also, some of the richest energy and mineral deposits are located in national territories such as Tatarstan and Sakha Yakutia in Siberia. The regions' desire for greater autonomy has turned the ownership of these resources into a delicate political issue.

Although awareness of Russia's environmental problems has risen sharply, the resources, political will, and know-how to tackle them are still lacking. While Russia now has an active green movement, it has not as yet won significant support in general elections.

Each region has its own particular problems. The north risks contamination from the neglected Soviet-era nuclear submarine fleet and from nuclear waste containers dumped in the Barents Sea. Thousands of tonnes of chemical weapons have been dumped in the Baltic, although their exact location has not been revealed. Many fish species are now extinct in the River Volga in central Russia. In the Urals and the cities of European Russia, many chemical and heavy industrial plants do not treat their effluents at all. In 2001 parliament approved a bill to allow the atomic energy ministry Minatom to earn $2 billion a year from storing and reprocessing foreign nuclear waste.

Russia has a comprehensive transportation network. However, since 1991, all systems have seen some decline due to lack of funding. Cities are still served by good trolley and bus systems and Moscow has one of the most impressive subway systems in the world. In rural areas, car ownership is low and the population relies on an extensive bus service. About 20% of the railroad track should be renewed annually owing to frost and other damage. Shortage of funds means this is no longer done. The railroads are heavily used but seriously overburdened and liable to accidents and delays. New track has been laid for the Sokol (Falcon) high speed rail link between Moscow and St. Petersburg; the first trains to use it in 2000 cut over an hour off the minimum journey time and further dramatic reductions are expected. Roads in major cities are deteriorating, as are interurban highways. Crime is a problem on railroads – notably the Trans-Siberian – and roads.

The former Aeroflot monopoly of air transportation has been broken up. Aeroflot now competes as Aeroflot Russian Airlines, but hundreds of regional "babyflot" airlines run mainly domestic routes, some with alarming accident records.

The health care system is in crisis and medicines are often in short supply.

Until 1991, state enterprises provided considerable health care for employees. Employers should now make payments through the Medical Insurance Fund, but many privatized concerns seek to cut costs. Local authorities lack the resources to take over these responsibilities. Bribing medical staff to obtain treatment is commonplace, and there is a lack of pharmaceutical products and drugs. Hospital patients are normally fed by their relatives.

Schooling is free, and is compulsory for nine years up to age 15.

Attempts to change the Soviet-based curriculum, still widely in use, are hampered by lack of funds. Hundreds of private lycées, such as those run by the Orthodox Church, offer courses in west European languages. German in particular has made a comeback as a key language for international commerce. The state-subsidized higher education system is seriously underfunded, and some institutions have begun charging students. Prestigious institutions such as the Academy of Sciences have been forced to cut staff and research. Most academics have to rely on extramural earnings.

Despite official figures showing a drop in crime, in reality policing cannot keep pace with formidable problems.

Intergang violence accounts for a sharp rise in murders. Street crime has also increased in the larger cities. Corruption is rife, particularly in the regions. The Russian mafia profits from protection rackets, prostitution, smuggling operations, and narcotics, and is also active in western Europe. Public fear resulting from the rise in crime contributed to a temporary popularity in authoritarian political platforms.

With around one million prisoners, overcrowding, poor conditions, and disease are major problems in Russian prisons.

Wealth disparities in Russia have increased sharply. A small minority of the population made huge profits from the dismantling of the old Soviet command economy. About 10% are thought to have benefited in some way.

A growing number of dollar millionaires flaunt their wealth, especially in Moscow. The bosses of organized crime are Russian society's wealthiest group. Russia is now the biggest buyer of Rolls Royces, while BMWs, Mercedes, and Volvos are relatively common in Moscow and St. Petersburg. A considerable amount of wealth is deposited abroad. There are now thousands of Russian offshore bank accounts; Northern Cyprus is a favorite location.

The breakup of the previous monopoly tourist agency, Intourist, has led to a vast expansion of tourism opportunities: each region is keen to earn hard currency and to attract rich visitors. By 2000 the total number of tourists a year had reached over 21 million.

At the luxury end of the market, trips from St. Petersburg to Tashkent on former president Brezhnev's official train are now available. River trips down the Volga and visits to medieval monasteries are increasingly popular. Tourists can also explore forests, or fish for salmon in the Kola peninsula. The defense sector has opened up to tourism and now offers flights in MiG jets, or drives in T–84 Russian tanks. Even the space industry has branched into tourism.

Moscow and St. Petersburg remain favorite destinations, where hotels tend either to be for the well-off or of a basic standard. Near St. Petersburg, Novgorod has many fine churches and the Pskov area is celebrated as the setting for many of Pushkin's works, including Eugene Onegin and Boris Godunov.

Many parts of Russia remain inaccessible to most tourists. The communist ban on foreigners visiting the Urals has been lifted, but the area still has very few facilities. Resorts such as the subtropical Sochi on the Black Sea, where powerful Russians have dachas (country houses), have experienced a building boom.

The first Russian state (Rus) was in present-day Ukraine. Occupation by the Tatars (1240–1480) left a mark on the Russian language and character. From the 17th century, the Romanovs ruled an expanding empire.

• 1904–1905 Russian war against Japan; ends in defeat for Russia.
• 1905 "Bloody Sunday" revolution.
• 1909–1914 Rapid economic expansion.
• 1914 Enters World War I against Germany.
• 1917 February Revolution; abdication of Nicholas II. October Revolution; Bolsheviks take over with Lenin as leader.
• 1918 Nicholas II and family shot.
• 1918–1920 Civil war.
• 1921 New Economic Policy; retreat from socialism.
• 1922 USSR established.
• 1924 Lenin dies. Leadership struggle eventually won by Stalin.
• 1928 First Five-Year Plan: forced industrialization and collectivization.
• 1936–1938 Show trials and campaigns against actual and suspected members of opposition. Millions sent to gulags in Siberia and elsewhere. Purges widespread.
• 1939 Hitler–Stalin pact gives USSR Baltic states, eastern Poland, and Bessarabia (Moldova).
• 1941 Germany attacks USSR.
• 1943 February, tide of war turns with lifting of siege of Stalingrad.
• 1944–1945 Soviet offensive penetrates Balkans.
• 1945 Germany defeated. Under Yalta and Potsdam agreements eastern and southeastern Europe are Soviet zone of influence.
• 1947 Cold War begins; Stalin on defensive and fears penetration of Western capitalist values.
• 1953 Stalin dies.
• 1956 Hungarian uprising crushed. Krushchev's "secret speech" attacking Stalin at Party congress.
• 1957 Krushchev consolidates power. Sputnik launched.
• 1961 Yuri Gagarin first man in space.
• 1962 Cuban missile crisis.
• 1964 Krushchev ousted in coup, replaced by Leonid Brezhnev.
• 1975 Helsinki Final Act; confirms European frontiers as at end of World War II. Soviets agree human rights are concern of international community.
• 1979 Invades Afghanistan. Beginning of new intensification of Cold War.
• 1982 Brezhnev dies.
• 1985 Gorbachev in power. Start of perestroika, "restructuring." First of three USA–USSR summits resulting in arms reduction treaties. Nationality conflicts surface.
• 1988 Law of State Enterprises gives more power to enterprises; inflation and dislocation of economy.
• 1990 Gorbachev becomes Soviet president. First partly freely elected parliament (Supreme Soviet) meets.
• 1991 Boris Yeltsin elected president of Russia. Yeltsin and Muscovites resist hard-line communist coup. Gorbachev sidelined. CIS established; demise of USSR.
• 1992 Economic shock therapy.
• 1993 Yeltsin decrees dissolution of Supreme Soviet and uses force to disband parliament. Elections return conservative state Duma.
• 1994 First Russian military offensive against Chechnya.
• 1995 Communists win elections.
• 1996 Yeltsin reelected despite strong Communist challenge. Peace accord in Chechnya.
• 1998 Economic turmoil forces devaluation of rouble. Severe recession, rampant inflation.
• 1998–1999 Yeltsin repeatedly changes prime minister in successive political crises.
• 1999 December, parliamentary elections; Yeltsin resigns; Prime Minister Putin is acting president.
• 1999–2000 Terrorist violence blamed on Islamic separatists in Dagestan and Chechnya. Military offensive against Chechnya; fall of Chechen capital Grozny to Russian forces.
• 2000 Putin wins presidential election, consolidates power. Attack on "oligarchs" in big business. Improvement in economy. Kursk nuclear submarine disaster.
• 2001 April, party mergers make Putin's Unity party the largest grouping in parliament. July, Russian–Chinese friendship treaty.
• 2002 April, Putin declares Chechen war "over." May, Cam Ranh Bay base in Vietnam, last Russian outpost beyond former USSR, closed. Nuclear arsenal cut by 60%. NATO–Russia Council formed.