Although Russia made some progress in democratization during the 1990s, this was reversed after Vladimir Putin rose to power in 1999-2000. The sharp decline in oil and gas prices since mid-2008 put a halt to a Russian economic expansion, resulting in an officially reported 9.5% drop in gross domestic product in 2008. Russia's military has been in turmoil after years of severe force reductions and budget cuts, now numbering about 1.2 million, down from 4.3 million in 1986. Recent developments and the future of U.S.-Russia relations are outlined in this Congressional report.
Although Russia made some uneven progress in democratization during the 1990s, this limited progress was reversed after Vladimir Putin rose to power in 1999-2000 (first as prime minister, then as president), according to most observers. 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, placed controls on the activities of non-governmental organizations (NGOs), and established government ownership or control over major media and major industries, including the energy sector. Putin's suppression of insurgency in the Chechnya republic demonstrated his government's generally low regard for the rule of law and respect for human rights, according to these observers. Dmitry Medvedev, Vladimir Putin's chosen successor and long-time protégé, was elected President in March 2008 with about 70% of the vote. Immediately after the election, Putin became Prime Minister. President Medvedev generally has continued policies established during the Putin presidency. 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 that most of the international community have censured.
The sharp decline in oil and gas prices since mid-2008 and other aspects of the global economic downturn put a halt to a Russian economic expansion that had begun in 1999, resulting in an officially reported 9.5% drop in gross domestic product in 2008 and an estimated 8-9% drop in 2009. These declines exacerbate existing problems: 15% of the population live below the poverty line; inadequate healthcare contributes to a demographic decline; domestic and foreign investment is low; inflation hovers around 12%-14%; and crime, corruption, capital flight, and unemployment remain high.
Russia's military has been in turmoil after years of severe force reductions and budget cuts. The armed forces now number about 1.2 million, down from 4.3 million Soviet troops in 1986. Readiness, training, morale, and discipline have suffered. Russia's economic revival allowed it to substantially increase defense spending. Some high-profile activities were resumed, such as multi-national military exercises, Mediterranean and Atlantic naval deployments, and strategic bomber patrols. Stepped-up military efforts were launched in late 2007 to further downsize the armed forces and emphasize rapid reaction and contract forces. The global economic downturn and strong opposition within some segments of the armed forces appears to have slowed down force modernization. After the Soviet Union's collapse, the United States sought a cooperative relationship with Moscow and supplied almost $17 billion to Russia from fiscal year 1992 through 2008 to support urgent humanitarian needs, to encourage democracy and market reform, and to support WMD threat reduction. U.S. aid to reduce the threats posed by the proliferation of weapons of mass destruction in recent years has hovered around $700-$900 million per fiscal year, while other foreign aid to Russia has dwindled, due in part to the phase-out of some aid and to congressional conditions.