The State Department web site below is a permanent electronic archive of information released prior to January 20, 2001.  Please see www.state.gov for material released since President George W. Bush took office on that date.  This site is not updated so external links may no longer function.  Contact us with any questions about finding information. NOTE: External links to other Internet sites should not be construed as an endorsement of the views contained therein.

U.S. Department of State Background Notes: Russia, October 1998

Official Name: Russian Federation

PROFILE

Geography

Area: 17 million sq. km. (6.5 million sq. mi.); about 1.8 times the size of the U.S.
Cities: Capital--Moscow (pop. 9 million). Other cities--St. Petersburg (5 million), Novosibirsk (1.4 million), Nizhniy Novgorod (1.3 million).
Terrain: Broad plain with low hills west of Urals; vast coniferous forest and tundra in Siberia; uplands and mountains (Caucasus range) along southern borders.
Climate: Northern continental, from subarctic to subtropical.

People

Nationality: Noun and adjective--Russian(s).
Population (1997 est.): 147.5 million.
Annual growth rate: Negative.
Ethnic groups: Russian 81%, Tatar 4%, Ukrainian 3%, other 12%.
Religion: Russian Orthodox, Islam, Judaism, Roman Catholicism, Protestant, Buddhist, other.
Language: Russian (official); more than 140 other languages and dialects.
Education (total pop.): Literacy--98%.
Health: Life expectancy (1996) -- 58 yrs. men, 72 yrs. women.
Work force (85 million): Production and economic services--84%. Government--16%.

Government

Type: Federation.
Independence: August 24, 1991.
Constitution: December 12, 1993.
Branches: Executive--president, prime minister (chairman of the government). Legislative--Federal Assembly (Federation Council, State Duma). Judicial--Constitutional Court, Supreme Court, Supreme Court of Arbitration, Office of Procurator General.
Subdivisions: 21 autonomous republics and 68 autonomous territories and regions.
Political parties: Shifting. The 1995-96 elections were contested by Our Home is Russia, Russia's Democratic Choice, Liberal Democratic Party of Russia, Agrarian Party, Communist Party of the Russian Federation, Unity and Accord, Yabloko Bloc, Women of Russia, Democratic Party of Russia, Russia Forward, Truth and Order, National Patriotic Bloc, Russia's Regions, and the Congress of Russian Communities.
Suffrage: Universal at 18 years.

Economy (1997 est.)

GDP: $452 billion.
Growth rate: 0.4%.
Per capita GDP (exchange rate method): $3,054.
Natural resources: Petroleum, natural gas, timber, furs, precious and nonferrous metals.
Agriculture: Grain, sugarbeets, sunflower seeds, meat, dairy products.
Industry: Complete range of manufactures--automobiles, trucks, trains, agricultural equipment, advanced aircraft, aerospace, machine and equipment products, mining and extractive industry, medical and scientific instruments, construction equipment.
Trade: Exports (f.o.b.) $87 billion--petroleum and petroleum products, natural gas, woods and wood products, metals, chemicals. Major markets--EU, NIS, China, Japan.
Imports (c.i.f.) $68 billion--machinery and equipment, chemicals, consumer goods, medicines, meat, sugar, semi-finished metal products. Major partners--EU, U.S., NIS, Japan, China.
Principal U.S. exports ($3.3 billion)--meat, machinery, tobacco.
Principal U.S. imports ($4.3 billion, a 21% increase from 1996)--aluminum, precious stones and metals, iron, and steel.

PEOPLE

Russia's area is about 6.5 million sq. mi. (17 million sq. km.). It is the largest country in the world by more than 2.5 million sq. mi. Its population density is about 23 people per square mile (9 per sq. km.), making it one of the most sparsely populated countries in the world. Its population is predominantly urban.

Most of the roughly 150 million Russians derive from the Eastern Slavic family of peoples, whose original homeland was probably present-day Poland. Russian is the official language of Russia, and an official language in the United Nations. As the language of writers such as Tolstoy, Dostoevsky, Chekov, Pushkin, and Solzhenitsyn, it has great importance in world literature.

Russia's educational system has produced nearly 100% literacy. About 3 million students attend Russia's 519 institutions of higher education and 48 universities. As a result of great emphasis on science and technology in education, Russian medical, mathematical, scientific, and space and aviation research is generally of a high order. The number of doctors in relation to the population is high by American standards, although medical care in Russia, even in major cities, is far below Western standards.

The Russian labor force is undergoing tremendous changes. Although well-educated and skilled, it is mismatched to the rapidly changing needs of the Russian economy. Millions of Russian workers are underemployed. Unemployment is highest among women and young people. As many as 6 million workers were temporarily furloughed in 1996. Many Russian workers compensate by working other part-time jobs. Following the collapse of the Soviet Union and the economic dislocation it engendered, the standard of living fell dramatically, but it has begun to recover.

Moscow is the largest city (population 9 million) and is the capital of the Federation. Moscow continues to be the center of Russian Government and is increasingly important as an economic and business center. It has become Russia's principal magnet for foreign investment and business presence. Its cultural tradition is rich, and visitors will find many museums devoted to art, literature, music, dance, history, and science. It has hundreds of churches and dozens of notable cathedrals.

St. Petersburg, established in 1703 by Peter the Great as the capital of the Russian Empire, was called Petrograd during World War I, and Leningrad after 1924. In 1991, as the result of a city referendum, it was renamed St. Petersburg. Under the tsars, the city was Russia's cultural, intellectual, commercial, financial, and industrial center. After the capital was moved back to Moscow in 1918, the city's political significance declined, but it remained a cultural, scientific, and military-industrial center. The Hermitage is one of the world's great fine arts museums. Finally, Vladivostok, located in the Russian Far East, is becoming an important center for trade with Pacific Rim countries.

HISTORY

Human experience on the territory of present-day Russia dates back to Paleolithic times. Greek traders conducted extensive commerce with Scythian tribes around the shores of the Black Sea and the Crimean region. In the third century B.C., Scythians were displaced by Sarmatians, who in turn were overrun by waves of Germanic Goths. In the third century AD, Asiatic Huns replaced the Goths and were in turn conquered by Turkic Avars in the sixth century. By the ninth century, Eastern Slavs began to settle in what is now Ukraine, Belarus, and the Novgorod and Smolensk regions.

In 862, the political entity known as Kievan Rus was established in what is now Ukraine and lasted until the 12th century. In the 10th century, Christianity became the state religion under Vladimir, who adopted Greek Orthodox rites. Consequently, Byzantine culture predominated, as is evident in much of Russia's architectural, musical, and artistic heritage. Over the next centuries, various invaders assaulted the Kievan state, and finally, Mongols under Batu Khan destroyed the main population centers except for Novgorod and Pskov and prevailed over the region until 1480.

In the post-Mongol period, Muscovy gradually became the dominant principality and was able, through diplomacy and conquest, to establish suzerainty over European Russia. Ivan III (1462-1505) was able to refer to his empire as "the Third Rome" and heir to the Byzantine tradition, and a century later the Romanov dynasty was established under Tsar Mikhail in 1613.

During Peter the Great's reign (1689-1725), Russia began modernizing, and European influences spread in Russia. Peter created Western-style military forces, subordinated the Russian Orthodox Church hierarchy to the Tsar, reformed the entire governmental structure, and established the beginnings of a Western-style education system. His introduction of European customs generated nationalistic resentments in society and spawned the philosophical rivalry between "Westernizers" and nationalistic "Slavophiles" that remains a key dynamic of current Russian social and political thought.

Peter's expansionist policies were continued by Catherine the Great, who established Russia as a continental power. During her reign (1762-96), power was centralized in the monarchy and administrative reforms concentrated great wealth and privilege in the hands of the Russian nobility.

Napoleon failed in his attempt in 1812 to conquer Russia after occupying Moscow; his defeat and the continental order that emerged following the Congress of Vienna (1814-15) set the stage for Russia and Austria-Hungary to dominate the affairs of eastern Europe for the next century.

During the 19th century, the Russian Government sought to suppress repeated attempts at reform from within. Its economy failed to compete with those of Western countries. Russian cities were growing without an industrial base to generate employment, although emancipation of the serfs in 1861 foreshadowed urbanization and rapid industrialization late in the century. At the same time, Russia expanded across Siberia until the port of Vladivostok was opened on the Pacific coast in 1860. The Trans-Siberian Railroad opened vast frontiers to development late in the century. In the 19th century, Russian culture flourished as Russian artists made significant contributions to world literature, visual arts, dance, and music.

Imperial decline was evident in Russia's defeat in the unpopular Russo-Japanese war in 1905. Subsequent civic disturbances forced Tsar Nicholas II to grant a constitution and introduce limited democratic reforms. The government suppressed opposition and manipulated popular anger into anti-Semitic pogroms. Attempts at economic reform, such as land reform, were incomplete.

1917 Revolution and the U.S.S.R.

The ruinous effects of World War I combined with internal pressures sparked the March 1917 uprising, which led Tsar Nicholas II to abdicate the throne. A provisional government came to power, headed by Aleksandr Kerenskiy. On November 7, 1917, the Bolshevik Party, led by Vladimir Lenin, seized control and established the Russian Soviet Federated Socialist Republic. Civil war broke out in 1918 between Lenin's "Red" army and various "White" forces and lasted until 1920, when, despite foreign interventions, the Bolsheviks triumphed. After the Red army conquered Ukraine, Belorussia, Azerbaijan, Georgia, and Armenia, a new nation was formed in 1922, the Union of Soviet Socialist Republics.

The U.S.S.R. lasted 69 years. In the 1930s, tens of millions of its citizens were collectivized under state agricultural and industrial enterprises. Millions died in political purges, the vast penal and labor system, or in state-created famines. During World War II, as many as 20 million Soviet citizens died. In 1949, the U.S.S.R. developed its own nuclear arsenal.

First among its political figures was Lenin, leader of the Bolshevik Party and head of the first Soviet Government, who died in 1924. In the late 1920s, Josif Stalin emerged as General Secretary of the Communist Party of the Soviet Union (CPSU) amidst intraparty rivalries; he maintained complete control over Soviet domestic and international policy until his death in 1953. His successor, Nikita Khrushchev, served as Communist Party leader until he was ousted in 1964. Aleksey Kosygin became Chairman of the Council of Ministers, and Leonid Brezhnev was made First Secretary of the CPSU Central Committee in 1964, but in 1971, Brezhnev rose to become "first among equals" in a collective leadership. Brezhnev died in 1982 and was succeeded by Yuriy Andropov (1982-84), Konstantin Chernenko (1984-85), and Mikhail Gorbachev, who resigned as Soviet President on December 25, 1991. On December 26, 1991, the U.S.S.R. was formally dissolved.

The Russian Federation

After the December 1991 dissolution of the Soviet Union, the Russian Federation became its largest successor state, inheriting its permanent seat on the United Nations Security Council, as well as the bulk of its foreign assets and debt.

Boris Yeltsin was elected President of Russia by popular vote in June 1991. By the fall of 1993, politics in Russia reached a stalemate between President Yeltsin and the parliament. The parliament had succeeded in blocking, overturning, or ignoring the President's initiatives on drafting a new constitution, conducting new elections, and making further progress on democratic and economic reforms.

In a dramatic speech in September 1993, President Yeltsin dissolved the Russian parliament and called for new national elections and a new constitution. The standoff between the executive branch and opponents in the legislature turned violent in October after supporters of the parliament tried to instigate an armed insurrection. Yeltsin ordered the army to respond with force to capture the parliament building (known as the White House).

In December 1993, voters elected a new parliament and approved a new constitution that had been drafted by the Yeltsin government. Yeltsin has remained the dominant political figure, although a broad array of parties, including ultra-nationalists, liberals, agrarians, and communists, have substantial representation in the parliament and compete actively in elections at all levels of government.

In late 1994, the Russian security forces launched a brutal operation in the Republic of Chechnya against rebels who were intent on separation from Russia. Along with their opponents, Russian forces committed numerous violations of human rights. The Russian Army used heavy weapons against civilians. Tens of thousands of civilians were killed and more than 500,000 displaced during the course of the war. The protracted conflict, which received close scrutiny in the Russian media, raised serious human rights and humanitarian concerns abroad as well as within Russia.

After numerous unsuccessful attempts to institute a cease-fire, in August 1996 the Russian and Chechen authorities negotiated a settlement that resulted in a complete withdrawal of Russian troops and the holding of elections in January 1997. The Organization for Security and Cooperation in Europe (OSCE) played a major role in facilitating the negotiation. A peace treaty was concluded in May 1997, and the two sides agreed to conclude a final settlement by 2001.

GOVERNMENT AND POLITICAL CONDITIONS

In the political system established by the 1993 constitution, the president wields considerable executive power. There is no vice president, and the legislative branch is far weaker than the executive. The president nominates the highest state officials, including the prime minister, who must be approved by the Duma. The president can pass decrees without consent from the Duma. He also is head of the armed forces and of the national security council.

Duma elections were in December 1995 and presidential elections June 1996. The Communist Party won a plurality of seats in the Duma; the pro-government party ("Our Home is Russia"), the liberal "Yabloko" bloc, and the nationalists also won substantial numbers of seats in the legislature. In the presidential election, Boris Yeltsin was reelected in the second round following a spirited campaign. Both the presidential and parliamentary elections were judged generally free and fair by international observers.

Russia is a federation, but the precise distribution of powers between the central government and the regional and local authorities is still evolving. The Russian Federation consists of 89 components, including two federal cities, Moscow and St. Petersburg. The constitution explicitly defines the federal government's exclusive powers, but it also describes most key regional issues as the joint responsibility of the federal government and the Federation components.

Judicial System

Russia's judiciary and justice system are weak. Numerous matters which are dealt with by administrative authority in European countries remain subject to political influence in Russia. The Constitutional Court was reconvened in March 1995 following its suspension by President Yeltsin in October 1993. The 1993 constitution empowers the court to arbitrate disputes between the executive and legislative branches and between Moscow and the regional and local governments. The court also is authorized to rule on violations of constitutional rights, to examine appeals from various bodies, and to participate in impeachment proceedings against the president. The July 1994 Law on the Constitutional Court prohibits the court from examining cases on its own initiative and limits the scope of issues the court can hear.

In the past 3 years, the Russian Government has begun to reform the criminal justice system and judicial institutions, including the reintroduction of jury trials in certain criminal cases. Despite these efforts, judges are only beginning to assert their constitutionally mandated independence from other branches of government.

Human Rights

Russia's human rights record remains uneven. Despite significant improvements in conditions following the end of the Soviet Union, some problem areas remain. Although the government has made progress in recognizing the legitimacy of international human rights standards, the institutionalization of procedures to safeguard these rights has lagged. Implementation of the constitutional provisions for due process and timely trials, for example, has made little progress. In addition, the judiciary is often subject to manipulation by political authorities and is plagued by large case backlogs and trial delays. Lengthy pretrial detention remains a serious problem. There are credible reports of law enforcement and correctional officials beating and torturing inmates and detainees. Prison conditions fall well below international standards and, according to human rights groups, in 1996 between 10,000 and 20,000 prisoners and detainees died, most because of overcrowding, disease, and lack of medical care.

Efforts to institutionalize official human rights bodies have been mixed. In 1996, human rights activist Sergey Kovalev resigned as chairman of the Presidential Human Rights Commission to protest the government's record, particularly the war in Chechnya. Parliament in 1997 passed a law establishing a "human rights ombudsman," a position that is provided for in Russia's constitution and is required of members of the Council of Europe, to which Russia was admitted in February 1996. The Duma, however, has been unable to agree on a candidate to fill this position. International human rights groups operate freely in Russia, although the government did hinder the movement and access to information of some individuals investigating the war in Chechnya.

The case against environmentalist and former Soviet Navy Captain Aleksandr Nikitin raises questions about Russia's commitment to international standards of human rights. Nikitin was arrested in early 1996 for his role in publishing a report on the nuclear hazards posed by the decaying Russian Northern Fleet. The prosecution's case is based on secret decrees, which were issued after Nikitin's arrest and released to Nikitin and his attorney only after the trial began.

The Russian Constitution provides for freedom of religion and the equality of all religions before the law as well as the separation of church and state. Although Jews and Muslims continue to encounter prejudice and societal discrimination, they have not been inhibited by the government in the free practice of their religion. High-ranking federal officials have condemned anti-Semitic hate crimes, but law enforcement bodies have not effectively prosecuted those responsible. The influx of missionaries over the past several years has led to pressure by groups in Russia, specifically nationalists and the Russian Orthodox Church, to limit the activities of these "nontraditional" religious groups. In response, the Duma passed a new, restrictive, and potentially discriminatory law in October 1997. The law is very complex, with many ambiguous and contradictory provisions. The law's most controversial provisions separate religious "groups" and "organizations" and introduce a 15-year rule, which allows groups that have been in existence for 15 years or longer to obtain accredited status.

The constitution guarantees citizens the right to choose their place of residence and to travel abroad. Some big-city governments, however, have restricted this right through residential registration rules that closely resemble the Soviet-era "propiska" regulations. Although the rules were touted as a notification device rather than a control system, their implementation has produced many of the same results as the propiska system. The freedom to travel abroad and emigrate is respected although restrictions may apply to those who have had access to state secrets. Recognizing this progress, since 1994, President Clinton has found Russia to be in full compliance with the provisions of the Jackson-Vanik amendment.

Principal Government Officials

President--Boris Yeltsin
Prime Minister--Yevgeniy Primakov

First Deputy Prime Ministers
Economy--Yuriy Maslyukov
State Building, National, Regional and Youth Policies, Problems of the Russian North--Vadim Gustov

Deputy Prime Ministers

Industry and Communications--Vladimir Bulgak
Agriculture--Gennadiy Kulik
Social Problems--Valentina Matviyenko

Key Ministers

Agriculture--Viktor Semyonov
Atomic Energy--Yevgeniy Adamov
Civil Defense--Sergey Shoygu
Culture--Vladimir Yegorov
Defense--Igor Sergeyev
Economic Affairs--Andrey Shapovalyants
Education--Vladimir Filipov
Finance--Mikhail Zadornov
Foreign Affairs--Igor Ivanov
Fuel and Energy--Sergey Generalov
Health--Vladimir Starodubov
Industry and Trade--Georgiy Gabuniya
Internal Affairs--Sergey Stepashin
Justice--Pavel Krasheninnikov
Labor and Social Policy-- Sergey Kalashinkov
Land Policy, Construction, and Utilities--(vacant)
Natural Resources--Viktor Orlov
Railways--Nikolay Aksyonenko
National Policies--Ramazan Abdulatipov
Regional Policies--Valeriy Kirpichnikov
Science and Technology--Mikhail Kirpichnikov
State Property--Farid Gazizullin
Transport--Sergey Frank

Ambassador to the U.S.--Yuliy Vorontsov
Ambassador to the United Nations--Sergey Lavrov

The Russian Federation maintains an embassy at 2650 Wisconsin Ave. NW, Washington, DC 20007 (tel. 202-298-5700) and a consular section at 2641 Tunlaw Road, Washington DC (tel. 202-939-8907/8913/8918). Russian consulates also are located in New York, San Francisco, and Seattle.

ECONOMY

The Russian economy has undergone tremendous stress as it has moved from a centrally planned economy toward a free market system. Difficulties in implementing fiscal reforms aimed at raising government revenues and a dependence on short-term borrowing to finance budget deficits led to a serious financial crisis in 1998. Lower prices for Russia's major export earners (oil and minerals) and a loss of investor confidence due to the Asian financial crisis exacerbated financial problems. The result was a rapid decline in the value of the ruble, flight of foreign investment, delayed payments on sovereign and private debts, a breakdown of commercial transactions through the banking system, and the threat of run-away inflation.

Gross Domestic Product

Russia's GDP, estimated at $452 billion in 1997, is believed to have declined by as much as 9.9% from September 1997 to September 1998. By October 1998, unemployment had crept up from 9% to 11.5% (using International Labor Organization methodologies). Combined unemployment and underemployment may reach 20%. The government has been slow to respond to the unfolding crisis and has yet to announce clear policies for getting on a path to growth.

Monetary Policy

Despite a $22 billion assistance package from the International Monetary Fund negotiated in July 1998, by August 17, 1998 the government was effectively unable to support the value of the ruble, which subsequently declined in value by 50%. As of October 1998, the exchange rate had fallen to a rate of approximately 17 rubles/dollar compared to 6.5 rubles/dollar in August. The resulting increase in import prices pushed inflation to 45% in the first 3 weeks of September 1998. The government has promised to pay at least part of the massive wage and pension arrears it has accumulated over the past few years. Faced with declining revenues and a growing budget deficit, the government may be tempted to fulfill its promises by increasing the money supply in an inflationary manner.

Government Spending/Taxation

A revenue shortage continues to plague the government. This shortage is attributable to weak tax administration, a cumbersome tax system with high rates that provoke evasion, falling industrial output, increasing use of barter in the economy, and blunt refusal to pay by large, politically powerful firms. Since 1991, the government has tried to minimize its budget deficits by sequestering payments for wages and pensions. The potential budget deficit for fourth quarter 1998 is estimated at 9% of GDP.

Law

Lack of legislation in many areas of economic activity is a pressing issue. Taxation and business regulations are unpredictable, and legal enforcement of private business agreements is weak. Government decisions affecting business often have been arbitrary and inconsistent. Crime has increased costs for both local and foreign businesses. On the positive side, Russian businesses are increasingly turning to the courts to resolve disputes. The passage of an improved bankruptcy code in January 1998 and major portions of a new tax code in July 1998 were positive steps.

Natural Resources

The mineral-packed Ural mountains and the vast oil, gas, coal and timber reserves of Siberia and the Russian Far East make Russia rich in natural resources. However, most such resources are located in remote and climactically unfavorable areas that are difficult to develop and far from Russian ports. Oil and gas exports continue to be the main source of hard currency, but declining energy prices have hit Russia hard. Russia is a leading producer and exporter of minerals, gold, and all major fuels. The Russian fishing industry is the world's fourth-largest, behind Japan, the U.S., and China. Russia accounts for one-quarter of the world's production of fresh and frozen fish and about one-third of world output of canned fish.

Industry

Russia is one of the most industrialized of the former Soviet Republics. However, much of its industry is antiquated and highly inefficient. Besides its resource-based industries, it has developed large manufacturing capacities, notably in machinery. Russia inherited most of the defense industrial base of the Soviet Union. Efforts have been made with varying success over the past few years to convert defense industries to civilian use.

Agriculture

Russia comprises roughly three-quarters of the territory of the former Soviet Union, but has relatively little area suited for agriculture because of its arid climate and inconsistent rainfall. Northern areas concentrate mainly on livestock and the southern parts and western Siberia produce grain. Restructuring of former state farms has been an extremely slow process, partially due to the lack of a land code allowing for the free sale, purchase, and mortgage of agricultural land. Private farms and garden plots of individuals account for more than one-half of all agricultural production.

Investment

The economic turmoil of 1998 has most new foreign investment on hold. The Russian Government estimated that cumulative foreign investment in Russia increased 60% in 1997 to US $10.7 billion. Foreign investment in Russia was heavily weighted to portfolio investment, with direct investment equaling about $3.9 billion. The United States was Russia's top source of foreign investment. Foreign investors pulled a significant portion of their portfolio investment out of the Russian market in 1998. The Russian stock market lost more than 90% of its value from January to October 1998.

Even before the current difficulties, foreign investment in Russia paled in comparison to investment in other transition economies, such as Poland and Hungary. Russian domestic investment dropped 7% in the first quarter of 1998. Low levels of domestic investment continue to be one of the greatest obstacles to renewed economic growth.

Trade

Germany is Russia's largest trading partner, followed by Ukraine and the United States. Trade with other NIS states is overwhelmingly in energy and industrial products, and in many instances is conducted by barter. Fairly healthy trade surpluses ($36.8 billion in 1997) eroded over the course of 1998. Imports to Russia grew by 10-15% per year in 1995-97, as consumers benefited from an appreciating ruble and a rising average wage (in rubles). At the same time, export revenues were falling, due in particular to sharply lower prices for oil and gas (accounting for 43% of merchandise exports in 1997). Moreover, Russia's manufactured exports compete poorly on the world market, especially since Asian goods have become less expensive following steep currency devaluations.

The recent devaluation of the ruble and difficulties in completing transactions through the Russian banking system have reduced imports substantially. The combination of import duties, a 20% value-added tax, excise taxes on imported goods (especially automobiles, alcoholic beverages, and aircraft), and an import licensing regime for alcohol further restrain demand for imports. Frequent changes in customs regulations also have created problems for foreign and domestic traders and investors.

FOREIGN RELATIONS

Russia has taken important steps to become a full partner in the world's principal political groupings. On December 27, 1991, Russia assumed the seat formerly held by the Soviet Union in the UN Security Council. Russia also is a member of the Organization for Security and Cooperation in Europe (OSCE) and the North Atlantic Cooperation Council (NACC). It signed the NATO Partnership for Peace initiative on June 22, 1994. On May 27, 1997, NATO and Russia signed the NATO-Russia Founding Act, which provides the basis for an enduring and robust partnership between the Alliance and Russia--one that can make an important contribution to European security architecture in the 21st century. On June 24, 1994, Russia and the European Union (EU) signed a partnership and cooperation agreement.

Russia has played an important role in helping to mediate international conflicts through its cosponsorship of the Middle East peace process and its support of UN and multilateral initiatives in the Persian Gulf, Cambodia, Angola, the former Yugoslavia, and Haiti. Russia is a member of the Contact Group; it has contributed troops to the NATO-led stabilization force in Bosnia. Russia has affirmed its respect for international law and OSCE principles. It has accepted UN and/or OSCE involvement in instances of regional conflict in neighboring countries, including the dispatch of observers to Georgia, Moldova, Tajikistan, and Nagorno-Karabakh.

DEFENSE

Since the breakup of the U.S.S.R., the Russians have discussed rebuilding a viable, cohesive fighting force out of the remaining parts of the former Soviet armed forces. A new Russian military doctrine, promulgated in November 1993, implicitly acknowledges the contraction of the old Soviet military into a regional military power without global imperial ambitions. In keeping with its emphasis on the threat of regional conflicts, the doctrine calls for a Russian military that is smaller, lighter, and more mobile, with a higher degree of professionalism and with greater rapid deployment capability. Such a transformation has proven difficult.

The challenge of this task has been magnified by difficult economic conditions in Russia, which have resulted in reduced defense spending. This has led to training cutbacks, wage arrears, and severe shortages of housing and other social amenities for military personnel, with a consequent lowering of morale, cohesion, and fighting effectiveness. The poor combat performance of the Russian armed forces in the Chechen conflict in part reflects these breakdowns.

The actual strength of the Russian armed forces probably falls between 1.4 and 1.6 million and is scheduled to fall to 1.2 million by the end of 1999. Weapons production in Russia has fallen dramatically over the past few years; between 1988 and 1993, it fell by at least 50% for virtually every major weapons system. Weapons spending in 1992 was approximately 75% less than in 1988. Almost all of Russia's arms production is for sales to foreign governments, and procurement of major end-items by the Russian military has all but stopped.

About 70% of the former Soviet Union's defense industries is located in the Russian Federation. A large number of state-owned defense enterprises are on the brink of collapse as a result of cuts in weapons orders and insufficient funding to shift to production of civilian goods while at the same time trying to meet payrolls. Many defense firms have been privatized; some have developed significant partnerships with U.S. firms.

U.S.- RUSSIA RELATIONS

The United States remains committed to maintaining a constructive relationship with Russia in which it seeks to expand areas of cooperation and effectively work through differences. The United States continues to support Russia's political and economic transformation and its integration into major international organizations. These steps, in conjunction with achievements in considerably reducing nuclear weapons, have greatly enhanced the security of the United States.

The intensity and frequency of contacts between President Yeltsin and President Clinton--in Helsinki, Finland and Paris, France in 1997 and in Denver, Colorado and Birmingham, England in 1998--are indicative of the strong commitment to working together on a broad range of issues. These include European security, reducing the threat to both countries posed by weapons of mass destruction, and economic cooperation, especially American investment in Russia.

Economic Relations

Under the leadership of Vice President Gore and the Russian Prime Minister, the U.S. and Russia are working to advance bilateral cooperation through nine working committees and several working groups known collectively as the U.S.-Russian Joint Commission on Economic and Technological Cooperation. Committees address issues in the fields of science and technology, business development, space, energy policy, environmental protection, health, defense conversion, capital markets, and agriculture. In addition, the commission provides a forum for high-level discussions of priority security and economic issues. The commission held its 10th session in Washington in March 1998 and an executive session in Moscow in May 1998.

At the March 1997 summit in Helsinki, Finland, Presidents Clinton and Yeltsin emphasized the need to expand trade and investment. They signed a joint "Economic Initiative" aimed at stimulating Russian economic growth, deepening bilateral economic ties, and accelerating Russian integration into the global economy and its primary multilateral organizations. Both governments announced a special "Regional Investment Initiative" to create a climate for private investment in Russia's regions and attract foreign and domestic capital. As part of this initiative, several progressive regions with investment potential will be selected where the U.S. will focus its assistance activities to foster a better business and investment climate. These regions will, in turn, serve as models of what can be achieved by an intensive effort to improve the investment climate. As of spring 1998, Novgorod Oblast, Samara Oblast and the Russian Far East, with a focus on Khabarovsk Kray and Sakhalin Oblast, have been chosen as initiative sites.

In 1997, the U.S. trade deficit with Russia was $1 billion, an increase of $780 million from the U.S. trade deficit of $221 million in 1996. U.S. merchandise exports to Russia were nearly $3.3 billion in 1997. Russia was the United States' 35th-largest export market in 1997. U.S. imports from Russia were nearly $4.3 billion in 1997. The 1992 U.S.-Russia trade agreement provides mutual most-favored-nation status and includes commitments on intellectual property rights protection. In 1992, the two countries also signed treaties on the avoidance of double taxation and on bilateral investment. By spring 1998, however, the Russian parliament had not ratified the bilateral investment treaty. It has been ratified by the U.S. Senate.

The U.S. actively supports Russia's efforts to join the World Trade Organization on commercially viable terms. Consultations to review Russia's tariff offer on goods have already begun. As of spring 1998, Russia must still submit market access offers on services. The U.S. actively supported Russian membership in the Asia-Pacific Economic Cooperation (APEC) forum. Russia will become a member of APEC in November 1998.

Security Cooperation

Russia signed the NATO Partnership for Peace initiative in June 1994. U.S. and Russian troops served together in the Implementation Force in Bosnia and continue to do so in its successor, the Stabilization Force. Building on these steps, NATO and Russia signed the NATO-Russia Founding Act on May 27, 1997, in Paris. The act defines the terms of a fundamentally new and sustained relationship in which NATO and Russia will consult and coordinate regularly and, where appropriate, act jointly. Cooperation between NATO and Russia exists in scientific and technical fields.

The U.S. and Russia signed a memorandum of understanding on defense cooperation in September 1993 that institutionalized and expanded relations between defense ministries, including establishing a broad range of military-to-military contacts. The U.S. and Russia carried out a joint peacekeeping training exercise in Totskoye, Russia, in September 1994. Based on the January 14, 1994, agreement between Presidents Clinton and Yeltsin, the two nations stopped targeting their strategic nuclear missiles at each other as of May 30, 1994. U.S. and Russian security cooperation emphasizes strategic stability, nuclear safety, dismantling nuclear weapons, preventing proliferation of weapons of mass destruction and their delivery systems, and enhancing military-to-military contacts. At the Lisbon OSCE summit in 1992, the United States signed a protocol to the START I Treaty with Russia, Belarus, Kazakhstan, and Ukraine--where the strategic nuclear weapons of the former Soviet Union were located--making the four countries party to the treaty and committing all signatories to reductions in strategic nuclear weapons within the 7-year period provided by the treaty. The treaty entered into force December 5, 1994.

On January 3, 1993, the U.S. and Russia signed the Treaty between the United States of America and the Russian Federation on Further Reduction and Limitation of Strategic Offensive Arms (START II). This treaty would reduce overall deployments of strategic nuclear weapons on each side by more than two-thirds from current levels and will eliminate the most destabilizing strategic weapons--heavy intercontinental ballistic missiles (ICBMs) and all other deployed multiple-warhead ICBMs. At the September 1994 summit, the two nations agreed to begin removing nuclear warheads due to be scrapped under START II immediately, once START I takes effect and the START II Treaty is ratified by both countries, instead of taking the 9 years allowed. At their May 1995 summit, Presidents Clinton and Yeltsin agreed on a set of principles that would guide further discussion in the field of demarcation between anti-ballistic missile systems and theater missile defenses. They also agreed on steps to increase the transparency and irreversibility of nuclear arms reduction and committed not to use newly produced fissile materials or to reuse the fissile materials removed from nuclear weapons being eliminated and excess to national security requirements in nuclear weapons. The Russian Duma has not yet ratified START II. Since that time, all strategic nuclear weapons have been removed from Ukraine, Belarus, and Kazakhstan to Russia.

Following ratification by Russia and the other NIS, the Conventional Armed Forces in Europe Treaty entered into force on November 9, 1992. This treaty establishes comprehensive limits on key categories of military equipment--tanks, artillery, armored combat vehicles, combat aircraft, and combat helicopters--and provides for the destruction of weaponry in excess of these limits.

Cooperative Threat Reduction assistance, often called Nunn-Lugar assistance, is provided to Russia (as well as Belarus, Kazakhstan, and Ukraine) to aid in the dismantling of weapons of mass destruction and to prevent the proliferation of such weapons. More than $730 million has been allocated for assistance to Russia during fiscal years 1997 and 1998 under this program, and 13 implementing agreements have been signed. Key projects have included assistance in the elimination of strategic offensive arms ($184 million), design and construction of a fissile material storage facility ($127 million), provision of fissile material containers ($45 million), material control and accounting and physical protection of nuclear materials ($51 million), and development of a chemical weapons destruction facility and provision of equipment for a pilot laboratory for the safe and secure destruction of chemical weapons ($106 million).

Under the CTR program, the U.S. also is assisting Russia in the development of export controls, providing emergency response equipment and training to enhance Russia's ability to respond to accidents involving nuclear weapons, providing increased military-to-military contacts, and encouraging the conversion of Russian defense firms through the formation of joint ventures to produce products for the civilian market.

In a multilateral effort (the European Union, Japan, and Canada also are involved), the U.S. also has provided more than $60 million to establish and support the International Science and Technology Center (ISTC), which provides alternative peaceful civilian employment opportunities to scientists and engineers of the former Soviet Union involved with weapons of mass destruction and their delivery systems.

U.S. Assistance to Russia

Since 1992, the U.S. Government has allocated more than $5 billion in aid to Russia, funding a variety of programs in the following key areas: private sector development, privatization and enterprise restructuring, trade and investment, democratic reform, energy, health care, housing, and the environment. Humanitarian assistance represented a major portion of U.S. aid during the initial transition phase in Russia, when there was a pressing need for food, medicine, and other essential commodities. However, this early focus on urgent humanitarian needs shifted in the mid-1990s toward technical assistance supporting macroeconomic reforms. In 1997, the U.S. began moving toward cooperation under the Partnership for Freedom, emphasizing trade and investment, people-to-people linkages, and U.S.-Russian partnerships. Efforts now concentrate on limited technical assistance, citizen exchanges and partnerships, and direct support for trade and investment.

The U.S. Government transports to Russia food, medical equipment, and other humanitarian assistance donated by U.S. private voluntary organizations, as well as Defense Department excess commodities. U.S. Government-funded security programs eliminate weapons of mass destruction, demilitarize facilities, prevent proliferation, enable compliance with arms accords, enhance Russia's ability to control nuclear materials, and employ former weapons scientists who might otherwise help pariah states. A substantial but declining portion of economic assistance is targeted on central government reforms, particularly tax reforms, and fostering a transparent legal and regulatory environment. An increasing share is directed away from the central government to support economic reform outside Moscow. Democracy programs help Russians develop the building blocks of a democratic society based on the rule of law, including non-governmental organizations (NGOs), independent media, and an independent judiciary. To support this long-term generational transition, the U.S. Government is increasingly promoting links between U.S. and Russian communities and institutions, including universities, hospitals, and professional associations. The U.S. Government also is helping Russia combat crime and corruption through cooperation with U.S. law enforcement agencies and community groups.

The more than $5 billion in grant assistance provided by the U.S. Government to date can be divided into the following categories: more than $500 million in democracy reform programs, more than $1.5 billion in economic and technical assistance, more than $1.4 billion in humanitarian and food assistance, and more than $1.7 billion in security and weapons dismantlement assistance. The U.S. Government also has supported more than $7.3 billion in commercial financing and insurance for Russia. The annual level of economic and technical assistance for Russia has declined from a peak of $1.6 billion in FY 1994 to $130 million in FY 1998.

The Regional Investment Initiative (RII) focuses on reducing barriers to trade and investment, establishing ongoing U.S.-Russian partnerships, and spurring the private sector as the engine of economic growth. Three RII sites are up and running: Novgorod, Samara, and Khabarovsk/Sakhalin, in the Russian Far East. At each site, the private sector, NGOs, and local governments cooperate on programs that include investment promotion, small business training and finance, and health, educational and professional partnerships.

Implementing Agencies

U.S. Agency for International Development (USAID) has implemented the lion's share of U.S. Government-funded technical assistance to Russia--more than $1.6 billion since 1992. USAID has devoted its assistance efforts to helping Russia develop democratic institutions and transform its state-controlled economy to one based on market principles. USAID has been active in the areas of privatization and private sector development, agriculture, energy, housing reform, health, environmental protection, economic restructuring, independent media, elections, and the rule of law.

Some 26,000 Russians have traveled to the United States on U.S. Information Agency (USIA) -funded exchanges since 1992. USIA public diplomacy in Russia is helping to promote the growth of democracy and civil society, encouraging economic reform and growth of a market economy, explaining and building support for U.S. foreign policy objectives, and building understanding of U.S. society and culture. USIA's professional and academic exchanges cover such diverse fields as journalism, public administration, local government, business management, education, political science, and civic education.

The U.S. Department of Commerce's American Business Centers (ABCs) are operating in St. Petersburg, Novosibirsk, Volgograd, Nizhny Novgorod, Yekaterinburg, Khabarovsk, Vladivostok, Yuzhno-Sakhalinsk, and Chelyabinsk to help U.S. companies do business in Russia. The Commerce Department also has established a Special American Business Internship Program (SABIT) in Russia, which places Russian managers in short-term internships at U.S. companies. The Commerce Department also operates the Business Information Service for the New Independent States (BISNIS), which provides market information, trade leads, and partnering services to U.S. companies interested in the Russian market.

The U.S. Export-Import Bank (Eximbank) has approved about $3.4 billion in loans, loan guarantees, and insurance for transactions in Russia since 1991. Of this total, more than $1 billion was approved under its Oil and Gas Framework Agreement.

The U.S. Overseas Private Investment Corporation (OPIC) provides loans, loan guarantees, and political investment insurance to American companies investing in Russia.

The Trade and Development Agency (TDA) has approved approximately $51 million in funding for feasibility studies on more than 130 investment projects.

U.S. Department of Agriculture coordinates a variety of technical assistance and exchange activities under its Emerging Markets Program, including the Cochran Fellowship Program which brings Russian agriculturists to the United States for short-term training. These projects are aimed at increasing U.S. agricultural exports to Russia, while helping the Russian agricultural sector learn about Western-style agribusiness management, marketing, and other issues.

The Eurasia Foundation, a private, non-profit, grant-making organization supported by the U.S. Government and private foundations, has awarded more than 1,600 grants totaling more than $35 million to Russian non-governmental organizations and U.S.-Russian NGO partnerships since 1993. The Foundation's grants have been targeted at three main programmatic areas: economic reform, governmental reform and the non-profit sector, and media and communications.

Principal U.S. Embassy Officials

Ambassador--James F. Collins
Deputy Chief of Mission--John F. Tefft
Counselor for Political Affairs--John M. Ordway
Counselor for Economic Affairs--Michael Matera
Counselor for Commercial Affairs--John Peters
Counselor for Consular Affairs--Susan Wood
Counselor for Administrative Affairs--John O'Keefe
Counselor for Public Affairs--Robert R. Gosende
Director, U.S. Agency for International Development--Janet Valentine
Immigration and Naturalization Service--Anne Corsano
Department of Energy--Robin J. Copeland
National Aeronautics and Space Administration (NASA)--Douglas Englund

The U.S. embassy in Russia is located at Novinskiy Bulvar 19/23, Moscow (tel. [7](095) 252-2451 through 59; fax: [7] (095) 956-4261).

Consulates General are in the following cities: St. Petersburg (Furshtatskaya Ulitsa 15, tel. [7] (812) 275-1701); Vladivostok (Mordovtseva Ulitsa 12, tel. [7] (4232) 268-458/554); and Yekaterinburg (tel. [7] (3432) 60-11-43)

In Moscow, the U.S. Commercial Office is located at Novinskiy Bulvar 15 (tel. [7] (095) 255-4848/4660 or 9564255, fax: [7] (095) 230-2101). In St. Petersburg, the U.S. Commercial Office is located at Bolshaya Morskaya Ulitsa 57 (tel. [7] (812) 110-6042, fax: [7] (812) 1106479).

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides Travel Warnings and Consular Information Sheets. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Consular Information Sheetsexist for all countries and include information on immigration practices, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the country. Public Announcements are issued as a means to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas which pose significant risks to the security of American travelers. Free copies of this information are available by calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-on-demand system: 202-647-3000. Travel Warnings and Consular Information Sheets also are available on the Consular Affairs Internet home page: http://travel.state.gov and the Consular Affairs Bulletin Board (CABB). To access CABB, dial the modem number: (301-946-4400 (it will accommodate up to 33,600 bps), set terminal communications program to N-8-1 (no parity, 8 bits, 1 stop bit); and terminal emulation to VT100. The login is traveland the password is info (Note: Lower case is required). The CABB also carries international security information from the Overseas Security Advisory Council and Department's Bureau of Diplomatic Security. Consular Affairs Trips for Travelers publication series, which contain information on obtaining passports and planning a safe trip abroad, can be purchased from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225. For after-hours emergencies, Sundays and holidays, call 202-647-4000.

Passport Services information can be obtained by calling the 24-hour, 7-day a week automated system ($.35 per minute) or live operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648)

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877 FYI-TRIP (877 394-8747) gives the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. This information is also available on the Web at http://www.cdc.gov/travel/index.htm. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register at the U.S. embassy upon arrival in a country (see "Principal U.S. Embassy Officials" listing in this publication). This may help family members contact you in case of an emergency.

Further Electronic Information:

Department of State Foreign Affairs Network. Available on the Internet, DOSFAN provides timely, global access to official U.S. foreign policy information. Updated daily, DOSFAN includes Background Notes; Dispatch, the official magazine of U.S. foreign policy; daily press briefings; Country Commercial Guides; directories of key officers of foreign service posts; etc. DOSFAN's World Wide Web site is at http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published annually by the U.S. Department of State, USFAC archives information on the Department of State Foreign Affairs Network, and includes an array of official foreign policy information from 1990 to the present. Contact the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information. [End of Document]

DOSFAN Home Page.
Bureau of European and Canadian Affairs Home Page
Index of Background Notes for European countries and Canada and the New Independent States