BASIC INFORMATION

Full Country Name: Russia


Country Profile:

Area: 17,075,400 square kilometres
Population: 143,500,000 (2005)
Capital City: Moscow
People: 81.5% Russians, Tatars 3.8%, Ukrainian 3% (more than 100 nationalities in all)
Languages: Russian, other.
Religion(s): Orthodox Christian, Muslim, Jewish and Buddhist.
Currency: 1 Rouble = 100 Kopeks
Major political parties: United Russia, Communist Party, Liberal Democratic Party, Just Russia.
Government: Democratic Federation.
Head of State: President Vladimir Putin
Prime Minister/Premier: Mikhail Fradkov
Foreign Minister: Sergei Lavrov

GEOGRAPHY

is the largest country in the world, spanning 11 time zones. The landscape varies widely, from vast open tracts in the European heartlands and the taiga and tundra of Siberia, to mountainous terrain. Agriculture is largely confined to the European regions and the southern belt of Siberia. Further north, the main industries are forestry and extraction of energy and minerals.

The main communications across the country are by air, and the Trans-Siberian railway. The road system is not well developed countrywide. 's great rivers also play an important part in transportation as well as in hydroelectric power generation.

's population is small relative to its size, and unevenly distributed, with the vast bulk in the European areas and the Ural regions. In inhospitable regions e.g. the far north and much of Siberia, population density is often less than 1 person per square kilometre.

HISTORY

The origins of the Russian states as we now know it can be traced back to the sixteenth century when the trading principality of Muscovy emerged as the dominant player among a number of small principalities and fiefdoms. Ivan IV (Ivan the Terrible, 1533-1584) was the first prince of Muscovy to style himself as Tsar. After his death, the Romanov family emerged as 's leaders in the early 17th century, and ruled for the next 300 years. Perhaps the best known of the Romanovs are Peter the Great (1682-1725) and Catherine the Great (1762-1796), who in their different times arguably did most to reform and modernise the country.

Bolshevik Revolution

By the early 20th century, discontent at all levels of Russian society was high. Harsh working conditions in the newly industrialised cities, coupled with an absolutist monarchy which was perceived as being indifferent to the suffering of the mass of the population, created conditions which were ripe for the growth of political radicalism. In 1903 a schism in the Russian Social Democrats led to the emergence of the Bolshevik Party, led by Lenin, which was inspired by an extremist interpretation of certain European models of socialism. Dissatisfaction grew following the Bloody Sunday Massacre in 1905, defeat in the Russo-Japanese War and the disastrous course of 's involvement in the First World War. By 1917 the Bolsheviks were in a position to seize political control from the recently installed Provisional Government in an opportunistic and fairly bloodless coup. The following year, withdrew early from the First World War with the costly Treaty of Brest-Litovsk and deposed Tsar Nikolai II and his family were shot.

The early years of Bolshevik rule were marked by civil war and mass starvation. While within the party there was considerable rivalry for power in Lenin’s later years, when he was largely incapacitated, it wasn't until 1929 that Stalin emerged as the undisputed leader of the Communist Party. Once in place, his leadership came to be characterised by the use of political purges, mass deportation and imprisonment on an unprecedented scale as means of control. In June 1941 invaded the , triggering a four year war during which up to 27 million Soviet citizens died. Yet emerged from the war victorious and having secured effective political control over most of Eastern Europe. Stalin remained firmly in control until his death in 1953, although he became increasingly paranoid and reclusive. During this period the Communist Party consolidated its hold on every aspect of life by means of a vast security apparatus. The had become an industrial and military superpower, although at an immense human cost.

Soviet Union

Khrushchev, Stalin's successor, made some efforts to address the worst excesses of Stalin's rule, while preserving the key elements of Communism. He eased censorship and fostered a foreign policy of peaceful co-existence with the West, while, in the Hungarian Uprising of 1956, maintaining strong control over the Soviet satellite states. But the Party establishment distrusted him and he lost further credibility over his handling of the 1962 Cuban Missile Crisis. He was deposed in 1964 in a political coup. Brezhnev, his successor, presided over a period of consolidation. Life became more predictable and comfortable for the bulk of the population. But despite efforts to improve the economy, growth rates steadily declined and social problems grew. During this period, the Soviet Union became involved in a prolonged and bloody occupation of . By the early 1980s, there was a general feeling that the Soviet economy and society was stagnating and the more forward-looking elements in the Party were acknowledging privately that they could not carry on like this. However, Brezhnev's immediate successor, Andropov, who might otherwise have brought in reform, died shortly after taking up office.

Gorbachev

After Gorbachev's arrival in power in 1985 he rapidly began his campaign of perestroika (restructuring), liberalising both the economy and the political system. Gorbachev’s goal was to build a better form of socialism. Gradually, however, the very process of democratisation and glasnost (openness) took on a pace of its own. Gorbachev made it clear that he would not intervene in the internal affairs of the Eastern European satellite states, which prompted widespread protest movements that quickly brought about the collapse of unpopular communist governments which had previously relied on the threat of Soviet military support. At the same time, pressure was growing among the republics of the for greater sovereignty, and in 1990 the republic within the (headed by Yeltsin) declared its independence in a symbolic gesture. In August 1991, a coup was mounted against Gorbachev by a group of Communist Party hard-liners seeking to stop the fragmentation of the . Yeltsin supported Gorbachev and the coup was defeated. But when Gorbachev returned to Moscow from the south where he had been under house arrest, it became clear that Yeltsin held the political initiative, and many of the other republics of the hastened to declare their independence. By the end of 1991 the dissolution of the left Gorbachev with no option but to resign as its President.

Yeltsin

Yeltsin launched an agenda for 's transition to a democratic, market-based form of government. But the lack of any clear strategy, mounting political opposition, and his own failing health, all made this more difficult. In 1992, Acting Prime Minister Yegor Gaidar began a programme of radical economic reforms, known as ‘shock therapy’, such as measures to cut subsidies and de-regulate prices. These quickly ran into stiff opposition, however, and change was as a result much more gradual and patchy than many had hoped. The exception was the field of privatisation where huge strides forward were taken between 1992 and 1994 to create the bases of a privately owned economic system. was also hamstrung by a constitutional crisis in 1992 and 1993, with Yeltsin contesting power with the Russian Parliament. In September 1993 Yeltsin finally sought to break the impasse, dissolving the Parliament and calling for fresh elections. When Parliamentary supporters took to the streets in violent protest, Yeltsin famously ordered tanks to fire on the White House, which broke the deadlock, but left deep political scars.

Out of that debacle a new Constitution and political institutions emerged. The period between 1993 and 1996 was, however, highlighted by political instability, the war in and continuing economic difficulties. By 1996 Yeltsin's popularity ratings were in single figures. He was re-elected that year when the Russian Establishment combined only to prevent a return of the Communists to power. His second term was crippled by severe economic problems, which in August 1998 culminated in the formal devaluation of the rouble and a decision to default on it’s rouble debts. A rapid turnover of Prime Ministers illustrated Yeltsin's increasingly desperate attempts to find a candidate he thought suitable to replace him. He installed Vladimir Putin as Prime Minister in the summer of 1999 and resigned on 31 December 1999, before the official end of his presidential term.

POLITICS

The () is recognised in international law as continuing the legal personality of the former Soviet Union (USSR) which was dissolved on 31 December 1991. The is currently divided into 85 administrative units known as 'federal subjects'. This includes 21 republics linked to non-Russian minorities, 8 territories, 47 regions, 7 autonomous regions, and the cities of Moscow and St Petersburg. However, a programme of referenda in various federal subjects means that some are set to merge over the next few years.

Vladimir Putin was formally elected President on 26 March 2000. He kept largely intact the government he had inherited from President Yeltsin although a reshuffle in March 2001 placed some of his own loyalists in key positions.

During his first term, Putin moved to re-centralise power, cutting back the positions of regional governments and big business. He also pushed forward an ambitious programme of domestic reforms, particularly in the economic sphere, including banking reforms, tax reform, anti-money-laundering legislation, and administrative and judicial reform (perhaps the key to genuine change in ). Favourable economic conditions, fuelled by the high oil prices, have so far ensured his continuing personal popularity and given him the confidence to press ahead. Although progress on some politically and socially contentious issues like energy sector reform and pensions has been more limited, overall this has probably been the most stable and prosperous period for Russia since the break up of the USSR. Duma (Parliamentary) elections on 7 December 2003 saw an unprecedented win by United Russia, Putin’s preferred party. United with its allies now has a two third majority vote in the Duma, which could facilitate changes to the constitution if it so wishes. President Putin won a second term on 14 March 2004 with a landslide majority, although the OSCE’s election monitors were critical of what they considered to be unbalanced media coverage heavily slanted in his favour. More generally many observers are concerned about the often highly restrictive and authoritarian brand of 'managed democracy' which Putin now oversees. Parliamentary elections are scheduled to take place in December 2007, followed by Presidential elections in 2008.

ECONOMY

's economic resurgence since the 1998 financial crisis has been due to rouble devaluation, high oil prices, and most recently a consumer boom. But long-term sustainable growth will depend increasingly on progress on economic reforms, and in particular on creating a business environment that encourages both foreign and domestic investment and greater diversification of the Russian economy.� In terms of GDP growth, figures indicate 6.9 % in 2006, up from 6.5 per cent in 2005. continues to enjoy record trade and fiscal surpluses, with reserves currently standing at over $361 billion. In 2004 the Ministry of Finance created the Stabilisation Fund, which was designed to protect the country from the negative impacts of high oil windfalls (so-called Dutch disease) and to create a reserve in the case of a future financial crisis. By the end of March 2007 the Fund had accumulated $108 billion.� The Fund has also been used to pay off foreign debt. �’s outstanding Paris Club debt of $22.5bn was paid off early in August 2006, the largest single debt repayment in history. In his budget address in 2007, President Putin announced that from 2008 the Stabilisation Fund would be split into two components - a Reserve Fund, to protect against a possible economic downturn, and a Fund for Future Generations (now renamed the National Welfare Fund), focused on social spending, including future pensions.

’s involvement in the international economy is deepening rapidly. Foreign Direct Investment in reached $13.7 billion in 2006, while Russian companies are increasingly interested in foreign acquisitions. has made good progress in WTO negotiations, and in November 2006 concluded a bilateral agreement with the . It will continue accession talks, including the multilateral phase, in 2007.

Rising oil prices have pushed the importance of energy policy up the international agenda.� As the world's largest source of gas reserves and largest oil producer, has an important role to play in ensuring global energy security. During ’s G8 Presidency, leaders agreed a text on global energy security that underlines the key principles of openness, transparency and effective legal and regulatory frameworks at all stages of the energy supply chain.

The was the largest foreign investor in in 2006 and has significant interests in the energy sector. In 2003 BP invested $6.75 bn in a joint venture with Russian oil major TNK.� This was followed in May 2004 by Shell’s announcement of a major investment in gas development on Sakhalin Island, the largest oil and gas project in the world.� This project, also the largest ever foreign investment in , is destined to be a major future source of Liquefied Natural Gas (LNG), and thus make a key contribution to global energy security.

Notwithstanding current high growth rates, there are longer-term causes for concern about the Russian economy. needs to maintain the confidence of domestic and foreign investors (which took a knock after the arrest of the head of Yukos in October 2003 and the gradual break-up of his company thereafter). Recent domestic policy developments in the gas sector, for example, notably the Gas Export law which enshrines Gazprom’s de facto export monopoly, contrast with the G8 principles has signed up to. State structures remain little reformed.� State influence, including direct ownership, in the economy is growing.� Over regulation, uncertainty and corruption remain serious problems.� The external trade surplus could fall sharply if oil prices do not rise further, creating liquidity problems.� Major investment is needed across a range of sectors, including gas, where according to the IEA it is not certain that Russian supply will be able to meet both export and domestic demand by 2010. 's demographic decline will present a growing economic and labour-force challenge.

Basic Economic Facts

GDP: US$ 863 billion (2006)
GDP per head: US$ 10,700 (2006))
Annual Growth: 6.9% (2006)
Inflation: 9% (2006)
Major Industries: Oil, gas, timber, metals, machinery and chemicals
Major trading partners: (9%), US (7.7%), (4.9%) and (5.4%).
Exchange rate: Rb 26.1/US$ (February 2007)
Exports (2005): 1874.5 (�million)
Imports (2005): 5221.0 (�million)

HUMAN RIGHTS

While human rights and civil freedoms have improved dramatically since the collapse of the , some concerns remain which continue to attract public and parliamentary interest. These include human rights violations in Chechnya and the North Caucasus, the rule of law, torture, the development of civil society, media freedom, xenophobic or racially motivated attacks and conditions in the armed forces.
Further details on the human rights situation in , and the government’s efforts to improve the situation, can be found on page 86 of the 2006 Annual Report on Human Rights:

Human Rights Report 2006

The conflict in is currently the most serious on the territory of the former Soviet Union. The Russian government intervened in the Republic in 1999 after a short chaotic period of virtual Chechen self-rule after Russian troops withdrew in 1996. Much of the destruction of Grozny and other Chechen cities and towns was caused by indiscriminate use of heavy artillery and aerial bombing by the Russian military. Such attacks are now intermittent and the Russian response is becoming more targeted.

Moscow initiated a political process in March 2003 promising autonomy, reconstruction, and stabilisation. A constitutional referendum in March initiated the process, which received a substantial ‘yes’ vote. However, serious international concerns were raised over election conditions for the referendum. These were followed by presidential elections in October 2003, which elected the incumbent Head of the Administration, Akhmad Kadyrov, as President of Chechnya. Both the and the EU raised serious concerns over the election conditions and the plurality of the political process. The assassination of President Kadyrov in May 2004 brought renewed instability. Following another election held under questionable conditions a pro-Kremlin successor, Alu Alkhanov, was elected President on 29 August 2004. Parliamentary elections in the Chechen Republic were held in November 2005, resulting in an overwhelming victory for United Russia. Although the elections were held without serious incident, there were few international observers, partly due to the serious ongoing security situation in the region. Ramzan Kadyrov, son of assassinated former President Akhmad Kadyrov, became President of Chechnya in February 2007. He exercises a high degree of personal control over the Chechen authorities.

Despite Moscow’s claims of 'normalisation', fighting has continued, with frequent attacks by militants on federal and local forces, especially in the highland south. Militarily, pro-Moscow forces have gradually gained the upper hand. Chechen extremists have, in response, waged a campaign of terror, with bombings in Moscow, and other parts of Southern Russia. Reports of human rights abuses remain high; there have been widespread and credible allegations of extra-judicial killings, disappearances, torture, rape and unlawful detention by all sides. Growing instability in neighbouring republics, including North Ossetia and Dagestan, suggests that the problems are spreading across the wider North Caucasus region.

In July 2006 Russian forces killed Shamil Basayev, military leader of the Chechen rebel armed forces and wanted terrorist. This followed the killing of the Chechen rebel ‘President’ Abdul-Khalim Saydullayev in June 2006, demonstrating the increasing effectiveness of Russian security forces in fighting the rebel movement. See the FCO Travel Advice for more information about security situation in the North Caucasus, and the current terrorist threat.