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[Excerpt.
Full text at:
http://www.state.gov/r/pa/ei/bgn/3183.htm]
US Department of State
Bureau of European and Eurasian Affairs
October 2002
Background Note: Russia

PROFILE

OFFICIAL NAME: Russian Federation

Geography

Area: 17 million sq. km. (6.5 million sq. mi.); about 1.8 times the size of the United States.
Cities: Capital--Moscow (pop. 8.3 million). Other cities--St. Petersburg (4.6 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 (2002 est.): 144 million.
Annual growth rate (2001 est.): -0.35%.
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--(2001 est.) 62 yrs. men, 73 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.
Political parties: Shifting. The 1999 elections were contested by Conservative Movement of Russia, Russian All-Peoples Union, Women of Russia, Stalin Bloc-For the U.S.S.R., Yabloko, Working Russia, Peace-Labor-May, Bloc of Nikolayev and Federov, Spiritual Heritage, Congress of Russian Communities, Peace and Unity Party, Party for the Protection of Women, Unity Interregional Movement, Social Democrats, Movement in Support of the Army, Zhirinovskiy's Bloc, For Civic Dignity, Fatherland-All Russia, Communist Party, Russian Cause, All-Russian Political Party of the People, Union of Right Forces, Our Home is Russia, Socialist Party of Russia, Party of Pensioners and the Russian Socialist Party.
Subdivisions: 21 autonomous republics and 68 autonomous territories and regions.
Suffrage: Universal at 18 years.
Flag:
Economy (2001 est.) GDP: $287.7 billion (purchasing power parity estimated at $1.12 trillion in 2000).
Growth rate: 4.9%.Per capita GDP (using 31.4 rubles/$US): $1984 (purchasing power parity estimated at $7,700 in 2000).
Natural resources: Petroleum, natural gas, timber, furs, precious and nonferrous metals.
Agriculture: Products--Grain, sugarbeets, sunflower seeds, meat, dairy products.
Industry: Types--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 (2001): Exports (f.o.b.)--$68.26 billion: petroleum and petroleum products, natural gas, woods and wood products, metals, chemicals. Major markets--EU, NIS, China, Japan. Imports (f.o.b.)--$36.19 billion: machinery and equipment, chemicals, consumer goods, medicines, meat, sugar, semi-finished metal products. Major partners--EU, U.S., NIS, Japan, China. U.S. exports (f.a.s)--$2.58 billion. Principal U.S. exports--poultry, oil/gas equipment, computers/components, telecommunitcations equipment, beef and pork, medical equipment, autos/parts. U.S. imports (customs value)--$6.26 billion. Principal U.S. imports--platinum, oil, aluminum, woven apparel, crab, iron/steel, knit apparel, fertilizers, diamonds, plywood, vodka.

PEOPLE

Russia's area is about 17 million square kilometers (6.5 million sq. mi.). It remains the largest country in the world by more than 2.5 million square miles. Its population density is about 22 persons 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 largely mismatched to the rapidly changing needs of the Russian economy. Millions of Russian workers are underemployed. Unemployment is highest among women and young people. 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. The standard of living has been on the rise since 1999, but almost one-third of the population still does not meet the minimum subsistence level for money income. The Russian Ministry of Economic Development and Trade estimates that the percentage of people under the subsistence level will gradually decrease by 23%-25% in the period up to 2005.

Moscow is the largest city (population 8.3 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. Its cultural tradition is rich, and there are many museums devoted to art, literature, music, dance, history, and science. It has hundreds of churches and dozens of notable cathedrals; it has become Russia's principal magnet for foreign investment and business presence.

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 the Pacific Rim countries....

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. This agreement was superseded by the NATO-Russia Council that was agreed at the Reykjavik Ministerial and unveiled at the Rome NATO Summit in May 2002. On June 24, 1994, Russia and the European Union (EU) signed a partnership and cooperation agreement.

Russia has played an important role in helping mediate international conflicts and has been particularly actively engaged in trying to promote a peace following the conflict in Kosovo. Russia is a cosponsor of the Middle East peace process and supports UN and multilateral initiatives in the Persian Gulf, Cambodia, Angola, the former Yugoslavia, and Haiti. Russia is a founding member of the Contact Group and (since the Denver Summit in June 1997) a member of the G-8. In November 1998, Russia joined the Asia-Pacific Economic Cooperation Forum (APEC). Russia has contributed troops to the NATO-led stabilization force in Bosnia and 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 Russian military is divided into the following branches: Ground Forces, Navy, Air Force, and Strategic Rocket Forces. The available manpower for the various branches of the Russian armed forces was estimated at 38.9 million in 2001. According to Russian reports, in FY 2002, there will be about a 40% increase in arms procurement spending. However, even this increase is not enough to make up for the budget shortfalls of the previous decade. Russia's struggling arms producers will, therefore, intensify their efforts to seek sales to foreign governments.

About 70% of the former Soviet Union's defense industries are 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

Following September 11, the U.S.-Russia relationship has made a giant leap forward. Russia is a critical member of the international coalition against terror. 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 Putin and President Bush, most recently the Moscow/St. Petersburg-Summit in May 2002, are indicative of the strong commitment to working together on a broad range of issues. These include European security, counter-terrorism, reducing the threat to our countries posed by weapons of mass destruction, and economic cooperation, especially American investment in Russia.

Trade and Investment

In 2001, the U.S. trade deficit with Russia was nearly $3.5 billion, down $2 billion compared to the 2000 deficit of $5.6 billion. U.S. goods exports to Russia were nearly $2.7 billion in 2001, a 30.2% increase from the level of U.S. exports in 2000. Russia was the 35th-largest market for U.S. exports in 2001 (39th in 2000). U.S. imports from Russia totaled $6.3 billion in 2001, a decrease of 18.3% from the 2000 import totals. Russia ranked 29th as a supplier of U.S. imports in 2001 (28th in 2000). 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. The U.S. Senate ratified the Bilateral Investment Treaty (BIT) on October of the same year, but it cannot enter into force until the Duma ratifies it. The Duma did not actively consider ratification in 2001.

The U.S. actively supports Russia's efforts to join the World Trade Organization (WTO). on commercially viable terms. Russia is currently very active in the process of negotiating terms of accession to the WTO. It has hosted and attended many meetings and summits on the topic over the past few years. President Putin committed Russia to entering the WTO as early as 2003. The United States actively supported Russian membership in the Asia-Pacific Economic Cooperation (APEC) forum. Russia became a member of APEC in November 1998.

Security Cooperation

NATO/Russia Founding Act. Russia signed the NATO Partnership for Peace initiative in June 1994. U.S. and Russian troops are serving together in the Implementation Force in Bosnia and its successor, the Stabilization Force (SFOR). 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 NATO-Russia Council (NRC) was established in May 2002, reflecting the transformed relationship between Russia and NATO. The NRC provides opportunities for consultation, joint decision, and joint action on a wide range of issues. Some of the areas for projects are assessment of the terrorist threat, crisis management, non-proliferation, arms control and confidence-building measures, theater missile defense, search and rescue at sea, military-to-military cooperation, defense reform, civil emergency response, and new threats and challenges (including scientific cooperation and airspace management).

Agreements/Cooperation/Nuclear Arms. The United States 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 and academic contacts. The United States 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. In December 2001, the United States announced its withdrawal from the 1972 ABM Treaty, citing the September 11 attacks and the new threats faced. The United States officially withdrew from the treaty on June 13, 2002, making the treaty defunct. However, the United States continued to negotiate with Russia on reducing both countries' strategic nuclear arsenals.

START I. The START I Treaty was signed by the United States and the Soviet Union on July 31, 1991. Five months later, the Soviet Union dissolved, and in May 1992, Belarus, Kazakhstan, Russia, and Ukraine signed the Lisbon Protocol to the START I Treaty, making them parties to the START I Treaty. Belarus, Kazakhstan, and Ukraine also have fulfilled their commitment to accede to the nuclear Non-Proliferation Treaty (NPT) as non-nuclear weapon states in the shortest possible time, and to return all nuclear weapons on their territory to Russia for dismantling. The START I Treaty entered into force on December 5, 1994. START I, which was fully implemented by the United States and Russia in December 2001, requires reductions in strategic offensive arms to 6,000 accountable warheads on each side. All parties to the treaty have been successful in meeting the treaty's reduction requirements.

START II. The START II Treaty was signed by the United States and Russia on January 3, 1993. START II builds on the START I Treaty, requiring reductions in two phases to 3,000-3,500 deployed strategic nuclear warheads on each side, a two-thirds reduction from Cold War levels. All strategic nuclear weapons were removed from Ukraine, Belarus, and Kazakhstan to Russia. Under START II, all heavy ICBMs and MIRVed ICBMs were to be eliminated from each side's deployed forces. The deadline for START II reductions was extended to December 2007 by the START II Protocol. START II never entered into force.

START III. As agreed at Cologne, the United States and Russia began discussions on both START III and ABM issues during the summer of 1999. START III negotiations were to begin after START II entered into force, but it was superseded in 2002 by a new arms control treaty signed in Moscow.

Moscow Treaty on Strategic Offensive Reductions. Presidents Bush and Putin signed the Moscow Treaty on Strategic Offensive Reductions on May 24, 2002 during the Moscow/St. Petersburg Summit. This treaty is part of a strategic framework that the United States and Russia have established, which includes political, economic, and security areas.

The treaty requires each country to reduce and limit its strategic nuclear warheads to 1,700-2,200 by December 31, 2012, a level nearly two-thirds below current levels. Each side may determine for itself the composition and structure of its strategic forces consistent with this limit. A Bilateral Implementation Commission will meet at least twice a year to discuss issues related to the Treaty. The Treaty must be approved and ratified by the U.S. Senate and the two Chambers of the Russian Federal Assembly. START I continues in force unchanged.

CFE. 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. An adapted CFE Treaty was adopted at the November 1999 Istanbul Summit. The adapted treaty takes account of the changes in Europe since CFE was signed.

Politically, the process of adaptation has played a pivotal role in managing Russian concerns and expectations regarding NATO enlargement, through both the Madrid and Washington NATO Summits. NATO allies addressed deeply held Russian concerns by accepting provisions in CFE which demonstrated that NATO did not contemplate a massive eastward shift in peacetime military potential as a result of enlargement. But this remains a very NATO-friendly treaty.

Cooperative Threat Reduction (CTR). Often called Nunn-Lugar assistance, this type of 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. The FY 2003 budget requests $417 million for CTR programs, a slight increase from the FY 2002 level of $403 million ($307 million in Russian programs). Through CTR assistance, the United States is assisting Russia to meet START elimination levels earlier than Russia could do so unassisted.

In Russia, CTR has helped to upgrade the security and safety of nuclear weapons transport vehicles; is improving safeguards for fissile material; assisting with the design and construction of a secure, central storage facility for fissile material from dismantled nuclear weapons; providing assistance to eliminate Russian ICBMs, SLBMs, and strategic bombers; assisting with planning for destruction of chemical weapons and evaluating possible destruction technology; and supporting conversion of weapons of mass destruction to civilian production.

Under the highly enriched uranium agreement, the United States is purchasing uranium from Russian weapons for use in power reactors. Also, both the United States and Russia will cooperate to dispose of excess military plutonium. The United States 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, and attempting to increase military-to-military contacts.

In a multilateral effort (the European Union, Japan, and Canada also are involved), the United States also has provided more than $150 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

Cumulative U.S. Assistance Figures. Since 1992, the U.S. Government has allocated more than $10.8 billion in grant assistance to Russia, funding a variety of programs in four key areas: security programs, humanitarian assistance, economic reform, and democratic reform. This U.S. Government assistance is provided in such diverse areas as nuclear reactor safety, public health, and customs reform. The grant assistance provided by the U.S. Government through Fiscal Year 2001 can be broken down as follows: almost $4.9 billion in security assistance (weapons dismantlement and nonproliferation) from Departments of Defense, Energy, and State programs, almost $2.9 billion in humanitarian assistance, more than $1.5 billion in economic reform programs, over $800 million in democratic reform programs, and $700 million in cross-sectoral and other programs. The U.S. Government also has supported about $9.1 billion in commercial financing and insurance for Russia. Nearly 50,000 Russians have traveled to the United States under U.S. Government-funded training and exchange programs. The annual level of FREEDOM Support Act-funded assistance for Russia, which declined from a peak of $1.6 billion in FY 1994 to $95 million in FY 1997, is about $159 million in FY 2002.

For more detailed information on U.S. Government assistance to Russia, please see the FY 2001 Annual Report to Congress on U.S. Government Assistance to and Cooperative Activities with Eurasia, which is available in the Bureau of European and Eurasian Affairs section on the State Department's website at

How U.S. Assistance Has Evolved. The U.S. Government's strategy for assistance to Russia is based on the premise that Russia's transition to a democratic, free-market system will be a long-term process. The United States will need to remain engaged throughout this process, and therefore U.S. assistance emphasizes activities that promote the establishment of lasting ties between Russians and Americans at all levels of society. Over the past few years, the U.S. assistance program has moved away from technical assistance to the central government, although such assistance is still provided when it is appropriate and will help to advance reform. An increasing proportion of U.S. assistance is focused at the regional and municipal level, where programs are helping to build the infrastructure of a market economy, remove impediments to trade and investment, and strengthen civil society.

In general, U.S. assistance programs in Russia are working at the grassroots level by bolstering small business through training and enhanced availability of credit; expanding exchanges so that more Russian citizens can learn about America's market democracy on a first-hand basis; and increasing the number of partnerships between Russian and U.S. cities, universities, hospitals, business associations, charities, and other civic groups. In FY 1999, humanitarian assistance accounted for some 60% of U.S. assistance to Russia, in response to the increased need for such assistance in the aftermath of Russia's August 1998 financial crisis. This crisis also increased concerns, however, about the former Soviet weapons arsenal in Russia and potential weapons proliferation risks. U.S. security and threat reduction assistance programs were expanded significantly to address these concerns and in FY 2002, security and nonproliferation programs represent about 80% of U.S assistance to Russia.

U.S. security assistance programs help eliminate weapons of mass destruction and prevent proliferation of weapons, weapons materials, delivery systems, technology and weapons expertise, counter terrorism, and promote regional stability and security. The U.S. has provided Russia assistance to improve physical security at key nuclear weapons storage sites, demilitarize facilities, as well as help enable compliance with arms accords. Since the September 1, 2001 terrorist attacks, cooperation in anti-terrorism efforts increased between the United States and Russia. While the Administration's "Review of Nonproliferation Assistance to Russia" in FY 2001 resulted in changes to some U.S. security programs, the high priority of security assistance was reconfirmed in this review and is reflected in increased FY 2002 funding to nearly $1 billion.

Current U.S. Government-funded humanitarian assistance programs include the provision of commodities through the Department of State Humanitarian Transport Program and directed emergency care for internally displaced persons in the North Caucasus resulting from the conflict in Chechnya. This $10 million program supports the work of six private volunteer organizations in the North Caucasus. Support for the program is being extended in FY 2002, although at a reduced funding level. Main commodities--medical supplies, food and clothing--are being shipped and distributed to needy individuals, families, and institutions through the Department of State Humanitarian Transport Program. The total value of all Department of State humanitarian commodities provided in FY 2002 is expected to be about $15 million. Additionally, through the Rostropovich Foundation, the U.S. Department of Agriculture (see below) is executing a food aid program in Russia that has a total value of nearly $10 million.

Increasingly, U.S. Government-funded economic reform programs are focused in Russia's regions. A limited amount of assistance is targeted at promoting reforms at the national level, particularly with regard to tax administration and Russia's efforts to accede to the World Trade Organization (WTO).

Democratic reform programs are helping Russians develop the building blocks of a democratic society based on the rule of law by providing support to non-governmental organizations (NGOs), independent media, the judiciary, and other key institutions. 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, and is establishing public-access Internet sites throughout Russia. In addition, the U.S. Government is helping Russia combat crime and corruption through cooperation with U.S. law enforcement agencies and community-based groups. A 2001 interagency review of U.S. assistance to Russia, initiated by the National Security Council (NSC) and conducted by the Department of State and NSC, recommended greater focus on supporting entrepreneurs, strengthening civil society and independent media, and improving Russians' health. Special emphasis also was given to working with Russia's younger generation....

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