The modern history of Russia began with the
Russian Republic
The Russian Republic,. referred to as the Russian Democratic Federal Republic. in the Decree on the system of government of Russia (1918), 1918 Constitution, was a short-lived state (polity), state which controlled, ''de jure'', the territ ...
of the
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
gaining more political and economical autonomy amidst the
imminent dissolution of the USSR during 1990–1991, proclaiming its sovereignty inside the Union in June 1990, and electing its first President
Boris Yeltsin
Boris Nikolayevich Yeltsin ( rus, Борис Николаевич Ельцин, p=bɐˈrʲis nʲɪkɐˈla(j)ɪvʲɪtɕ ˈjelʲtsɨn, a=Ru-Boris Nikolayevich Yeltsin.ogg; 1 February 1931 – 23 April 2007) was a Soviet and Russian politician wh ...
a year later. The Russian SFSR was the largest republic within the Soviet Union, but it had no significant independence before, being the only Soviet republic to not have its own branch of the
Communist Party
A communist party is a political party that seeks to realize the socio-economic goals of communism. The term ''communist party'' was popularized by the title of ''The Manifesto of the Communist Party'' (1848) by Karl Marx and Friedrich Engels. A ...
.
The RSFSR was the largest of the fifteen republics that made up the USSR, accounting for over 60% of the
GDP
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...
and over 50% of the Soviet population.
Russians
, native_name_lang = ru
, image =
, caption =
, population =
, popplace =
118 million Russians in the Russian Federation (2002 ''Winkler Prins'' estimate)
, region1 =
, pop1 ...
also dominated the Soviet military and the
Communist Party
A communist party is a political party that seeks to realize the socio-economic goals of communism. The term ''communist party'' was popularized by the title of ''The Manifesto of the Communist Party'' (1848) by Karl Marx and Friedrich Engels. A ...
. As such, the Russian Federation was widely accepted as the USSR's
successor state
Succession of states is a concept in international relations regarding a successor state that has become a sovereign state over a territory (and populace) that was previously under the sovereignty of another state. The theory has its roots in 19th- ...
in diplomatic affairs and it assumed the USSR's permanent membership and veto in the
UN Security Council
The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, and ...
(see
Russia and the United Nations
The Russian Federation succeeded to the Soviet Union's seat, including its permanent membership on the Security Council in the United Nations after the 1991 dissolution of the Soviet Union, which originally co-founded the UN in 1945. The succ ...
).
Prior to the dissolution of the USSR, Yeltsin had been elected President of the RSFSR in June 1991 in the
first direct presidential election in Russian history. This ensured that he would be the political leader of the Russian successor state following dissolution. This situation resulted in political turmoil as the Soviet and Russian leadership wrestled for control, which culminated in the
1991 August coup
File:1991 Events Collage.png, From left, clockwise: Boris Yeltsin, 1991 Russian presidential election, elected as Russia's first President of Russia, president, waves the new flag of Russia after the 1991 Soviet coup d'état attempt, orchestrated ...
, where the Soviet military attempted to overthrow
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet politician who served as the 8th and final leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...
. Although the coup was ultimately averted, this situation contributed to rising instability in the Soviet Union. As the USSR was on the verge of collapse by October 1991, Yeltsin announced that Russia would proceed with radical reforms, including
market
Market is a term used to describe concepts such as:
*Market (economics), system in which parties engage in transactions according to supply and demand
*Market economy
*Marketplace, a physical marketplace or public market
Geography
*Märket, an ...
-oriented reform along the lines of
Poland
Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populous ...
's "big bang", also known as "
shock therapy
Electroconvulsive therapy (ECT) is a psychiatric treatment where a generalized seizure (without muscular convulsions) is electrically induced to manage refractory mental disorders.Rudorfer, MV, Henry, ME, Sackeim, HA (2003)"Electroconvulsive the ...
". Following Yeltsin's resignation in 1999, Russia's politics have since been dominated by
Vladimir Putin
Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
, serving as either President or Prime Minister. Although the Russian economy has improved significantly under Putin's leadership following relative economic chaos under Yeltsin, Putin has also been widely accused of
corruption
Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
,
authoritarian
Authoritarianism is a political system characterized by the rejection of political plurality, the use of strong central power to preserve the political ''status quo'', and reductions in the rule of law, separation of powers, and democratic votin ...
leadership, and widespread
human rights
Human rights are Morality, moral principles or Social norm, normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for ce ...
abuses.
For the most part, the
Russian armed forces
The Armed Forces of the Russian Federation (, ), commonly referred to as the Russian Armed Forces, are the military forces of Russia. In terms of active-duty personnel, they are the world's fifth-largest military force, with at least two m ...
were in near complete disarray by 1992, one year after dissolution. This degraded military effectiveness would become all too clear during the
1994 Chechen War, but in the interim this posed some significant practical challenges for global security and arms control. Under Russian leadership, the
Lisbon Protocol
The Lisbon Protocol to the 1991 Strategic Arms Reduction Treaty was a document signed by representatives of Russia, Belarus, Ukraine, and Kazakhstan that recognized the four states as successors of the Union of Soviet Socialist Republics and all ...
ensured that
former Soviet republics
The post-Soviet states, also known as the former Soviet Union (FSU), the former Soviet Republics and in Russia as the near abroad (russian: links=no, ближнее зарубежье, blizhneye zarubezhye), are the 15 sovereign states that wer ...
would disarm themselves of nuclear weapons. This may have been particularly important for Kazakhstan which hosted a significant share of the world's nuclear weapons immediately following the dissolution of the Soviet Union. However, the former Soviet republics were able to maintain transnational cooperation in other military areas, like establishing shared responsibility for the rocket and space infrastructure such as the
Baikonur Cosmodrome
The Baikonur Cosmodrome ( kk, Байқоңыр ғарыш айлағы, translit=Baiqoñyr ğaryş ailağy, ; russian: Космодром Байконур, translit=Kosmodrom Baykonur, ) is a spaceport in an area of southern Kazakhstan leased to R ...
.
Reforms
"Shock therapy"
![HDP PPP per capita Russia](https://upload.wikimedia.org/wikipedia/commons/e/ee/HDP_PPP_per_capita_Russia.jpg)
With the dissolution of the
Warsaw Pact
The Warsaw Pact (WP) or Treaty of Warsaw, formally the Treaty of Friendship, Cooperation and Mutual Assistance, was a collective defense treaty signed in Warsaw, Poland, between the Soviet Union and seven other Eastern Bloc socialist republic ...
and
CoMEcon
The Council for Mutual Economic Assistance (, ; English abbreviation COMECON, CMEA, CEMA, or CAME) was an economic organization from 1949 to 1991 under the leadership of the Soviet Union that comprised the countries of the Eastern Bloc along wi ...
and other treaties that served to bind its satellite states to the Soviet Union, the conversion of the world's largest state-controlled economy into a market-oriented economy would have been extraordinarily difficult regardless of the policies chosen. The policies chosen for this transition were (1) liberalization, (2) stabilization and (3)
privatization
Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
. These policies were based on the
Washington Consensus
The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monet ...
of the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...
(IMF),
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
and
Treasury Department.
On January 2, 1992, Yeltsin—acting as his own prime minister—enacted the most comprehensive components of economic reform by decree, thereby circumventing the
Supreme Soviet of Russia
The Supreme Soviet of the Russian Soviet Federative Socialist Republic, Russian SFSR (russian: Верховный Совет РСФСР, ''Verkhovny Sovet RSFSR''), later Supreme Soviet of the Russia, Russian Federation (russian: Верховны ...
and
Congress of People's Deputies of Russia
The Congress of People's Deputies of the Russian SFSR (russian: Съезд народных депутатов РСФСР) and since 1991 Congress of People's Deputies of the Russian Federation (russian: Съезд народных депута ...
, which had been elected in
March 1990, before the dissolution of the USSR. While this spared Yeltsin from the prospects of bargaining and wrangling with Soviet deputies, it also eliminated any meaningful discussion of the right course of action for the country.
The programs of liberalization and stabilization were designed by Yeltsin's deputy prime minister
Yegor Gaidar
Yegor Timurovich Gaidar (russian: link=no, Его́р Тиму́рович Гайда́р; ; 19 March 1956 – 16 December 2009) was a Soviet and Russian economist, politician, and author, and was the Acting Prime Minister of Russia from 15 Jun ...
, a liberal economist inclined toward radical reform, and widely known as an advocate of "
shock therapy
Electroconvulsive therapy (ECT) is a psychiatric treatment where a generalized seizure (without muscular convulsions) is electrically induced to manage refractory mental disorders.Rudorfer, MV, Henry, ME, Sackeim, HA (2003)"Electroconvulsive the ...
". Shock therapy was originally used in Bolivia by notable economist Jeffery Sachs to combat inflation in the 1980s. Having achieved some major successes in Bolivia, shock therapy was then imported to the Polish context following the dissolution of the Soviet Union, and Russia shortly after.
![Rostov-on-don-russia-1992](https://upload.wikimedia.org/wikipedia/commons/c/c1/Rostov-on-don-russia-1992.jpg)
The partial results of liberalization (lifting price controls) included worsening already apparent
hyperinflation
In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...
, initially due to
monetary overhang Monetary overhang is a phenomenon in which people have money holdings because of a lack of ability to spend them. This is a phenomenon often present with repressed inflation and was common in centrally planned economies like the Soviet Union
...
and exacerbated after the
central bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
, an organ under parliament, which was skeptical of Yeltsin's reforms, was short of revenue and printed money to finance its debt. This resulted in the near bankruptcy of much of Russian industry.
The process of liberalization would create winners and losers, depending on how particular industries, classes, age groups, ethnic groups, regions, and other sectors of Russian society were positioned. Some would benefit by the opening of competition; others would suffer. Among the winners were the new class of entrepreneurs and black marketeers that had emerged under
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet politician who served as the 8th and final leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...
's ''
perestroika
''Perestroika'' (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated wit ...
''. But liberalizing prices meant that the elderly and others on fixed incomes would suffer a severe drop in living standards, and people would see a lifetime of savings wiped out.
With inflation at double-digit rates per month as a result of printing, macroeconomic stabilization was enacted to curb this trend. Stabilization, also called structural adjustment, is a harsh austerity regime (tight
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
and
fiscal policy
In economics and political science, fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variables ...
) for the economy in which the government seeks to control inflation. Under the stabilization program, the government let most prices float, raised
interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
s to record highs, raised heavy new taxes, sharply cut back on government subsidies to industry and construction, and made massive cuts in state welfare spending. These policies caused widespread hardship as many state enterprises found themselves without orders or financing. A deep
credit crunch
A credit crunch (also known as a credit squeeze, credit tightening or credit crisis) is a sudden reduction in the general availability of loans (or credit) or a sudden tightening of the conditions required to obtain a loan from banks. A credit cr ...
shut down many industries and brought about a protracted depression.
The rationale of the program was to squeeze the built-in inflationary pressure out of the economy so that producers would begin making sensible decisions about production, pricing and investment instead of chronically overusing resources—a problem that resulted in shortages of
consumer goods in the Soviet Union
Consumer goods in the Soviet Union were usually produced by a two-category industry. Group A was "heavy industry", which included all goods that serve as an input required for the production of some other, final good. Group B was "consumer goods" ...
in the 1980s. By letting the market rather than central planners determine prices, product mixes, output levels, and the like, the reformers intended to create an incentive structure in the economy where efficiency and risk would be rewarded and waste and carelessness were punished. Removing the causes of
chronic inflation
Chronic inflation is an economic phenomenon occurring when a country experiences high inflation for a prolonged period (several years or decades) due to continual increases in the money supply among other things. In countries with chronic infla ...
, the reform architects argued, was a precondition for all other reforms: Hyperinflation would wreck both democracy and economic progress, they argued; they also argued that only by stabilizing the state budget could the government proceed to dismantle the
Soviet planned economy and create a new capitalist Russia.
Nonetheless, radical reform continued to face some critical political barriers. The
Central Bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
was still subordinate to the conservative Supreme Soviet who continued to support socialist policies in opposition to Yeltsin and the presidency. During the height of
hyperinflation
In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as t ...
in 1992–1993, the Central Bank actually tried to derail reforms by actively printing even more money during this period of inflation. After all, the Russian government was short of revenue and was forced to print money to finance its debt. As a result, inflation exploded into hyperinflation, and the Russian economy continued into an evermore serious slump.
Privatization
Upon the Soviet Union's collapse, the new Russian government was forced to manage the huge state enterprise sector inherited from the
Soviet economy
The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing. An administrative-command system managed a distinctive form of central planning. The Soviet economy was ...
. Privatization was carried out by the
State Committee for State Property Management of the Russian Federation under
Anatoly Chubais
Anatoly Borisovich Chubais (russian: Анатолий Борисович Чубайс; born 16 June 1955) is a Russian politician and economist who was responsible for privatization in Russia as an influential member of Boris Yeltsin's administ ...
with the primary goal being to transform the formerly state-owned enterprises into profit-seeking businesses, which would not be dependent on government subsidies for their survival. To distribute property quickly and to win over popular support, the reformers decided to rely mostly on the mechanism of free
voucher privatization
Voucher privatization is a privatization method where citizens are given or can inexpensively buy a book of vouchers that represent potential shares in any state-owned company. Voucher privatization has mainly been used in the early to mid-1990s i ...
, which was earlier implemented in
Czechoslovakia
, rue, Чеськословеньско, , yi, טשעכאסלאוואקיי,
, common_name = Czechoslovakia
, life_span = 1918–19391945–1992
, p1 = Austria-Hungary
, image_p1 ...
. The Russian government believed that the open sale of state-owned assets, as opposed to the voucher program, would have likely resulted in the further concentration of ownership among the
Russian mafia
Russian organized crime or Russian mafia (, ), otherwise known as Bratva (), is a collective of various organized crime elements originating in the former Soviet Union. The initialism OPG is Organized Criminal (''prestupnaya'' in Russian) Gr ...
and the
nomenklatura
The ''nomenklatura'' ( rus, номенклату́ра, p=nəmʲɪnklɐˈturə, a=ru-номенклатура.ogg; from la, nomenclatura) were a category of people within the Soviet Union and other Eastern Bloc countries who held various key admi ...
, which they sought to avoid. Nevertheless, contrary to the government's expectations,
insider
''Insider'', previously named ''Business Insider'' (''BI''), is an American financial and business news website founded in 2007. Since 2015, a majority stake in ''Business Insider''s parent company Insider Inc. has been owned by the German publ ...
s managed to acquire control over most of the assets, which remained largely dependent on government support for years to come. From 1992 to 1994, ownership of 15,000 firms was transferred from state control via the voucher program.
Privatization of the oil sector was regulated by
presidential decree
A decree is a legal proclamation, usually issued by a head of state (such as the president of a republic or a monarch), according to certain procedures (usually established in a constitution). It has the force of law. The particular term used for ...
No.1403 approved on November 17, 1992. Vertically integrated companies were created by joining some oil-producing enterprises and refineries into open-stock companies. Starting in 1994 many former state oil companies were privatized. This privatization had been partial because the federal government had obtained ownership positions in several companies and had also retained full control over the transport of oil to lucrative world markets.
In 1995, facing severe
fiscal deficit
The government budget balance, also alternatively referred to as general government balance, public budget balance, or public fiscal balance, is the overall difference between government revenues and spending. A positive balance is called a ''g ...
and in desperate need of funds for the
1996 presidential elections, the government of Boris Yeltsin adopted a "
loans-for-share" scheme proposed by banker
Vladimir Potanin
Vladimir Olegovich Potanin (russian: Владимир Олегович Потанин; born 3 January 1961) is a Russian billionaire businessman. He acquired his wealth notably through the controversial loans-for-shares program in Russia in ...
and endorsed by
Anatoly Chubais
Anatoly Borisovich Chubais (russian: Анатолий Борисович Чубайс; born 16 June 1955) is a Russian politician and economist who was responsible for privatization in Russia as an influential member of Boris Yeltsin's administ ...
, then a deputy prime minister, whereby some of the largest state industrial assets (including state-owned shares in
Norilsk Nickel
Norilsk Nickel (russian: ГМК «Норильский никель»), or Nornickel, is a Russian nickel and palladium mining and smelting company. Its largest operations are located in the Norilsk–Talnakh area near the Yenisei River in the no ...
,
Yukos
OJSC "Yukos Oil Company" (russian: ОАО Нефтяна́я Компа́ния Ю́КОС, links=no, ) was an oil and gas company based in Moscow, Russia. Yukos was acquired from the Russian government by Russian oligarch Mikhail Khodorkovs ...
,
Lukoil
The PJSC Lukoil Oil Company ( stylized as LUKOIL or ЛУКОЙЛ in Cyrillic script) is a Russian multinational energy corporation headquartered in Moscow, specializing in the business of extraction, production, transport, and sale of petrol ...
,
Sibneft
Gazprom Neft (russian: Газпром Нефть; formerly Sibneft, russian: Сибнефть, link=no), is the third largest oil producer in Russia and ranked third according to refining throughput. It is a subsidiary of Gazprom, which owns about ...
,
Surgutneftegas
Surgutneftegas ( rus, ПАО «Сургутнефтегаз», p=sʊrɡʊtnʲɪftʲɪˈɡas) is a Russian oil and gas company created by merging several previously state-owned companies owning large oil and gas reserves in Western Siberia. The ...
,
Novolipetsk Steel
Novolipetsk Steel, or NLMK, is one of the four largest steel companies in Russia. NLMK's share of domestic crude steel production is about 21%. It primarily produces flat steel products, semi-finished steel products and electrical steels. NLMK a ...
, and
Mechel
Mechel (russian: ПАО «Мечел») is one of Russia's mining and metals companies, comprising producers of coal, iron ore in concentrate, steel, rolled steel products. Headquartered in Moscow, it sells its products in Russia and overseas, and ...
) were leased through auctions for money lent by commercial banks to the government. The auctions were
rigged and lacked competition, being largely controlled by favored insiders with political connections or used for the benefit of the commercial banks themselves. As neither the loans nor the leased enterprises were returned in time, this effectively became a form of selling, or privatizing, state assets at very low prices.
The privatization facilitated the transfer of significant wealth to a relatively small group of
business oligarchs and
New Russians
The New Russians (russian: link=no, новые русские ''novye russkie'') were a newly rich business class who made their fortune in the 1990s in post-Soviet Russia. It is perceived as a stereotypical caricature. According to the stereot ...
, particularly
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
and
oil
An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...
executives.
Obstacles to reform
The former Soviet Union had to deal with a number of unique obstacles during the post-Soviet transition including political reform, economic restructuring and the redrawing of political boundaries. The discomfort associated with these changes was not felt the same in each former Soviet republic. As a general rule, states to Russia's west, such as
Poland
Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populous ...
,
Hungary
Hungary ( hu, Magyarország ) is a landlocked country in Central Europe. Spanning of the Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Croatia a ...
, and the
Czech Republic
The Czech Republic, or simply Czechia, is a landlocked country in Central Europe. Historically known as Bohemia, it is bordered by Austria to the south, Germany to the west, Poland to the northeast, and Slovakia to the southeast. The ...
, have fared slightly better than their eastern neighbors since the collapse of the Eastern bloc, while Russia itself and countries to Russia's east experienced greater difficulties and found themselves on worse footing immediately after dissolution. A major reason that Russia's transition has been so wrenching is that it is remaking both its Soviet-era political and economic institutions at once. In addition to institutional reforms designed to create a new political-economic system, Russia was also charged with remaking itself into a new national state following the disintegration of the Soviet Union.
The first major problem facing Russia was the legacy of the Soviet Union's enormous commitment to the
Cold War
The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
. In the late 1980s, the Soviet Union devoted a quarter of its gross economic output to the defense sector (at the time most Western analysts believed that this figure was 15 percent). At the time, the military-industrial complex employed at least one of every five adults in the Soviet Union. In some regions of Russia, at least half of the workforce was employed in defense plants (the comparable U.S. figures were roughly one-sixteenth of gross national product and about one of every sixteen in the workforce). These over-reliance on the military sector made Russian industry and human capital relatively noncompetitive upon entry into a market-oriented system. Furthermore, the end of the Cold War and the cutback in military spending affected industry quite dramatically making it difficult to quickly retool equipment, retrain workers, and find new markets. In the process of economic re-tooling, an enormous body of experience, qualified specialists and know-how was lost or misallocated, as the plants were sometimes switching from, for example, producing hi-tech military equipment to making kitchen utensils.
A second obstacle, partly related to the sheer vastness and geographical diversity of the Russian landmass, was the sizable number of "mono-industrial" regional economies (regions dominated by a single industrial employer) that Russia inherited from the Soviet Union. The concentration of production in a relatively small number of big state enterprises meant that many local governments were entirely dependent on the economic health of a single employer; when the Soviet Union collapsed and the economic ties between Soviet republics and even regions were severed, the production in the whole country dropped by more than fifty percent. Roughly half of Russia's cities had only one large industrial enterprise, and three fourths had no more than four. Consequently, the decrease in production caused tremendous unemployment and underemployment.
Thirdly, post-Soviet Russia did not inherit a system of state social security and welfare from the USSR. Instead the companies, mainly large industrial firms, were traditionally responsible for a broad range of social welfare functions—building and maintaining housing for their work forces, and managing health, recreational, educational, and similar facilities. The towns in contrast possessed neither the apparatus nor the funds for the provision of basic social services. Industrial employees were left heavily dependent on their firms. Thus, economic transformation created severe problems in maintaining social welfare since local governments were unable to assume finance or operational responsibility for these functions.
Finally, there is a
human capital
Human capital is a concept used by social scientists to designate personal attributes considered useful in the production process. It encompasses employee knowledge, skills, know-how, good health, and education. Human capital has a substantial ...
dimension to the failure of post-Soviet reforms in Russia. The former Soviet population was not necessarily uneducated.
Literacy
Literacy in its broadest sense describes "particular ways of thinking about and doing reading and writing" with the purpose of understanding or expressing thoughts or ideas in written form in some specific context of use. In other words, huma ...
was nearly universal, and the educational level of the Soviet population was among the highest in the world with respect to science, engineering, and some technical disciplines, although the Soviets devoted little to what would be described as "
liberal arts
Liberal arts education (from Latin "free" and "art or principled practice") is the traditional academic course in Western higher education. ''Liberal arts'' takes the term ''art'' in the sense of a learned skill rather than specifically the ...
" in the West. With the move to a post-Communist system, the Russian university system collapsed. Rampant credential inflation in the Russian university system made it difficult for employers to determine who was really skilled and the problems of the higher education system more generally made it difficult to remedy other issues of human capital that came from the transition to a market-oriented system, such as upskilling and re-skilling. For example, former state enterprise managers were highly skilled at coping with the demands on them under the Soviet system of planned production targets, but discouraged the risk-and-reward centered behavior of market capitalism. These managers were responsible for a broad array of social welfare functions for their employees, their families, and the population of the towns and regions where they were located.
Profitability
In economics, profit is the difference between the revenue that an economic entity has received from its outputs and the total cost of its inputs. It is equal to total revenue minus total cost, including both explicit and implicit costs.
It i ...
and
efficiency
Efficiency is the often measurable ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without ...
, however, were generally not the most prominent priorities for Soviet enterprise managers. Thus, almost no Soviet employees or managers had firsthand experience with decision-making in the conditions of a
market economy
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
.
Depression
After the initial turmoil and euphoria of early marketizations, Russia's economy sank into deep depression by the mid-1990s due to botched reform efforts and low commodity prices globally but not before
George H. W. Bush
George Herbert Walker BushSince around 2000, he has been usually called George H. W. Bush, Bush Senior, Bush 41 or Bush the Elder to distinguish him from his eldest son, George W. Bush, who served as the 43rd president from 2001 to 2009; pr ...
helped Yeltsin with "an unparalleled opportunity to change the nuclear posture of both the United States and the Soviet Union" and to end the
Cold War
The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
peacefully with the
Nunn–Lugar cash-for-weapons scheme, in order to avoid the worst of the dissolution of the vast Soviet technological empire.
Russia's economy was hit further by the financial crash of 1998 before experiencing a modest recovery in 1999–2000 as commodity prices began to rise again. According to Russian government statistics, the economic decline was far more severe than the
Great Depression
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
was in the United States in terms of gross domestic product.
In 1995, a little over 3% of the work force was officially registered as unemployed, but, in addition to the technically jobless, 4.4% of the labour force were working only part time, while a further 3.9% had been sent on involuntary leave. Also millions of Russians turned up for work each day, but were not paid by the employers. If all these categories of jobless, semi-employed and unpaid workers were taken into account, the 18% Russian unemployment figure cited in June, 1995 by labour market expert Tatyana Maleva of the Institute of Economic Analysis seemed real. With unemployment benefits sufficient only to buy a small loaf of bread each day, trying to survive without some other income was not an option for those who lost jobs. They were toiling during the warmer months to grow food in family vegetable plots, selling newspapers or lottery tickets on the streets, busking, begging, turning to prostitution. Often they sank into the criminal underworld.
In 1997, at least 98,400 companies were defaulting on payments to employees. It was estimated that one out of four Russian workers, or close on 20 million people, were not paid for months. Some were paid "in kind": for example, women workers were paid in brassieres and shoes that they resoled in the streets, workers of
Moskvich, the auto plant in Moscow, were paid in spare parts, those of the
Ivanovo
Ivanovo ( rus, Иваново, p=ɪˈvanəvə) is a types of inhabited localities in Russia, city in Russia. It is the administrative center and largest city of Ivanovo Oblast, located northeast of Moscow and approximately from Yaroslavl, Vlad ...
textile plants were paid in bedsheets, and those of the
Gus-Khrustalny porcelain factory were paid in crystal and ceramic vases.
By way of a domestic comparison, the post-Soviet economic decline was about half as severe as the economic catastrophe borne out of the immediate consequence of
World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
, the fall of
Tsar
Tsar ( or ), also spelled ''czar'', ''tzar'', or ''csar'', is a title used by East Slavs, East and South Slavs, South Slavic monarchs. The term is derived from the Latin word ''Caesar (title), caesar'', which was intended to mean "emperor" i ...
ism, and the
Russian Civil War
, date = October Revolution, 7 November 1917 – Yakut revolt, 16 June 1923{{Efn, The main phase ended on 25 October 1922. Revolt against the Bolsheviks continued Basmachi movement, in Central Asia and Tungus Republic, the Far East th ...
.
![Pn-meeting-profsojuz-1998-chubais](https://upload.wikimedia.org/wikipedia/commons/1/15/Pn-meeting-profsojuz-1998-chubais.jpg)
Following the economic collapse of the early 1990s, Russia suffered from a sharp increase in the rates of
poverty
Poverty is the state of having few material possessions or little income. Poverty can have diverse social, economic, and political causes and effects. When evaluating poverty in ...
and
economic inequality
There are wide varieties of economic inequality, most notably income inequality measured using the distribution of income (the amount of money people are paid) and wealth inequality measured using the distribution of wealth (the amount of we ...
. Estimates by the
World Bank
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
based on both macroeconomic data and surveys of household incomes and expenditures indicate that whereas 1.5% of the population was living in poverty (defined as income below the equivalent of $25 per month) in the late Soviet era, by mid-1993 between 39% and 49% of the population was living in poverty. Per capita incomes fell by another 15% by 1998, according to government figures.
Public health indicators show a dramatic corresponding decline. Although all post-Soviet countries experience an immediate decline in birth-rates due to economic turmoil this may have been particularly acute in Russia. In 1999, total population fell by about three-quarters of a million people. Meanwhile, life expectancy dropped for men from 64 years in 1990 to 57 years by 1994, while women's dropped from 74 to about 71. Both health factors and a sharp increase in deaths of the youth demographic from unnatural causes (such as murders, suicides, and accidents) have significantly contributed to this trend. Closely related to the declining life expectancy, alcohol-related deaths skyrocketed 60% in the 1990s and deaths from infectious and parasitic diseases shot up 100%, mainly because medicines were no longer affordable to the poor.
While the opening of the Russian market to imports in the early 1990s meant the nation no longer suffered from the supply shortages of consumer goods that was often characteristic of the USSR (''see''
Consumer goods in the Soviet Union
Consumer goods in the Soviet Union were usually produced by a two-category industry. Group A was "heavy industry", which included all goods that serve as an input required for the production of some other, final good. Group B was "consumer goods" ...
), the relative impoverishment of the Russian people during this time meant only a limited number saw any significant benefit. Russians on fixed incomes (the vast majority of the workforce) saw their purchasing power drastically reduced, so while the stores might have been well stocked in the Yeltsin era, average people could now afford to buy little, if anything from these stores. By 2011, the average income has risen to more than $700 per month, emblematic of the mild recovery in recent years largely due to high oil prices. The growing revenue, however, has not been evenly distributed.
Social inequality
Social inequality occurs when resources in a given society are distributed unevenly, typically through norms of allocation, that engender specific patterns along lines of socially defined categories of persons. It posses and creates gender c ...
has risen sharply since the 1990s with the
Gini coefficient, for example, reaching 42% by the end of 2010. Russia's income disparities are now nearly as large as
Brazil
Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
(which has long been a world leader in the area) while regional disparities in the level of poverty continue to trend upwards.
Backlash
Structural reform and a severe devaluation of the ruble lowered the standard of living for most segments of the Russian population. As a result, there was powerful political opposition to reform. Democratization opened the political channels for venting these frustrations, which translated into votes for anti-reform candidates, especially those of the
Communist Party of the Russian Federation
, anthem =
, seats1_title = Seats in the State Duma
, seats1 =
, seats2_title = Seats in the Federation Council
, seats2 =
, seats3_title = Governors
, seats3 =
, seats4_title ...
and its allies in the
Duma
A duma (russian: дума) is a Russian assembly with advisory or legislative functions.
The term ''boyar duma'' is used to refer to advisory councils in Russia from the 10th to 17th centuries. Starting in the 18th century, city dumas were for ...
. Russian voters, able to vote for opposition parties in the 1990s, often rejected economic reforms and yearned for the stability and personal security of the Soviet era. These were the groups that had enjoyed the benefits of Soviet-era state-controlled wages and prices, high state spending to subsidize priority sectors of the economy, protection from competition with foreign industries, and welfare entitlement programs. During the Yeltsin years in the 1990s, these anti-reformist groups were well organized, voicing their opposition to reform through strong trade unions, associations of directors of state-owned firms, and political parties in the popularly elected parliament whose primary constituencies were among those vulnerable to reform. A constant theme of Russian history in the 1990s was the conflict between economic reformers and those hostile to the new capitalism.
In the 1990s, former Soviet bureaucrats, factory directors, aggressive businessmen and criminal organizations used insider deals, bribery and simple brute force in order to grab lucrative assets, which were previously state-owned. Russia's new "capitalists" spent millions of dollars for protection. However, almost every business in Russia, from curbside vendors to huge oil and gas companies, made payments to the organized crime for protection ("
krysha
A protection racket is a type of racket and a scheme of organized crime perpetrated by a potentially hazardous organized crime group that generally guarantees protection outside the sanction of the law to another entity or individual from viol ...
"). Businessmen said that they needed the "krysha" because the laws and the court system were not functioning properly in Russia. The only way for them to enforce a contract was to turn to a criminal "krysha". They also used it to intimidate competitors, collect debts or take over new markets. It was also increasingly common for businesses to turn to the "red krysha"-corrupt police who ran
protection rackets. Within this system, a sharp rise in
contract killing
Contract killing is a form of murder or assassination in which one party hires another party to kill a targeted person or persons. It involves an illegal agreement which includes some form of payment, monetary or otherwise. Either party may be ...
s developed.
Crisis
Constitutional crisis
The struggle for the center of power in Soviet Russia following the collapse of the Soviet Union and for the nature of the economic reforms culminated in a political crisis and bloodshed in the autumn of 1993. Yeltsin, who represented a course of radical privatization, was opposed by the Supreme Soviet. Confronted with opposition to the presidential power of decree and threatened with impeachment, he "dissolved" the parliament on September 21, in contravention of the existing constitution, and ordered new elections and a referendum on a new constitution. The parliament then declared Yeltsin deposed and appointed
Aleksandr Rutskoy
Alexander Vladimirovich Rutskoy (russian: Александр Владимирович Руцкой; born 16 September 1947) is a Russian politician and a former Soviet military officer, Major General of Aviation (1991). He served as the only vic ...
acting president on September 22. Tensions built quickly, and matters came to a head after street riots on October 2–October 3. On October 4, Yeltsin ordered Special Forces and elite army units to storm the
parliament building, the "White House" as it is called. With tanks thrown against the small-arms fire of the parliamentary defenders, the outcome was not in doubt. Rutskoy,
Ruslan Khasbulatov
Ruslan Imranovich Khasbulatov (russian: link=no, Русла́н Имранович Хасбула́тов, ce, Хасбола́ти Имра́ни кIант Руслан) (born November 22, 1942) is a Russian economist and politician and the ...
, and the other parliamentary supporters surrendered and were immediately arrested and jailed. The official count was 147 dead, 437 wounded (with several men killed and wounded on the presidential side).
![White House-3](https://upload.wikimedia.org/wikipedia/commons/2/2c/White_House-3.JPG)
Thus the transitional period in post-Soviet Russian politics came to an end. A new constitution was approved by referendum in December 1993. Russia was given a strongly presidential system. Radical privatization went ahead. Although the old parliamentary leaders were released without trial on February 26, 1994, they would not play an open role in politics thereafter. Though its clashes with the executive would eventually resume, the remodeled Russian parliament had greatly circumscribed powers. (''For details on the constitution passed in 1993 see
Constitution and government structure of Russia.'')
First Chechen War
![Evstafiev-helicopter-shot-down](https://upload.wikimedia.org/wikipedia/commons/6/6a/Evstafiev-helicopter-shot-down.jpg)
In 1994, Yeltsin dispatched 40,000 troops to the southern region of
Chechnya
Chechnya ( rus, Чечня́, Chechnyá, p=tɕɪtɕˈnʲa; ce, Нохчийчоь, Noxçiyçö), officially the Chechen Republic,; ce, Нохчийн Республика, Noxçiyn Respublika is a republic of Russia. It is situated in the ...
to prevent its secession from Russia. Living south of Moscow, the predominantly Muslim
Chechens
The Chechens (; ce, Нохчий, , Old Chechen: Нахчой, ''Naxçoy''), historically also known as ''Kisti'' and ''Durdzuks'', are a Northeast Caucasian ethnic group of the Nakh peoples native to the North Caucasus in Eastern Europe. "Europ ...
for centuries had gloried in defying Russia.
Dzhokhar Dudayev, Chechnya's nationalist president, was driven to take his republic out of the Russian Federation, declaring independence in 1991. Gripped by the chaos of the Soviet Union's ongoing dissolution, Chechnya initially operated as a de facto independent nation-though this status was never recognized by Russia. In 1994, the
Russian Armed Forces
The Armed Forces of the Russian Federation (, ), commonly referred to as the Russian Armed Forces, are the military forces of Russia. In terms of active-duty personnel, they are the world's fifth-largest military force, with at least two m ...
invaded and quickly became submerged in a military quagmire. In January 1995, the Russian army and air force commenced a siege of the Chechen capital of
Grozny
Grozny ( rus, Грозный, p=ˈgroznɨj; ce, Соьлжа-ГӀала, translit=Sölƶa-Ġala), also spelled Groznyy, is the capital city of Chechnya, Russia.
The city lies on the Sunzha River. According to the 2010 census, it had a pop ...
; about 25,000 Chechen civilians died under week-long air raids and artillery fire in the sealed-off city. Massive use of artillery and air-strikes remained the dominating strategy throughout the Russian campaign. Even so, Chechen forces seized thousands of Russian hostages, while inflicting humiliating losses on the demoralized and ill-equipped Russian troops.
The Russians finally managed to gain control of Grozny by February 1995 after heavy fighting. In August 1996, Yeltsin agreed to a ceasefire with Chechen leaders, and a peace treaty was formally signed in May 1997. However, the conflict resumed in 1999, this time the rebellion was crushed by
Vladimir Putin
Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
.
Rise of the oligarchs
The new capitalist opportunities presented by the opening of the Russian economy in the late 1980s and early 1990s affected many people's interests. As the Soviet system was being dismantled, well-placed bosses and technocrats in the Communist Party, KGB, and
Komsomol
The All-Union Leninist Young Communist League (russian: link=no, Всесоюзный ленинский коммунистический союз молодёжи (ВЛКСМ), ), usually known as Komsomol (; russian: Комсомол, links=n ...
(Soviet Youth League) were cashing in on their Soviet-era power and privileges. Some quietly liquidated the assets of their organization and secreted the proceeds in overseas accounts and investments. Others created banks and business in Russia, taking advantage of their insider positions to win exclusive government contracts and licenses and to acquire financial credits and supplies at artificially low, state-subsidized prices in order to transact business at high, market-value prices. Great fortunes were made almost overnight.
Between 1987 and 1992, trading of natural resources and foreign currencies, as well as imports of highly demanded consumer goods and then domestic production of their rudimentary substitutes, rapidly enabled these pioneering entrepreneurs to accumulate considerable wealth. In turn, the emerging cash-based, highly opaque markets provided a breeding ground for a large number of racket gangs.
By the mid-1990s, the best-connected former
nomenklatura
The ''nomenklatura'' ( rus, номенклату́ра, p=nəmʲɪnklɐˈturə, a=ru-номенклатура.ogg; from la, nomenclatura) were a category of people within the Soviet Union and other Eastern Bloc countries who held various key admi ...
leaders accumulated considerable financial resources, while on the other hand, the most successful entrepreneurs became acquainted with government officials and public politicians. The privatization of state enterprises was a unique opportunity because it gave many of those who had gained wealth in the early 1990s a chance to convert it into shares of privatized enterprises.
The Yeltsin government hoped to use privatization to spread ownership of shares in former state enterprises as widely as possible to create political support for his government and his reforms. The government used a system of free vouchers as a way to give mass privatization a jump-start. But it also allowed people to purchase shares of stock in privatized enterprises with
cash
In economics, cash is money in the physical form of currency, such as banknotes and coins.
In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-imm ...
. Even though initially each citizen received a voucher of equal face value, within months most of the vouchers converged in the hands of intermediaries who were ready to buy them for cash right away.
As the government ended the
voucher privatization
Voucher privatization is a privatization method where citizens are given or can inexpensively buy a book of vouchers that represent potential shares in any state-owned company. Voucher privatization has mainly been used in the early to mid-1990s i ...
phase and launched cash privatization, it devised a program that it thought would simultaneously speed up privatization and yield the government a much-needed infusion of cash for its operating needs. Under the scheme, which quickly became known in the West as "loans for shares," the Yeltsin regime auctioned off substantial packages of stock shares in some of its most desirable enterprises, such as
energy
In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat a ...
,
telecommunication
Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than that fe ...
s, and
metallurgical
Metallurgy is a domain of materials science and engineering that studies the physical and chemical behavior of metallic elements, their inter-metallic compounds, and their mixtures, which are known as alloys.
Metallurgy encompasses both the sc ...
firms, as
collateral
Collateral may refer to:
Business and finance
* Collateral (finance), a borrower's pledge of specific property to a lender, to secure repayment of a loan
* Marketing collateral, in marketing and sales
Arts, entertainment, and media
* ''Collate ...
for bank loans.
In exchange for the loans, the state handed over assets worth many times as much. Under the terms of the deals, if the Yeltsin government did not repay the loans by September 1996, the lender acquired title to the stock and could then resell it or take an equity position in the enterprise. The first
auction
An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition ex ...
s were held in the fall of 1995. The auctions themselves were usually held in such a way so to limit the number of banks bidding for shares and thus to keep the auction prices extremely low. By summer 1996, major packages of shares in some of Russia's largest firms had been transferred to a small number of major banks, thus allowing a handful of powerful banks to acquire substantial ownership shares over major firms at shockingly low prices. These deals were effectively giveaways of valuable state assets to a few powerful, well-connected, and wealthy financial groups.
The concentration of immense financial and industrial power, which loans for shares had assisted, extended to the mass media. One of the most prominent of the financial barons
Boris Berezovsky, who controlled major stakes in several banks and companies, exerted an extensive influence over state
television
Television, sometimes shortened to TV, is a telecommunication medium for transmitting moving images and sound. The term can refer to a television set, or the medium of television transmission. Television is a mass medium for advertisin ...
programming for a while. Berezovsky and other ultra-wealthy, well-connected tycoons who controlled these great empires of finance, industry, energy, telecommunications, and media became known as the "
Russian oligarchs
Russian oligarchs (Russian: олигархи, romanized: ''oligarkhi'') are business oligarchs of the former Soviet republics who rapidly accumulated wealth in the 1990s via the Russian privatisation that followed the dissolution of the Soviet ...
". Along with Berezovsky,
Mikhail Khodorkovsky
Mikhail Borisovich Khodorkovsky (russian: link=no, Михаил Борисович Ходорковский, ; born 26 June 1963), sometimes known by his initials MBK, is an exiled Russian businessman and opposition activist, now residing in L ...
,
Roman Abramovich
Roman Arkadyevich Abramovich (, ; he, רומן ארקדיביץ' אברמוביץ'; born 24 October 1966) is a Russian Russian oligarchs, oligarch and politician. He is the former owner of Chelsea F.C., Chelsea, a Premier League football club ...
,
Vladimir Potanin
Vladimir Olegovich Potanin (russian: Владимир Олегович Потанин; born 3 January 1961) is a Russian billionaire businessman. He acquired his wealth notably through the controversial loans-for-shares program in Russia in ...
,
Vladimir Bogdanov
Vladimir Leonidovich Bogdanov (russian: Владимир Леонидович Богданов; born 28 May 1951) is a Russian businessman and oil tycoon.
Biography and career
In 1973 he graduated from Tyumen Industrial Institute with a degre ...
,
Rem Viakhirev
Rem Ivanovich Viakhirev ( rus, Рем Ива́нович Вя́хирев, p=ˈrɛm ɪˈvanəvʲɪtɕ ˈvʲæxʲɪrʲɪf; 23 August 1934 – 11 February 2013) was a Russian businessman. From 1992 to 2001, he was chairman of Gazprom. In May 20 ...
,
Vagit Alekperov
Vagit Yusufovich Alekperov ( az, Vahid Yusuf oğlu Ələkbərov, russian: Вагит Юсуфович Алекперов; born 1 September 1950) is a Russian– Azerbaijani businessman. He was the President of the oil company Lukoil from 1993 unti ...
,
Viktor Chernomyrdin
Viktor Stepanovich Chernomyrdin (russian: Ви́ктор Степа́нович Черномы́рдин, ; 9 April 19383 November 2010) was a Soviet and Russian politician and businessman. He was the Minister of Gas Industry of the Soviet Unio ...
,
Viktor Vekselberg
Viktor Felixovich Vekselberg (russian: Виктор Феликсович Вексельберг, uk, Віктор Феліксович Вексельберг; born April 14, 1957) is a Ukrainian-born Russian–Israeli-Cyprus oligarch, billion ...
, and
Mikhail Fridman
Mikhail Maratovich Fridman (also transliterated Mikhail Friedman; russian: Михаил Маратович Фридман; he, מיכאיל פרידמן; born 21 April 1964) is a Ukrainian-born, Russian–Israeli businessman, billionaire, and ...
emerged as Russia's most powerful and prominent oligarchs.
A tiny clique who used their connections built up during the last days of the Soviet years to appropriate Russia's vast resources during the rampant privatizations of the Yeltsin years, the oligarchs emerged as the most hated men in the nation. The Western world generally advocated a quick dismantling of the Soviet
planned economy
A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, part ...
to make way for "free-market reforms," but later expressed disappointment over the newfound power and corruption of the "oligarchs."
Presidential election of 1996
Campaigns
Early in the campaign it had been thought that Yeltsin, who was in uncertain health (after recuperating from a series of heart attacks) and whose behavior was sometimes erratic, had little chance for reelection. When campaigning opened at the beginning of 1996, Yeltsin's popularity was close to zero. Meanwhile, the opposition
Communist Party of the Russian Federation
, anthem =
, seats1_title = Seats in the State Duma
, seats1 =
, seats2_title = Seats in the Federation Council
, seats2 =
, seats3_title = Governors
, seats3 =
, seats4_title ...
had already gained ground in parliamentary voting on December 17, 1995, and its candidate,
Gennady Zyuganov
Gennady Andreyevich Zyuganov (russian: Генна́дий Андре́евич Зюга́нов; born 26 June 1944) is a Russian politician, who has been the General Secretary of the Communist Party of the Russian Federation and served as ...
, had a strong grassroots organization, especially in the rural areas and small towns, and appealed effectively to memories of the old days of Soviet prestige on the international stage and the socialist domestic order.
Panic struck the Yeltsin team when opinion polls suggested that the ailing president could not win; members of his entourage urged him to cancel presidential elections and effectively rule as dictator from then on. Instead, Yeltsin changed his campaign team, assigning a key role to his daughter,
Tatyana Dyachenko
Tatyana Borisovna Yumasheva (russian: link=no, Татьяна Борисовна Юмашева, formerly Dyachenko, Дьяченко, née Yeltsina, Ельцина; born 17 January 1960) is the younger daughter of former Russian President Bori ...
, and appointing
Anatoly Chubais
Anatoly Borisovich Chubais (russian: Анатолий Борисович Чубайс; born 16 June 1955) is a Russian politician and economist who was responsible for privatization in Russia as an influential member of Boris Yeltsin's administ ...
campaign manager. Chubais, who was not just Yeltsin's campaign manager but also the architect of Russia's privatization program, set out to use his control of the privatization program as the key instrument of Yeltsin's reelection campaign.
The president's inner circle assumed that it had only a short time in which to act on privatization; it, therefore, needed to take steps that would have a large and immediate impact, making the reversal of reform prohibitively costly for their opponents. Chubais' solution was to co-opt potentially powerful interests, including enterprise directors and regional officials, in order to ensure Yeltsin's reelection.
The position of the enterprise directors to the program was essential to maintaining economic and social stability in the country. The managers represented one of the most powerful collective interests in the country; it was the enterprise managers who could ensure that labor did not erupt in a massive wave of strikes. The government, therefore, did not strenuously resist the tendency for voucher privatization to turn into "insider privatization," as it was termed, in which senior enterprise officials acquired the largest proportion of shares in privatized firms. Thus, Chubais allowed well-connected employees to acquire majority stakes in the enterprises. This proved to be the most widely used form of privatization in Russia. Three-quarters of privatized enterprises opted for this method, most often using vouchers. Real control thus wound up in the hands of the managers.
Support from the oligarchs was also crucial to Yeltsin's reelection campaign. The "loans for shares" giveaway took place in the run-up to the 1996 presidential election—at a point when it had appeared that Zyuganov might defeat Yeltsin. Yeltsin and his entourage gave the oligarchs an opportunity to scoop up some of Russia's most desirable assets in return for their help in his reelection effort. The oligarchs, in turn, reciprocated the favor.
In the spring of 1996, with Yeltsin's popularity at a low ebb, Chubais and Yeltsin recruited a team of six leading Russian financiers and media barons (all oligarchs) who bankrolled the Yeltsin campaign with $3 million and guaranteed coverage on television and in leading newspapers directly serving the president's campaign strategy. The media painted a picture of a fateful choice for Russia, between Yeltsin and a "return to totalitarianism." The oligarchs even played up the threat of civil war if a Communist were elected president.
In the outlying regions of the country, the Yeltsin campaign relied on its ties to other allies—the patron-client ties of the local governors, most of whom had been appointed by the president.
The Zyuganov campaign had a strong grass-roots organization, but it was simply no match for the financial resources and access to patronage that the Yeltsin campaign could marshal.
Yeltsin campaigned energetically, dispelling concerns about his health, exploiting all the advantages of incumbency to maintain a high media profile. To assuage voters' discontent, he made the claim that he would abandon some unpopular economic reforms and boost welfare spending, end the war in
Chechnya
Chechnya ( rus, Чечня́, Chechnyá, p=tɕɪtɕˈnʲa; ce, Нохчийчоь, Noxçiyçö), officially the Chechen Republic,; ce, Нохчийн Республика, Noxçiyn Respublika is a republic of Russia. It is situated in the ...
, pay wage and pension arrears, and abolish military conscription (he did not live up to his promises after the election, except for ending the Chechen war, which was halted for 3 years). Yeltsin's campaign also got a boost from the announcement of a $10 billion loan to the Russian government from the International Monetary Fund.
Grigory Yavlinsky
Grigory Alekseyevich Yavlinsky ( Russian: Григо́рий Алексе́евич Явли́нский; born 10 April 1952) is a Russian economist and politician. He authored the 500 Days Program, a plan for the transition of the Soviet regim ...
was the liberal alternative to Yeltsin and Zyuganov. He appealed to a well-educated middle class that saw Yeltsin as an incompetent alcoholic and Zyuganov as a Soviet-era throwback. Seeing Yavlinsky as a threat, Yeltsin's inner circle of supporters worked to bifurcate political discourse, thus excluding a middle ground—and convince voters that only Yeltsin could defeat the Communist "menace." The election became a two-man race, and Zyuganov, who lacked Yeltsin's resources and financial backing, watched helplessly as his strong initial lead was whittled away.
Elections
Voter turnout in the first round of the polling on June 16 was 69.8%. According to returns announced on June 17, Yeltsin won 35% of the vote; Zyuganov won 32%;
Aleksandr Lebed
Lieutenant General Alexander Ivanovich Lebed (russian: Алекса́ндр Ива́нович Ле́бедь, link=no; 20 April 1950 – 28 April 2002) was a Soviet and Russian military officer and politician who held senior positions in the Ai ...
, a populist ex-general, a surprisingly high 14.5%; liberal candidate Grigory Yavlinsky 7.4%; far-right nationalist
Vladimir Zhirinovsky
Vladimir Volfovich Zhirinovsky, ''né'' Eidelshtein (russian: link=false, Эйдельштейн) (25 April 1946 – 6 April 2022) was a Russian right-wing populist politician and the leader of the Liberal Democratic Party of Russia (LDPR) f ...
5.8%; and former Soviet president
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet politician who served as the 8th and final leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...
0.5%. With no candidate securing an absolute majority, Yeltsin and Zyuganov went into a second round of voting. In the meantime, Yeltsin co-opted a large segment of the electorate by appointing Lebed to the posts of national security adviser and secretary of the Security Council.
In the end, Yeltsin's election tactics paid off. In the run-off on July 3, with a turnout of 68.9%, Yeltsin won 53.8% of the vote and Zyuganov 40.3%, with the rest (5.9%) voting "against all".
Moscow
Moscow ( , US chiefly ; rus, links=no, Москва, r=Moskva, p=mɐskˈva, a=Москва.ogg) is the capital and largest city of Russia. The city stands on the Moskva River in Central Russia, with a population estimated at 13.0 million ...
and
Saint Petersburg
Saint Petersburg ( rus, links=no, Санкт-Петербург, a=Ru-Sankt Peterburg Leningrad Petrograd Piter.ogg, r=Sankt-Peterburg, p=ˈsankt pʲɪtʲɪrˈburk), formerly known as Petrograd (1914–1924) and later Leningrad (1924–1991), i ...
(formerly Leningrad) together provided over half of the incumbent president's support, but he also did well in large cities in the Urals and in the north and northeast. Yeltsin lost to Zyuganov in Russia's southern industrial heartland. The southern stretch of the country became known as the "
red belt", underscoring the resilience of the Communist Party in elections since the breakup of the Soviet Union.
Although Yeltsin promised that he would abandon his unpopular
neoliberal
Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent fa ...
austerity policies and increase public spending to help those suffering from the pain of capitalist reforms, within a month of his election, Yeltsin issued a decree canceling almost all of these promises.
Right after the election, Yeltsin's physical health and mental stability were increasingly precarious. Many of his executive functions thus devolved upon a group of advisers (most of whom had close links with the oligarchs).
Financial collapse
The global recession of 1998, which started with the
Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1 ...
in July 1997, exacerbated Russia's continuing economic crisis. Given the ensuing decline in world commodity prices, countries heavily dependent on the export of raw materials such as oil were among those most severely hit.
Oil
An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...
,
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
,
metal
A metal (from Greek μέταλλον ''métallon'', "mine, quarry, metal") is a material that, when freshly prepared, polished, or fractured, shows a lustrous appearance, and conducts electricity and heat relatively well. Metals are typicall ...
s, and
timber
Lumber is wood that has been processed into dimensional lumber, including beams and planks or boards, a stage in the process of wood production. Lumber is mainly used for construction framing, as well as finishing (floors, wall panels, wi ...
account for more than 80% of Russian exports, leaving the country vulnerable to swings in world prices. Oil is also a major source of government tax revenue which brought significant negative implications for Russia's fiscal situation, foreign exchange stores and ultimately, the value of the ruble.
The pressures on the ruble, reflecting the weakness of the economy, resulted in a disastrous fall in the value of the currency. Massive
tax evasion
Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxp ...
continued and accelerated due to financial instability and decreasing government capacity. This further decreased government revenues and soon, the central government found itself unable to service the massive loans it had accumulated and ultimately was even unable to pay its employees. The government stopped making timely payment of wages, pensions, and debts to suppliers; and when workers were paid, it was often with bartered goods rather than rubles. Coal miners were especially hard hit, and for several weeks in the summer they blocked sections of the
Trans-Siberian railroad
The Trans-Siberian Railway (TSR; , , ) connects European Russia to the Russian Far East. Spanning a length of over , it is the longest railway line in the world. It runs from the city of Moscow in the west to the city of Vladivostok in the eas ...
with protests, effectively cutting the country in two. As time wore on, they added calls for the resignation of Yeltsin in addition to their demands for wages.
A political crisis came to a head in March when Yeltsin suddenly dismissed Prime Minister Viktor Chernomyrdin and his entire cabinet on March 23. Yeltsin named a virtually unknown technocrat, Energy Minister
Sergei Kiriyenko
Sergey Vladilenovich Kiriyenko (''Birth name, né'' ''Izraitel''; russian: Серге́й Владиле́нович Кирие́нко; born 26 July 1962) is a Russian politician who has served as First Deputy Chief of Staff of the Presidentia ...
, aged 35, as acting prime minister. Russian observers expressed doubts about Kiriyenko's youth and inexperience. The Duma rejected his nomination twice. Only after a month-long standoff, during which Yeltsin threatened to dissolve the legislature, did the Duma confirm Kiriyenko on a third vote on April 24.
Kiriyenko appointed a new cabinet strongly committed to stemming the fall in the value of Russia's currency. The oligarchs strongly supported Kiriyenko's efforts to maintain the exchange rate. A high exchange rate meant that they needed fewer rubles to buy imported goods, especially luxury items.
In an effort to prop up the currency and stem the flight of capital, Kiriyenko hiked interest rates to 150% in order to attract buyers for government bonds. But concerns about the financial crisis in Asia and the slump in world oil prices were already prompting investors to withdraw from Russia. By mid-1998, it was clear Russia would need help from IMF to maintain its exchange rate.
The Russian crisis caused alarm in the West. Pouring more money into the Russian economy would not be a long-term solution, but the U.S. in particular feared that Yeltsin's government would not survive a looming financial crisis without IMF help. U.S. President
Bill Clinton
William Jefferson Clinton ( né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and agai ...
's treasury secretary,
Robert Rubin
Robert Edward Rubin (born August 29, 1938) is an American retired banking executive, lawyer, and former government official. He served as the 70th United States Secretary of the Treasury during the Clinton administration. Before his government ...
, also feared that a Russian collapse could create a panic on world money markets (and it indeed did help bring down one major US hedge fund
Long-Term Capital Management
Long-Term Capital Management L.P. (LTCM) was a highly-leveraged hedge fund. In 1998, it received a $3.6 billion bailout from a group of 14 banks, in a deal brokered and put together by the Federal Reserve Bank of New York.
LTCM was founded in 1 ...
). The IMF approved a $22.6 billion emergency loan on July 13.
Despite the bailout, Russia's monthly interest payments still well exceeded its monthly tax revenues. Realizing that this situation was unsustainable, investors continued to flee Russia despite the IMF bailout. Weeks later the financial crisis resumed and the value of the ruble resumed its fall, and the government fell into a self-perpetuating trap. To pay off the interest on the loans it had taken, it needed to raise still more cash, which it did through foreign borrowing. As lenders became increasingly certain that the government could not make good on its obligations, they demanded ever-higher interest rates, deepening the trap. Ultimately the bubble burst.
On August 17, Kiriyenko's government and the central bank were forced to suspend payment on Russia's foreign debt for 90 days, restructure the nation's entire debt, and devalue the ruble. The ruble went into free fall as Russians sought frantically to buy dollars. Western creditors lost heavily, and a large part of Russia's fledgling banking sector was destroyed, since many banks had substantial dollar borrowings. Foreign investment rushed out of the country, and financial crisis triggered an unprecedented flight of capital from Russia.
Political fallout
The financial collapse produced a political crisis, as Yeltsin, with his domestic support evaporating, had to contend with an emboldened opposition in the parliament. A week later, on August 23, Yeltsin fired Kiryenko and declared his intention of returning Chernomyrdin to office as the country slipped deeper into economic turmoil. Powerful business interests, fearing another round of reforms that might cause leading concerns to fail, welcomed Kiriyenko's fall, as did the Communists.
Yeltsin, who began to lose his hold as his health deteriorated, wanted Chernomyrdin back, but the legislature refused to give its approval. After the Duma rejected Chernomyrdin's candidacy twice, Yeltsin, his power clearly on the wane, backed down. Instead, he nominated Foreign Minister
Yevgeny Primakov
Yevgeny Maksimovich Primakov (29 October 1929 – 26 June 2015) was a Russian politician and diplomat who served as Prime Minister of Russia from 1998 to 1999. During his long career, he also served as Foreign Minister, Speaker of the Supreme ...
, who on September 11 was overwhelmingly approved by the Duma.
Primakov's appointment restored political stability because he was seen as a compromise candidate able to heal the rifts between Russia's quarreling interest groups. There was popular enthusiasm for Primakov as well. Primakov promised to make the payment of wage and pension arrears his government's first priority, and invited members of the leading parliamentary factions into his Cabinet.
Communists and trade unionists staged a nationwide strike on October 7, and called on President Yeltsin to resign. On October 9, Russia, which was also suffering from a bad harvest, appealed for international humanitarian aid, including food.
Recovery
Russia bounced back from the August 1998 financial crash with surprising speed. Much of the reason for the recovery is that world oil prices rapidly rose during 1999–2000 (just as falling energy prices on the world market had deepened Russia's financial troubles) so that Russia ran a large trade surplus in 1999 and 2000. Another reason is that domestic industries such as food processing have benefited from the devaluation, which caused a steep increase in the prices of imported goods.
Also, since Russia's economy was operating to such a large extent on barter and other non-monetary instruments of exchange, the financial collapse had far less of an impact on many producers than it would had the economy been dependent on a banking system. Finally, the economy has been helped by an infusion of cash; as enterprises were able to pay off arrears in back wages and taxes, it, in turn, allowed consumer demand for the goods and services of Russian industry to rise. For the first time in many years, unemployment in 2000 fell as enterprises added workers.
Nevertheless, the political and social equilibrium of the country remains tenuous to this day, and power remains a highly personalized commodity. The economy remains vulnerable to downturn if, for instance, world oil prices fall at a dramatic pace.
Succession crisis
Yevgeny Primakov did not remain in his post long. Yeltsin grew suspicious that Primakov was gaining in strength and popularity and dismissed him in May 1999, after only eight months in office. Yeltsin then named
Sergei Stepashin
Sergei Vadimovich Stepashin (russian: Сергей Вадимович Степашин; born 2 March 1952) is a Russian politician who briefly served as Prime Minister of Russia in 1999. Prior to this he had been appointed as federal security m ...
, who had formerly been head of the
FSB (the successor agency to the
KGB
The KGB (russian: links=no, lit=Committee for State Security, Комитет государственной безопасности (КГБ), a=ru-KGB.ogg, p=kəmʲɪˈtʲet ɡəsʊˈdarstvʲɪn(ː)əj bʲɪzɐˈpasnəsʲtʲɪ, Komitet gosud ...
) and later been Interior Minister, to replace him. The Duma confirmed his appointment on the first ballot by a wide margin.
Stepashin's tenure was even shorter than Primakov's. In August 1999, Yeltsin once again abruptly dismissed the government and named
Vladimir Putin
Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
as his candidate to head the new government. Like Stepashin, Putin had a background in the secret police, having made his career in the foreign intelligence service and later as head of the FSB. Yeltsin went so far as to declare that he saw Putin as his successor as president. The Duma narrowly voted to confirm Putin.
When appointed, Putin was a relatively unknown politician, but he quickly established himself both in public opinion and in Yeltsin's estimation as a trusted head of government, largely due to the
Second Chechen War
The Second Chechen War (russian: Втора́я чече́нская война́, ) took place in Chechnya and the border regions of the North Caucasus between the Russia, Russian Federation and the Chechen Republic of Ichkeria, from Augus ...
. Just days after Yeltsin named Putin as a candidate for prime minister, Chechen forces
engaged the Russian army in
Dagestan
Dagestan ( ; rus, Дагеста́н, , dəɡʲɪˈstan, links=yes), officially the Republic of Dagestan (russian: Респу́блика Дагеста́н, Respúblika Dagestán, links=no), is a republic of Russia situated in the North C ...
, a Russian autonomy near
Chechnya
Chechnya ( rus, Чечня́, Chechnyá, p=tɕɪtɕˈnʲa; ce, Нохчийчоь, Noxçiyçö), officially the Chechen Republic,; ce, Нохчийн Республика, Noxçiyn Respublika is a republic of Russia. It is situated in the ...
. In the next month, several hundred people died in
apartment building bombings in Moscow and other cities, bombings Russian authorities attributed to Chechen rebels. In response, the Russian army entered Chechnya in late September 1999, starting the Second Chechen War. The Russian public at the time, angry over the
terrorist
Terrorism, in its broadest sense, is the use of criminal violence to provoke a state of terror or fear, mostly with the intention to achieve political or religious aims. The term is used in this regard primarily to refer to intentional violen ...
bombings, widely supported the war. The support translated into growing popularity for Putin, who had taken decisive action in Chechnya.
After
the success of political forces close to Putin in the December
1999 parliamentary elections, Yeltsin evidently felt confident enough in Putin that he resigned from the presidency on December 31, six months before his term was due to expire. This made Putin acting president and gave Putin ample opportunity to position himself as the frontrunner for the
Russian presidential election held on March 26, 2000, which he won. The Chechen War figured prominently in the campaign. In February 2000, Russian troops entered
Grozny
Grozny ( rus, Грозный, p=ˈgroznɨj; ce, Соьлжа-ГӀала, translit=Sölƶa-Ġala), also spelled Groznyy, is the capital city of Chechnya, Russia.
The city lies on the Sunzha River. According to the 2010 census, it had a pop ...
, the Chechen capital, and a week before the election, Putin flew to Chechnya on a fighter jet, claiming victory.
Putin era
In August 2000, the
Russian submarine K-141 Kursk
K-141 ''Kursk'' (russian: Атомная Подводная Лодка «Курск» (АПЛ «Курск»), Romanization of Russian, transl. , meaning "Atomic-powered submarine ''Kursk''") was an Oscar-class submarine, Oscar II-class nucle ...
suffered an explosion, causing the submarine to sink in the shallow area of the
Barents Sea
The Barents Sea ( , also ; no, Barentshavet, ; russian: Баренцево море, Barentsevo More) is a marginal sea of the Arctic Ocean, located off the northern coasts of Norway and Russia and divided between Norwegian and Russian territo ...
. Russia organized a vigorous but hectic attempt to save the crew, and the entire futile effort was surrounded by unexplained secrecy. This, as well as the slow initial reaction to the event and especially to the offers of foreign aid in saving the crew, brought much criticism on the government and personally on President Putin.
On October 23, 2002,
Chechen separatists took over a Moscow theater. Over 700 people inside were taken hostage in what has been called the
Moscow theater hostage crisis
The Moscow theater hostage crisis (also known as the 2002 Nord-Ost siege) was the seizure of the crowded Dubrovka Theater by Chechen terrorists on 23 October 2002, which involved 850 hostages and ended with Russian security services killing o ...
. The separatists demanded the immediate withdrawal of Russian forces from
Chechnya
Chechnya ( rus, Чечня́, Chechnyá, p=tɕɪtɕˈnʲa; ce, Нохчийчоь, Noxçiyçö), officially the Chechen Republic,; ce, Нохчийн Республика, Noxçiyn Respublika is a republic of Russia. It is situated in the ...
and threatened to blow up the building if authorities attempted to enter. Three days later, Russian commandos stormed the building after the hostages had been subdued with a sleeping gas, shooting the unconscious militants, and killing over 100 civilian hostages with the sleeping gas in the process.
In the aftermath of the theater siege, Putin began renewed efforts to eliminate the Chechen insurrection. (''For additional details on the war in Chechnya under Putin, see
Second Chechen War
The Second Chechen War (russian: Втора́я чече́нская война́, ) took place in Chechnya and the border regions of the North Caucasus between the Russia, Russian Federation and the Chechen Republic of Ichkeria, from Augus ...
.'') The government canceled scheduled troop withdrawals, surrounded Chechen refugee camps with soldiers, and increased the frequency of assaults on separatist positions.
Chechen militants responded in kind, stepping up guerrilla operations and rocket attacks on federal helicopters. Several high-profile attacks have taken place. In May 2004, Chechen separatists assassinated
Akhmad Kadyrov
Akhmad-Khadzhi Abdulkhamidovich Kadyrov ce, Къадири Ӏабдулхьамидан кӀант Ахьмад-Хьажи, Q̇adiri Jabdulẋamidan khant Aẋmad-Ẋaƶi (23 August 1951 – 9 May 2004) was a Russian politician and revolutionar ...
, the pro-Russia Chechen leader who became the president of Chechnya 8 months earlier after an election conducted by Russian authorities. On August 24, 2004, two Russian aircraft were
bombed. This was followed by the
Beslan school hostage crisis
The Beslan school siege (also referred to as the Beslan school hostage crisis or the Beslan massacre) was a terrorist attack that started on 1 September 2004, lasted three days, involved the imprisonment of more than 1,100 people as hostages ( ...
in which Chechen separatists took 1,300 hostages. The initially high public support for the war in Chechnya has declined.
Putin has confronted several very influential oligarchs (
Vladimir Gusinsky
Vladimir Aleksandrovich Gusinsky (russian: Владимир Александрович Гусинский, ; born 6 October 1952) is a Russian media tycoon. He founded the Media-Most holding company that included the NTV free-to-air channel, ...
,
Boris Berezovsky and
Mikhail Khodorkovsky
Mikhail Borisovich Khodorkovsky (russian: link=no, Михаил Борисович Ходорковский, ; born 26 June 1963), sometimes known by his initials MBK, is an exiled Russian businessman and opposition activist, now residing in L ...
, in particular) who attained large stakes of state assets, allegedly through illegal schemes, during
the privatization process. Gusinsky and Berezovsky have been forced to leave Russia and give up parts of their assets. Khodorkovsky was jailed in Russia and has lost his
YUKOS
OJSC "Yukos Oil Company" (russian: ОАО Нефтяна́я Компа́ния Ю́КОС, links=no, ) was an oil and gas company based in Moscow, Russia. Yukos was acquired from the Russian government by Russian oligarch Mikhail Khodorkovs ...
company, formerly the largest oil producer in Russia. Putin's stand against oligarchs is generally popular with the Russian people, even though the jailing of Khodorkovsky was mainly seen as part of a takeover operation by government officials, according to another Levada-Center poll.
These confrontations have also led to Putin establishing control over Russian media outlets previously owned by the oligarchs. In 2001 and 2002, TV channels
NTV NTV may refer to:
Television
* NTV (Bangladesh), a Bengali-language satellite television channel in Bangladesh
* NTV (India), Telugu regional channel
* NTV (Kenya)
* NTV (Mongolia), a television channel based in Mongolia
* NTV (Newport Televis ...
(previously owned by Gusinsky),
TV6 and
TVS (owned by Berezovsky) were all taken over by media groups loyal to Putin. Similar takeovers have also occurred with print media.
Putin's popularity, which stems from his reputation as a strong leader, stands in contrast to the unpopularity of his predecessor, but it hinges on a continuation of economic recovery. Putin came into office at an ideal time: after the devaluation of the
ruble
The ruble (American English) or rouble (Commonwealth English) (; rus, рубль, p=rublʲ) is the currency unit of Belarus and Russia. Historically, it was the currency of the Russian Empire and of the Soviet Union.
, currencies named ''rub ...
in 1998, which boosted demand for domestic goods, and while world
oil price
The price of oil, or the oil price, generally refers to the spot price of a barrel () of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Ref ...
s were rising. Indeed, during the seven years of his presidency, real GDP grew on average 6.7% a year, average income increased 11% annually in real terms, and a consistently positive balance of the federal budget enabled the government to cut 70% of the external debt (according to the
Institute for Complex Strategic Studies
An institute is an organisational body created for a certain purpose. They are often research organisations (research institute, research institutes) created to do research on specific topics, or can also be a professional body.
In some countr ...
). Thus, many credited him with the recovery, but his ability to withstand a sudden economic downturn has been untested. Putin won the
Russian presidential election in March 2004 without any significant competition.
Some researchers assert that most Russians (as of 2007) have come to regret the collapse of the
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
in 1991. On repeated occasions, even Vladimir Putin—Boris Yeltsin's handpicked successor — stated that the fall of Soviet rule had led to few gains and many problems for most Russian citizens. In a campaign speech in February 2004, for example, Putin called the dismantlement of the Soviet Union a "national tragedy on an enormous scale," from which "only the elites and nationalists of the republics gained." He added, "I think that ordinary citizens of the former Soviet Union and the post-Soviet space gained nothing from this. On the contrary, people have faced a huge number of problems."
Putin's international prestige suffered a major blow in the West during the disputed
2004 Ukrainian presidential election
Presidential elections were held in Ukraine on 31 October, 21 November and 26 December 2004. The election was the fourth presidential election to take place in Ukraine following independence from the Soviet Union. The last stages of the election ...
. Putin had twice visited Ukraine before the election to show his support for the pro-Russian
Viktor Yanukovych
Viktor Fedorovych Yanukovych ( uk, Віктор Федорович Янукович, ; ; born 9 July 1950) is a former politician who served as the fourth president of Ukraine from 2010 until he was removed from office in the Revolution of Di ...
against opposition leader
Viktor Yushchenko
Viktor Andriyovych Yushchenko ( uk, Віктор Андрійович Ющенко, ; born 23 February 1954) is a Ukrainian politician who was the third president of Ukraine from 23 January 2005 to 25 February 2010.
As an informal leader of th ...
, a pro-Western liberal economist. He congratulated Yanukovych, followed shortly afterwards by Belarusian president
Alexander Lukashenko
Alexander Grigoryevich Lukashenko (as transliterated from Russian language, Russian; also transliterated from Belarusian language, Belarusian as Alyaksand(a)r Ryhoravich Lukashenka;, ; rus, Александр Григорьевич Лука ...
, on his victory before election results were even made official and made statements opposing the rerun of the disputed second round of elections, won by Yanukovych, amid allegations of large-scale voting fraud. The second round was ultimately rerun; Yushchenko won the round and was eventually declared the winner on January 10, 2005. In the West, the reaction to Russia's handling of, or perhaps interference in, the Ukrainian election evoked echoes of the
Cold War
The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because the ...
, but relations with the U.S. have remained stable.
![Victory Day Parade 2005-26](https://upload.wikimedia.org/wikipedia/commons/3/32/Victory_Day_Parade_2005-26.jpg)
On 14 March 2004,
Putin was elected to the presidency for a second term, receiving 71% of the vote.
The
Beslan school hostage crisis
The Beslan school siege (also referred to as the Beslan school hostage crisis or the Beslan massacre) was a terrorist attack that started on 1 September 2004, lasted three days, involved the imprisonment of more than 1,100 people as hostages ( ...
took place in September 2004, in which hundreds died. Many in the Russian press and in the international media warned that the death of 130 hostages in the special forces' rescue operation during the 2002
Moscow theater hostage crisis
The Moscow theater hostage crisis (also known as the 2002 Nord-Ost siege) was the seizure of the crowded Dubrovka Theater by Chechen terrorists on 23 October 2002, which involved 850 hostages and ended with Russian security services killing o ...
would severely damage President Putin's popularity. However, shortly after the siege had ended, the Russian president enjoyed record public approval ratings – 83% of Russians declared themselves satisfied with Putin and his handling of the siege.
In 2005, the Russian government replaced the broad in-kind Soviet-era benefits, such as free transportation and subsidies for heating and other utilities for socially vulnerable groups by cash payments. The reform, known as
monetization
Monetization ( also spelled monetisation) is, broadly speaking, the process of converting something into money. The term has a broad range of uses. In banking, the term refers to the process of converting or establishing something into legal tend ...
, has been unpopular and caused a wave of demonstrations in various Russian cities, with thousands of retirees protesting against the loss of their benefits. This was the first time such wave of protests took place during the
Putin administration. The reform hurt the popularity of the Russian government, but Putin personally remained popular, with a 77% approval rating.
The near 10-year period prior to the rise of Putin after the dissolution of Soviet rule was a time of upheaval in Russia. In a 2005
Kremlin
The Kremlin ( rus, Московский Кремль, r=Moskovskiy Kreml', p=ˈmɐˈskofskʲɪj krʲemlʲ, t=Moscow Kremlin) is a fortified complex in the center of Moscow founded by the Rurik dynasty, Rurik dynasty. It is the best known of th ...
speech, Putin characterized the collapse of the
Soviet Union
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...
as the "greatest geopolitical catastrophe of the Twentieth Century." Putin elaborated: "Moreover, the epidemic of disintegration infected Russia itself." The country's cradle-to-grave
social safety net
The social safety net (SSN) consists of non-contributory assistance existing to improve lives of vulnerable families and individuals experiencing poverty and destitution. Examples of SSNs are previously-contributory social pensions, in-kind and fo ...
was gone and life expectancy declined in the period preceding Putin's rule. In 2005, the
National Priority Projects
The National Priority Projects of Russia (russian: Приоритетные национальные проекты России) was a program of the Russian government set out by Russian President Vladimir Putin in his speech on 5 September 2 ...
were launched to improve Russia's
health care
Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
,
education
Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty. Va ...
,
housing
Housing, or more generally, living spaces, refers to the construction and assigned usage of houses or buildings individually or collectively, for the purpose of shelter. Housing ensures that members of society have a place to live, whether it ...
and
agriculture
Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to ...
.
![Vladimir Putin 8 March 2008-3](https://upload.wikimedia.org/wikipedia/commons/7/73/Vladimir_Putin_8_March_2008-3.jpg)
The continued criminal prosecution of Russia's then richest man, President of
Yukos
OJSC "Yukos Oil Company" (russian: ОАО Нефтяна́я Компа́ния Ю́КОС, links=no, ) was an oil and gas company based in Moscow, Russia. Yukos was acquired from the Russian government by Russian oligarch Mikhail Khodorkovs ...
oil and gas company
Mikhail Khodorkovsky
Mikhail Borisovich Khodorkovsky (russian: link=no, Михаил Борисович Ходорковский, ; born 26 June 1963), sometimes known by his initials MBK, is an exiled Russian businessman and opposition activist, now residing in L ...
, for fraud and
tax evasion
Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxp ...
was seen by the international press as a retaliation for Khodorkovsky's donations to both liberal and communist opponents of the Kremlin. The government said that Khodorkovsky was "corrupting" a large segment of the Duma to prevent changes to the tax code. Khodorkovsky was arrested, Yukos was bankrupted and the company's assets were auctioned at below-market value, with the largest share acquired by the state company
Rosneft
PJSC Rosneft Oil Company ( stylized as ROSNEFT) is a Russian Vertical integration, integrated energy company headquartered in Moscow. Rosneft specializes in the exploration, Extraction of petroleum, extraction, production, refining, Petroleum t ...
. The fate of Yukos was seen as a sign of a broader shift of Russia towards a system of
state capitalism
State capitalism is an economic system in which the state undertakes business and commercial (i.e. for-profit) economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital a ...
. This was underscored in July 2014 when shareholders of Yukos were awarded $50 billion in compensation by the
Permanent Arbitration Court in
The Hague
The Hague ( ; nl, Den Haag or ) is a city and municipality of the Netherlands, situated on the west coast facing the North Sea. The Hague is the country's administrative centre and its seat of government, and while the official capital of ...
.
On 7 October 2006,
Anna Politkovskaya
Anna Stepanovna Politkovskaya (;, ; uk, Ганна Степанівна Політковська , 30 August 1958 – 7 October 2006) was a Russian journalist and human rights activist, who reported on political events in Russia, in partic ...
, a journalist who exposed corruption in the
Russian army
The Russian Ground Forces (russian: Сухопутные войска В Sukhoputnyye voyska V, also known as the Russian Army (, ), are the Army, land forces of the Russian Armed Forces.
The primary responsibilities of the Russian Gro ...
and its conduct in
Chechnya
Chechnya ( rus, Чечня́, Chechnyá, p=tɕɪtɕˈnʲa; ce, Нохчийчоь, Noxçiyçö), officially the Chechen Republic,; ce, Нохчийн Республика, Noxçiyn Respublika is a republic of Russia. It is situated in the ...
, was shot in the lobby of her apartment building, on Putin's birthday. The death of Politkovskaya triggered international criticism, with accusations that Putin has failed to protect the country's new independent media. Putin himself said that her death caused the government more problems than her writings.
In 2007, "
Dissenters' March
The Dissenters' March (russian: Марш несогласных) was a series of Russian opposition protests that took place on December 16, 2006 in Moscow, on March 3, 2007 in Saint Petersburg, on March 24 in Nizhny Novgorod, on April 14 for t ...
es" were organized by the opposition group
The Other Russia, led by former chess champion
Garry Kasparov
Garry Kimovich Kasparov (born 13 April 1963) is a Russian chess grandmaster, former World Chess Champion, writer, political activist and commentator. His peak rating of 2851, achieved in 1999, was the highest recorded until being surpassed by ...
and national-Bolshevist leader
Eduard Limonov
Eduard Veniaminovich Savenko ( rus, Эдуард Вениаминович Савенко, , ɨdʊˈart vʲɪnʲɪɐˈmʲinəvʲɪtɕ sɐˈvʲenkə, links=yes; 22 February 1943 – 17 March 2020), known by his pen name Eduard Limonov ( rus, Эд ...
. Following prior warnings, demonstrations in several Russian cities were met by police action, which included interfering with the travel of the protesters and the arrests of as many as 150 people who attempted to break through police lines.
On 12 September 2007, Putin dissolved the government upon the request of Prime Minister
Mikhail Fradkov
Mikhail Yefimovich Fradkov ( rus, Михаи́л Ефи́мович Фрадко́в, p=mʲɪxɐˈil jɪˈfʲiməvʲɪtɕ frɐtˈkof; born 1 September 1950) is a Russian politician who served as Prime Minister of Russia from 2004 to 2007. An In ...
. Fradkov commented that it was to give the President a "free hand" in the run-up to the parliamentary election.
Viktor Zubkov
Viktor Alekseyevich Zubkov ( rus, Ви́ктор Алексе́евич Зубко́в, p=ˈvʲiktər ɐlʲɪˈksʲejɪvʲɪtɕ zʊpˈkof; born 15 September 1941) is a Russian civil servant, politician and businessman who served as the 36th Pr ...
was appointed the new prime minister.
In the
December 2007 election,
United Russia
United Russia ( rus, Единая Россия, Yedinaya Rossiya, (j)ɪˈdʲinəjə rɐˈsʲijə) is a Conservatism in Russia, Russian conservative List of political parties in Russia, political party. As the largest party in Russia, it hold ...
won 64.30% of the popular vote in their run for
State Duma
The State Duma (russian: Госуда́рственная ду́ма, r=Gosudárstvennaja dúma), commonly abbreviated in Russian as Gosduma ( rus, Госду́ма), is the lower house of the Federal Assembly of Russia, while the upper house ...
. This victory was seen by many as an indication of strong popular support of the then Russian leadership and its policies.
At the end of Putin's second term,
Jonathan Steele Jonathan Steele may refer to:
*Jonathan Steele (journalist), British journalist and author
* Jonathan Steele (comics), the comic book series
* Jonny Steele, footballer
See also
*Jon Steel
Jon Steel , full name Jonathan Steel (born 14 March 19 ...
has commented on Putin's legacy: "What, then, is Putin's legacy? Stability and growth, for starters. After the chaos of the 90s, highlighted by Yeltsin's attack on the Russian parliament with tanks in 1993 and the collapse of almost every bank in 1998, Putin has delivered political calm and a 7% annual rate of growth. Inequalities have increased and many of the new rich are grotesquely crass and cruel, but not all the Kremlin's vast revenues from oil and gas have gone into private pockets or are being hoarded in the government's "stabilisation fund". Enough has gone into modernising schools and hospitals so that people notice a difference. Overall living standards are up. The second Chechen war, the major blight on Putin's record, is almost over".
Putin was barred from a third term by the
Constitution of Russia
The Constitution of the Russian Federation () was adopted by national referendum on 12 December 1993. Russia's constitution came into force on 25 December 1993, at the moment of its official publication, and abolished the Soviet system of gov ...
. First Deputy Prime Minister
Dmitry Medvedev
Dmitry Anatolyevich Medvedev ( rus, links=no, Дмитрий Анатольевич Медведев, p=ˈdmʲitrʲɪj ɐnɐˈtolʲjɪvʲɪtɕ mʲɪdˈvʲedʲɪf; born 14 September 1965) is a Russian politician who has been serving as the dep ...
was elected his successor. In a
power-switching operation on 8 May 2008, only a day after handing the presidency to Medvedev, Putin was appointed
Prime Minister of Russia
The chairman of the government of the Russian Federation, also informally known as the prime minister, is the nominal head of government of Russia. Although the post dates back to 1905, its current form was established on 12 December 1993 fo ...
, maintaining his political dominance.
![Tskhinval Yana Amelina 10](https://upload.wikimedia.org/wikipedia/commons/c/ce/Tskhinval_Yana_Amelina_10.jpg)
In 2008,
Kosovo's declaration of independence saw a marked deterioration in Russia's relationship with the West. It also saw
South Ossetia war against
Georgia
Georgia most commonly refers to:
* Georgia (country), a country in the Caucasus region of Eurasia
* Georgia (U.S. state), a state in the Southeast United States
Georgia may also refer to:
Places
Historical states and entities
* Related to the ...
, that followed Georgia's attempt to take over the breakaway region of
South Ossetia
South Ossetia, ka, სამხრეთი ოსეთი, ( , ), officially the Republic of South Ossetia – the State of Alania, is a partially recognised landlocked state in the South Caucasus. It has an officially stated populat ...
. Russian troops entered South Ossetia and forced Georgian troops back, establishing their control on this territory. In the fall of 2008, Russia unilaterally recognized the independence of
South Ossetia
South Ossetia, ka, სამხრეთი ოსეთი, ( , ), officially the Republic of South Ossetia – the State of Alania, is a partially recognised landlocked state in the South Caucasus. It has an officially stated populat ...
and
Abkhazia
Abkhazia, ka, აფხაზეთი, tr, , xmf, აბჟუა, abzhua, or ( or ), officially the Republic of Abkhazia, is a partially recognised state in the South Caucasus, recognised by most countries as part of Georgia, which vi ...
.
Putin has said that overcoming the consequences of the world economic crisis was one of the two main achievements of his second Premiership.
[ The other was the stabilizing the size of Russia's population between 2008 and 2011 following a long period of demographic collapse that began in the 1990s.][
]
At the United Russia
United Russia ( rus, Единая Россия, Yedinaya Rossiya, (j)ɪˈdʲinəjə rɐˈsʲijə) is a Conservatism in Russia, Russian conservative List of political parties in Russia, political party. As the largest party in Russia, it hold ...
Congress in Moscow on 24 September 2011, Medvedev officially proposed that Putin stand for the Presidency in March 2012, an offer Putin accepted. Given United Russia's near-total dominance of Russian politics, many observers believed that Putin was assured of a third term. The move was expected to see Medvedev stand on the United Russia ticket in the parliamentary elections in December, with a goal of becoming Prime Minister at the end of his presidential term.
After the parliamentary elections
A general election is a political voting election where generally all or most members of a given political body are chosen. These are usually held for a nation, state, or territory's primary legislative body, and are different from by-elections ( ...
on 4 December 2011, tens of thousands of Russians engaged in protests
A protest (also called a demonstration, remonstration or remonstrance) is a public expression of objection, disapproval or dissent towards an idea or action, typically a political one.
Protests can be thought of as acts of coopera ...
against alleged electoral fraud, the largest protests in Putin's time. Protesters criticized Putin and United Russia
United Russia ( rus, Единая Россия, Yedinaya Rossiya, (j)ɪˈdʲinəjə rɐˈsʲijə) is a Conservatism in Russia, Russian conservative List of political parties in Russia, political party. As the largest party in Russia, it hold ...
and demanded annulment of the election results.[''Russian election protests – follow live updates'']
''The Guardian''. Retrieved 10 December 2011 Those protests sparked the fear of a colour revolution
Colour revolution (sometimes coloured revolution) is a term used since around 2004 by worldwide media to describe various anti-regime protest movements and accompanying (attempted or successful) changes of government that took place in post ...
in society. Putin allegedly organized a number of paramilitary groups loyal to himself and to the United Russia party in the period between 2005 and 2012.
On 4 March 2012, Putin won the 2012 Russian presidential elections in the first round, with 63.6% of the vote, despite widespread accusations of vote-rigging.[ Opposition groups accused Putin and the ]United Russia
United Russia ( rus, Единая Россия, Yedinaya Rossiya, (j)ɪˈdʲinəjə rɐˈsʲijə) is a Conservatism in Russia, Russian conservative List of political parties in Russia, political party. As the largest party in Russia, it hold ...
party of fraud. While efforts to make the elections transparent were publicized, including the usage of webcam
A webcam is a video camera which is designed to record or stream to a computer or computer network. They are primarily used in videotelephony, livestreaming and social media, and security. Webcams can be built-in computer hardware or peripheral d ...
s in polling stations, the vote was criticized by the Russian opposition and by international observers from the Organization for Security and Co-operation in Europe
The Organization for Security and Co-operation in Europe (OSCE) is the world's largest regional security-oriented intergovernmental organization with observer status at the United Nations. Its mandate includes issues such as arms control, prom ...
for procedural irregularities.
Anti-Putin protests took place during and directly after the presidential campaign. The most notorious protest was the Pussy Riot
Pussy Riot is a Russian feminist protest and performance art group based in Moscow that became popular for its provocative punk rock music which later turned into a more accessible style. Founded in August 2011, it has had a membership of appr ...
performance on 21 February, and subsequent trial. An estimated 8,000–20,000 protesters gathered in Moscow on 6 May,[Провокация вместо марша]
vz.ru when eighty people were injured in confrontations with police, and 450 were arrested, with another 120 arrests taking place the following day.
In 2012 and 2013, Putin and the United Russia party backed stricter legislation against the LGBT
' is an initialism that stands for lesbian, gay, bisexual, and transgender. In use since the 1990s, the initialism, as well as some of its common variants, functions as an umbrella term for sexuality and gender identity.
The LGBT term is a ...
community, in Saint Petersburg
Saint Petersburg ( rus, links=no, Санкт-Петербург, a=Ru-Sankt Peterburg Leningrad Petrograd Piter.ogg, r=Sankt-Peterburg, p=ˈsankt pʲɪtʲɪrˈburk), formerly known as Petrograd (1914–1924) and later Leningrad (1924–1991), i ...
, Archangelsk
Arkhangelsk (, ; rus, Арха́нгельск, p=ɐrˈxanɡʲɪlʲsk), also known in English as Archangel and Archangelsk, is a city and the administrative center of Arkhangelsk Oblast, Russia. It lies on both banks of the Northern Dvina near i ...
and Novosibirsk
Novosibirsk (, also ; rus, Новосиби́рск, p=nəvəsʲɪˈbʲirsk, a=ru-Новосибирск.ogg) is the largest city and administrative centre of Novosibirsk Oblast and Siberian Federal District in Russia. As of the Russian Census ...
; a law called the Russian gay propaganda law
The Russian federal law "for the Purpose of Protecting Children from Information Advocating a Denial of Traditional Family Values", also referred to in English-language media as Russia's gay propaganda law or anti-gay law, is a bill that was una ...
, that is against "homosexual propaganda" (which prohibits such symbols as the rainbow flag
A rainbow flag is a multicolored flag consisting of the colors of the rainbow. The designs differ, but many of the colors are based on the spectral colors of the visible light spectrum.
The LGBT flag introduced in 1978 is the most recogniz ...
as well as published works containing homosexual content) was adopted by the State Duma
The State Duma (russian: Госуда́рственная ду́ма, r=Gosudárstvennaja dúma), commonly abbreviated in Russian as Gosduma ( rus, Госду́ма), is the lower house of the Federal Assembly of Russia, while the upper house ...
in June 2013. Responding to international concerns about Russia's legislation, Putin asked critics to note that the law was a "ban on the propaganda of pedophilia and homosexuality" and he stated that homosexual visitors to the 2014 Winter Olympics
, ''Zharkie. Zimnie. Tvoi'')
, nations = 88
, events = 98 in 7 sports (15 disciplines)
, athletes = 2,873
, opening = 7 February 2014
, closing = 23 February 2014
, opened_by = President Vladimir Putin
, cauldron =
, stadium = Fisht Olympic ...
should "leave the children in peace" but denied there was any "professional, career or social discrimination" against homosexuals in Russia.
Russo-Ukrainian war
On 22 February 2014, the Yanukovych government of Ukraine collapsed as a result of the Revolution of Dignity
The Revolution of Dignity ( uk, Революція гідності, translit=Revoliutsiia hidnosti) also known as the Maidan Revolution or the Ukrainian Revolution, , which the Russian government called a foreign backed proxy movement. On the same day, according to Russian president Vladimir Putin
Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
, he called an all-night meeting of his military leaders, at the end of which he ordered them to “begin the work to bring Crimea back into Russia.” By February 27, unmarked Russian troops in Ukraine were establishing a blockade of the borders and Ukrainian military bases in the Autonomous Republic of Crimea
The Autonomous Republic of Crimea, commonly known as Crimea, is a de jure autonomous republic of Ukraine encompassing most of Crimea that was annexed by Russia in 2014. The Autonomous Republic of Crimea occupies most of the peninsula, , and took armed control of its regional parliament.
A new Ukrainian government was formed and scheduled new elections for May 2014. On 1 March, from exile, Viktor Yanukovych
Viktor Fedorovych Yanukovych ( uk, Віктор Федорович Янукович, ; ; born 9 July 1950) is a former politician who served as the fourth president of Ukraine from 2010 until he was removed from office in the Revolution of Di ...
requested that Russia use military forces "to establish legitimacy, peace, law and order, stability and defending the people of Ukraine". On the same day, Vladimir Putin
Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
requested and received authorization from the Russian Parliament to deploy Russian troops to Ukraine in response to the crisis and gained complete control over Crimean Peninsula within a day.
On 6 March 2014, the Crimean Parliament voted to "enter into the Russian Federation with the rights of a subject of the Russian Federation" and later held a referendum
A referendum (plural: referendums or less commonly referenda) is a direct vote by the electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a representative. This may result in the adoption of a ...
asking the people of these regions whether they wanted to join Russia as a federal subject
The federal subjects of Russia, also referred to as the subjects of the Russian Federation (russian: субъекты Российской Федерации, subyekty Rossiyskoy Federatsii) or simply as the subjects of the federation (russian ...
, or if they wanted to restore the 1992 Crimean constitution and Crimea's status as a part of Ukraine
Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
. Though passed with an overwhelming majority, the results are contested by some and approved by others.
Crimea and Sevastopol
Sevastopol (; uk, Севасто́поль, Sevastópolʹ, ; gkm, Σεβαστούπολις, Sevastoúpolis, ; crh, Акъя́р, Aqyár, ), sometimes written Sebastopol, is the largest city in Crimea, and a major port on the Black Sea ...
formally declared independence as the Republic of Crimea
The Republic of Crimea, translit. ''Respublika Krym'' ; uk, Республіка Крим, translit. ''Respublika Krym'' ; crh, , is an unrecognized federal subject (republic) of Russia, located in the Crimean Peninsula. Its territory cor ...
and requested that they be admitted as constituents of the Russian Federation. On 18 March 2014, Russia and Crimea signed a treaty of accession of the Republic of Crimea and Sevastopol in the Russian Federation, while the United Nations General Assembly
The United Nations General Assembly (UNGA or GA; french: link=no, Assemblée générale, AG) is one of the six principal organs of the United Nations (UN), serving as the main deliberative, policymaking, and representative organ of the UN. Curr ...
voted in favor of a non-binding Resolution 68/262 to oppose Russia's annexation of the peninsula.
On 24 February 2022, Russia launched a full-scale invasion of Ukraine, although it was described as a "special military operation" by Putin. The invasion led to international condemnation followed by political, economic and cultural sanctions. The invasion also sparked protests around the world as well as within Russia.
On 21 September 2022, Vladimir Putin announced a partial mobilization. He also said that his country will use "all means" to "defend itself". Later that day, the minister of defence
A defence minister or minister of defence is a Cabinet (government), cabinet official position in charge of a ministry of defense, which regulates the armed forces in sovereign states. The role of a defence minister varies considerably from coun ...
Sergei Shoigu
Sergei Kuzhugetovich Shoigu, ; tyv, Сергей Күжүгет оглу Шойгу, translit=Sergey Kyzhyget oglu Shoygu, . (russian: Сергей Кужугетович Шойгу; born 21 May 1955) is a Russian politician who has served as ...
stated that 300,000 reservists would be called on a compulsory basis. Following president Putin's announcement of partial mobilization, massive Russian emigration began, with estimates of hundreds of thousands of male citizens fleeing, many going to Kazakhstan
Kazakhstan, officially the Republic of Kazakhstan, is a transcontinental country located mainly in Central Asia and partly in Eastern Europe. It borders Russia to the north and west, China to the east, Kyrgyzstan to the southeast, Uzbeki ...
, Serbia
Serbia (, ; Serbian language, Serbian: , , ), officially the Republic of Serbia (Serbian language, Serbian: , , ), is a landlocked country in Southeast Europe, Southeastern and Central Europe, situated at the crossroads of the Pannonian Bas ...
, Georgia
Georgia most commonly refers to:
* Georgia (country), a country in the Caucasus region of Eurasia
* Georgia (U.S. state), a state in the Southeast United States
Georgia may also refer to:
Places
Historical states and entities
* Related to the ...
and Finland
Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...
.
In late September 2022, Russian-installed officials in Ukraine organized 2022 annexation referendums in Russian-occupied Ukraine, referendums on annexation of occupied territories of Ukraine, including the Donetsk People's Republic and the Luhansk People's Republic in Russian occupied Donetsk and Luhansk oblasts of Ukraine, as well as the Russian-appointed military administrations of Kherson Oblast and Zaporizhzhia Oblast. Denounced by Ukraine's government and its allies as Sham election, sham, the official results showed overwhelming majorities in favor of annexation.On 30 September 2022, Russia's president Vladimir Putin
Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
announced the annexation of Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts of Ukraine in an address to both houses of the Russian parliament
The Federal Assembly ( rus, Федера́льное Собра́ние, r=Federalnoye Sobraniye, p=fʲɪdʲɪˈralʲnəjə sɐˈbranʲɪjə) is the national legislature of the Russian Federation, according to the Constitution of the Russian F ...
. The United Nations, Ukraine, and many other countries condemned the annexation.
Relations with the West
In the early period after Russia became independent, Russian foreign policy repudiated Marxism–Leninism as a putative guide to action, emphasizing cooperation with the West in solving regional and global problems, and soliciting economic and humanitarian aid from the West in support of internal economic reforms.
However, although Russia's leaders now described the West as its natural ally, they grappled with defining new relations with the East European states, the new states formed upon the disintegration of Yugoslavia
Yugoslavia (; sh-Latn-Cyrl, separator=" / ", Jugoslavija, Југославија ; sl, Jugoslavija ; mk, Југославија ;; rup, Iugoslavia; hu, Jugoszlávia; rue, label=Pannonian Rusyn, Югославия, translit=Juhoslavija ...
, and Eastern Europe. Russia opposed the expansion of NATO
The North Atlantic Treaty Organization (NATO, ; french: Organisation du traité de l'Atlantique nord, ), also called the North Atlantic Alliance, is an intergovernmental military alliance between 30 member states – 28 European and two No ...
into the former Soviet bloc nations of the Czech Republic, Poland, and Hungary in 1997 and, particularly, the second NATO expansion into Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia in 2004. In 1999, Russia opposed the NATO bombing of Yugoslavia
The North Atlantic Treaty Organization (NATO) carried out an aerial bombing campaign against the Federal Republic of Yugoslavia during the Kosovo War. The air strikes lasted from 24 March 1999 to 10 June 1999. The bombings continued until an a ...
for more than two months (''see'' Kosovo War
The Kosovo War was an armed conflict in Kosovo that started 28 February 1998 and lasted until 11 June 1999. It was fought by the forces of the Federal Republic of Yugoslavia (i.e. Serbia and Montenegro), which controlled Kosovo before the war ...
), but later joined NATO peace-keeping forces in the Balkans in June 1999.
Relations with the West have also been stained by Russia's relationship with Belarus
Belarus,, , ; alternatively and formerly known as Byelorussia (from Russian ). officially the Republic of Belarus,; rus, Республика Беларусь, Respublika Belarus. is a landlocked country in Eastern Europe. It is bordered by R ...
. Belarusian President Alexander Lukashenko
Alexander Grigoryevich Lukashenko (as transliterated from Russian language, Russian; also transliterated from Belarusian language, Belarusian as Alyaksand(a)r Ryhoravich Lukashenka;, ; rus, Александр Григорьевич Лука ...
, an authoritarian
Authoritarianism is a political system characterized by the rejection of political plurality, the use of strong central power to preserve the political ''status quo'', and reductions in the rule of law, separation of powers, and democratic votin ...
leader, has shown no interest in implementing Western-backed economic and political reforms and has aligned his country with Russia, and no interest in deepening ties with NATO. A union agreement between Russia and Belarus was formed on April 2, 1996. The agreement was tightened, becoming the Union of Russia and Belarus
The Union State,; be, Саю́зная дзяржа́ва Расі́і і Белару́сі, Sajuznaja dziaržava Rasii i Bielarusi, links=no. or Union State of Russia and Belarus,; be, Саю́зная дзяржа́ва, Sajuznaja dziar ...
on April 3, 1997. Further strengthening of the union occurred on December 25, 1998, and in 1999.
Under Putin, Russia has sought to strengthen ties with the People's Republic of China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
by signing the Treaty of Good-Neighborliness and Friendly Cooperation as well building the Trans-Siberian oil pipeline geared toward growing Chinese energy needs. He also made a number of appearances in the media with President of the United States
The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United Stat ...
George W. Bush
George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...
in which the two described each other as "friends".
See also
*Economy of Russia
The economy of Russia has gradually transformed from a planned economy into a mixed market-oriented economy.
—Rosefielde, Steven, and Natalia Vennikova. “Fiscal Federalism in Russia: A Critique of the OECD Proposals.” Cambridge Jou ...
*Military history of the Russian Federation
The military history of the Russian Federation began with the establishment of the Russian Armed Forces following the dissolution of the Soviet Union. This was followed by its engagements in post-Soviet conflicts, from Transdnester in 1992 onwar ...
*Politics of Russia
The politics of Russia take place in the framework of the federation, federal semi-presidential system, semi-presidential republic of Russia. According to the Constitution of Russia, the President of Russia is head of state, and of a multi-par ...
*Timeline of largest projects in the Russian economy
The economy of Russia has gradually transformed from a planned economy into a mixed market-oriented economy.
—Rosefielde, Steven, and Natalia Vennikova. “Fiscal Federalism in Russia: A Critique of the OECD Proposals.” Cambridge Journa ...
*Human rights in Russia
Human rights in Russia have routinely been criticized by international organizations and independent domestic media outlets. Some of the most commonly cited violations include deaths in custody, the widespread and systematic use of torture by s ...
Notes
References
Further reading
* Rosefielde, Steven. ''Putin's Russia: Economy, Defence and Foreign Policy'' (2020
excerpt
External links
Charles H. Fairbanks, Jr., "What Went Wrong in Russia?: The Feudalization of the State," ''Journal of Democracy'' (April 1999), p. 47–53.
(an analysis of the state of democratic transition in Russia by Charles H. Fairbanks, Jr., a leading specialist in Russian politics published in the ''Journal of Democracy
The ''Journal of Democracy'' is a quarterly academic journal established in 1990 and an official publication of the National Endowment for Democracy's International Forum for Democratic Studies. It covers the study of democracy, democratic regimes ...
'')
Post-Soviet Russia and Its Neighbors
from th
Dean Peter Krogh Foreign Affairs Digital Archives
(Paul J. Saunders is a specialist in U.S.-Russian relations and executive director of the Center for the National Interest
The Center for the National Interest is a Washington, D.C.-based public policy think tank. It was established by former U.S. President Richard Nixon on January 20, 1994, as the Nixon Center for Peace and Freedom.
The group changed its name to ...
)
Up for Debate: Shock Therapy: Bolivia, Poland, Russia. Same Policies-Different Results
From the PBS
The Public Broadcasting Service (PBS) is an American public broadcasting, public broadcaster and Non-commercial activity, non-commercial, Terrestrial television, free-to-air television network based in Arlington, Virginia. PBS is a publicly fu ...
series "Commanding Heights"
Up for Debate: Privatization: Who Wins? Russia's Reform Compromise
(interviews with Yegor Gaidar
Yegor Timurovich Gaidar (russian: link=no, Его́р Тиму́рович Гайда́р; ; 19 March 1956 – 16 December 2009) was a Soviet and Russian economist, politician, and author, and was the Acting Prime Minister of Russia from 15 Jun ...
, Grigory Yavlinsky
Grigory Alekseyevich Yavlinsky ( Russian: Григо́рий Алексе́евич Явли́нский; born 10 April 1952) is a Russian economist and politician. He authored the 500 Days Program, a plan for the transition of the Soviet regim ...
, Anatoly Chubais
Anatoly Borisovich Chubais (russian: Анатолий Борисович Чубайс; born 16 June 1955) is a Russian politician and economist who was responsible for privatization in Russia as an influential member of Boris Yeltsin's administ ...
, Joseph Stiglitz
Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the Joh ...
, and Jeffrey Sachs
Jeffrey David Sachs () (born 5 November 1954) is an American economist, academic, public policy analyst, and former director of The Earth Institute at Columbia University, where he holds the title of University Professor. He is known for his work ...
from the PBS series "Commanding Heights")
*Nick Paton Walsh, ''The Guardian
''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
'', July 6, 2005
"Meet the chief exec of Kremlin inc ..."
Failed Expectations, Or What Is Behind the Marshall Plan for Post-Socialist Reconstruction
', by Tanya Narozhna
"The Uncertain Return of Russian Power"
by Mike Haynes, analyses Putin's Russia and looks at claims that the reassertion of Russian power is leading to a new Cold War.
*Mike Edwards: "Russia — Playing by new rules" National Geographic Magazine
''National Geographic'' (formerly the ''National Geographic Magazine'', sometimes branded as NAT GEO) is a popular American monthly magazine published by National Geographic Partners. Known for its photojournalism, it is one of the most widely ...
March 1993
Mark Hollingsworth & Stewart Lansley, Londongrad: From Russia With Cash, 2009, 4th Estate
{{DEFAULTSORT:History Of Post-Soviet Russia
*1991
1991
File:1991 Events Collage.png, From left, clockwise: Boris Yeltsin, elected as Russia's first president, waves the new flag of Russia after the 1991 Soviet coup d'état attempt, orchestrated by Soviet hardliners; Mount Pinatubo erupts in the Phil ...
1991
File:1991 Events Collage.png, From left, clockwise: Boris Yeltsin, elected as Russia's first president, waves the new flag of Russia after the 1991 Soviet coup d'état attempt, orchestrated by Soviet hardliners; Mount Pinatubo erupts in the Phil ...
Russia
Russia (, , ), or the Russian Federation, is a List of transcontinental countries, transcontinental country spanning Eastern Europe and North Asia, Northern Asia. It is the List of countries and dependencies by area, largest country in the ...
New Russian Empire