Although Russia made some uneven progress in democratization during the 1990s, this limited
progress was reversed after Vladimir Putin rose to power in 1999-2000 (first as prime minister,
then as president), according to most observers. During this period, the State Duma (lower
legislative chamber) came to be dominated by government-approved parties, and opposition
democratic parties were excluded. Putin also abolished gubernatorial elections, placed controls on
the activities of non-governmental organizations (NGOs), and established government ownership
or control over major media and major industries, including the energy sector. Putin\u2019s suppression
of insurgency in the Chechnya republic demonstrated his government\u2019s generally low regard for
the rule of law and respect for human rights, according to these observers. Dmitry Medvedev,
Vladimir Putin\u2019s chosen successor and long-time prot\u00e9g\u00e9, was elected President in March 2008
with about 70% of the vote. Immediately after the election, Putin became Prime Minister.
President Medvedev generally has continued policies established during the Putin presidency. In
August 2008, the Medvedev-Putin \u201ctandem\u201d directed wide-scale military operations against
Georgia and unilaterally recognized the independence of Georgia\u2019s separatist South Ossetia and
Abkhazia, actions that most of the international community have censured.

The sharp decline in oil and gas prices since mid-2008 and other aspects of the global economic
downturn put a halt to a Russian economic expansion that had begun in 1999, resulting in an
officially reported 9.5% drop in gross domestic product in 2008 and an estimated 8-9% drop in
2009. These declines exacerbate existing problems: 15% of the population live below the poverty
line; inadequate healthcare contributes to a demographic decline; domestic and foreign
investment is low; inflation hovers around 12%-14%; and crime, corruption, capital flight, and
unemployment remain high.

Russia\u2019s military has been in turmoil after years of severe force reductions and budget cuts. The
armed forces now number about 1.2 million, down from 4.3 million Soviet troops in 1986.
Readiness, training, morale, and discipline have suffered. Russia\u2019s economic revival allowed it to
substantially increase defense spending. Some high-profile activities were resumed, such as
multi-national military exercises, Mediterranean and Atlantic naval deployments, and strategic
bomber patrols. Stepped-up military efforts were launched in late 2007 to further downsize the
armed forces and emphasize rapid reaction and contract forces. The global economic downturn
and strong opposition within some segments of the armed forces appears to have slowed down
force modernization. After the Soviet Union\u2019s collapse, the United States sought a cooperative
relationship with Moscow and supplied almost $17 billion to Russia from fiscal year 1992
through 2008 to support urgent humanitarian needs, to encourage democracy and market reform,
and to support WMD threat reduction. U.S. aid to reduce the threats posed by the proliferation of
weapons of mass destruction in recent years has hovered around $700-$900 million per fiscal
year, while other foreign aid to Russia has dwindled, due in part to the phase-out of some aid and
to congressional conditions. Despite rising U.S.-Russia tensions in recent years on issues such as
NATO enlargement, Kosovo\u2019s independence, and proposed U.S. missile defenses in Eastern
Europe, Washington and Moscow found some common ground on Iranian and North Korean
nuclear issues and on nuclear non-proliferation in general. The August 2008 Russia-Georgia
conflict threatened such cooperation. The Obama Administration has endeavored to \u201creset\u201d
relations with Russia to reinvigorate and expand bilateral cooperation. Russia welcomed the
Obama Administration\u2019s announcement in September 2009 of the cancellation of the planned
missile defense setup in Eastern Europe. The 111th Congress has held several hearings, introduced
and passed legislation, and otherwise has debated the future of U.S.-Russian relations.

Recent Developments.................................................................................................................. 1 Post-Soviet Russia and Its Significance for the United States....................................................... 2 Political and Human Rights Developments.................................................................................. 2

Background.......................................................................................................................... 2 The Putin-Medvedev Era....................................................................................................... 3 The Impasse of Political Pluralism........................................................................................ 5 Human Rights Problems........................................................................................................ 7 Insurgency in the North Caucasus......................................................................................... 8

Trade, Economic, and Energy Issues......................................................................................... 12
Russia and the Global Economic Crisis............................................................................... 12
Russia\u2019s Accession to the World Trade Organization (WTO) and PNTR for Russia.............. 13
Intellectual Property Rights (IPR) Enforcement in Russia.............................................. 13
Russian Energy Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Russia and the West............................................................................................................ 16 NATO-Russia Relations................................................................................................ 17 Russia and the European Union..................................................................................... 20

The Obama Administration Moves to \u201cRe-set\u201d Bilateral Relations...................................... 24
Bilateral Relations and Iran................................................................................................. 26
Bilateral Relations and Afghanistan..................................................................................... 27
Arms Control Issues............................................................................................................ 29
Cooperative Threat Reduction....................................................................................... 30
Russia and Missile Defense........................................................................................... 31
U.S.-Russia Economic Ties................................................................................................. 34
Russian Restrictions on Meat Imports........................................................................... 36