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Summary

Dmitry Medvedev, Vladimir Putin's chosen successor and long-time protege, was elected President of the Russian Federation on March 2, 2008 with about 70% of the vote. Medvedev, formerly First Deputy Prime Minister, announced during the campaign that if elected, he would propose Putin as Prime Minister. Medvedev was inaugurated as President on May 7; Putin was confirmed as Prime Minister the next day. The Kremlin's Unified Russia party had previously swept the legislative election (December 2, 2007), winning more than two-thirds of the seats in the Duma. U.S. and EU observers criticized both elections as unfairly controlled by the governing authorities. Nevertheless, Putin's widespread popularity in Russia led many to conclude that the election results corresponded to Russian public opinion. 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 5% drop in 2009. These declines exacerbate existing problems: 15% of the population live below the poverty line; inadequate healthcare contributes to a demographic decline; foreign investment is low; inflation hovers around 12%-14%; and crime, corruption, capital flight, and unemployment remain high. Russia's 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's 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's 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 placed on foreign aid to Russia. The United States at times has imposed economic sanctions on Russian organizations for exporting nuclear and military technology and equipment to Iran and Syria.The Russia-Georgia conflict of August 2008 was the most serious source of tensions between Russia and the United States since the end of the Cold War. Despite rising tension on issues such as NATO enlargement, Kosovo, and proposed U.S. missile defenses in Eastern Europe, Washington and Moscow had found some common ground on Iranian and North Korean nuclear issues and on nuclear non-proliferation in general. The Russia-Georgia conflict threatened such cooperation. The Obama Administration has endeavored to "reset" relations with Russia to reinvigorate and expand bilateral cooperation, including through a summit in July 2009. Russia welcomed the Obama Administration's announcement in September 2009 of the cancellation of the planned missile defense setup in Eastern Europe. The 111th Congress has held several hearings on Russia.

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