Russian Federation

In the years after 1991 Russia experienced a revolution in the name of reform. The Union of Soviet Socialist Republics had been a one-party dictatorship that strove to control all aspects of life. Its collapse unleashed a host of social forces and triggered an array of experiments as people sought simultaneously to create a democratic government, a market economy, and a civil society. Other countries, including other remnants of the Soviet Union, were attempting similar experiments on different scales at the same time. No one, however, had ever attempted this before, and there was no blueprint to follow. During this period, the administration of Boris Yeltsin would be identified with the destruction of the old structures, a struggle among alternative visions, and chaotic and sometimes contradictory efforts to build something new. The administration of Vladimir Putin would represent a longing to reestablish order, stability, and security.

The Soviet collapse in 1991 came with remarkable rapidity. Unlike the collapse of czarist Russia in 1917, which was also sudden, this one was neither preceded by a world war nor followed by a civil war. There were relatively few violent conflicts, and those tended to be clashes between rival nationalisms.

The last Soviet leader, Mikhail Gorbachev, had underestimated the attraction of nationalism to his country’s various constituent peoples and had overestimated people’s loyalty to the communist system. In forcing people, officials and citizens alike, to conceal their personal beliefs as well as inconvenient political and economic facts, the Soviet system had denied its own leaders the ability to gauge the true situation and had denied people in general the possibility of fully developing their own ideas. Gorbachev’s efforts to reform the system, in part by releasing the energies of the citizenry in the hope of using them against a sclerotic bureaucracy, resulted in the system’s demise.

Free multicandidate elections to a new national legislature in 1989 and elections to republic-level legislatures in 1990 unleashed a mass of rebellious and conflicting demands. In the course of the year, most of the republics declared “sovereignty” within the Soviet Union, that is, they asserted that republic law would henceforth be above federal law. The Russian Soviet Federative Socialist Republic, as the Russian portion of the Soviet Union was officially known, did so on June 12, 1990. At about the same time, the media began to free itself of government control. On the anniversary of the sovereignty declaration, June 12, 1991, while the republic was still part of the Soviet Union, Boris Yeltsin, a former Communist Party official who had fallen out with the leadership, became Russia’s first elected president.

A failed reactionary coup launched by party, military, and police officials in August 1991 was the final blow in the centrifugal process that was tearing the Soviet Union apart. In the aftermath, the Communist Party was dissolved and no comparable integrative institution was created to replace it. Yeltsin began appearing alongside Gorbachev, the Soviet president, as a coequal. Key republics, especially Ukraine, began to believe they would be better off without the “burden” of the other republics and moved toward independence. At the very least, they ceased forwarding tax receipts to the capital, compelling Russia to take over responsibility for financing central state functions.

On December 8, 1991, confronted with Ukraine’s precipitous unilateral independence, Yeltsin and the leaders of Ukraine and Belarus declared their republics a Commonwealth of Independent States (CIS), even though Russia had never formally withdrawn from the Soviet Union. Leaders of other republics, petrified at the prospect of their sudden isolation, immediately demanded membership in the CIS as well. On December 25, 1991, Gorbachev resigned from the presidency in frustration. No one attempted to replace him, and the Union of Soviet Socialist Republics legally ceased to exist. In many ways it had already evaporated, although just when this occurred is difficult to determine.

After a brief attempt to maintain unified CIS armed forces, the republics took control of the military assets of their respective territories and created their own armies. Republics with nuclear arms stationed on their territories agreed to send them to Russia. Each republic also acquired its portion of the assets of the Committee for State Security, which continued to exist in some form. In Russia the KGB underwent a series of renamings and reorganizations that ultimately left it as five separate entities: one each for internal security, foreign intelligence, border defense, communications security, and the personal protection of state leaders.


With the Soviet Union gone, the next question was what would replace it. The Russian Soviet Federative Social- ist Republic eventually renamed itself the Russian Fed- eration. The re-creation of a Russian national identity was somewhat complicated, not only by the presence of more than 120 ethnic minorities within the federation’s borders and by the fact that some 25 million ethnic Russians were now living as minorities in the 14 other successor states of the Soviet Union, but also by the fact that the pre-Soviet Russian state had included the entire Soviet territory. In the other former Soviet republics, as in Eastern Europe, the communist system could be viewed as something imposed by the Russians. There, nationalists, anticommunists, democrats, and economic reformers could form coalitions, at least in the begin- ning. In the Russian Federation, although some Russian nationalists had seen the other republics as a burden, others had identified with the Soviet Union as a great power and saw its collapse as a tragedy.

Some adherents of the Soviet system and some Russian nationalists nostalgic for the old empire saw in the CIS a potential replacement that would ultimately amount to a rebirth of the Soviet Union. This never came about. The leaders of the various republics focused on their own entities, and the CIS itself failed to develop into an alternative power center. Rather, the CIS functioned as a loose association that oversaw the peaceful severing of the numerous ties that linked the republics to one another. Russia, not the CIS, inherited the Soviet Union’s nuclear weapons, United Nations seat, overseas embassies, and foreign debt. This, however, did not prevent Russia from pressuring the more reluctant successor states into joining the CIS during the 1990s. Only the three Baltic States remained outside.

In the early days, Russians were concerned that the unraveling might not stop with the collapse of the Soviet Union. Within the Russian Federation were former “autonomous soviet socialist republics,” now simply termed “republics,” regions with a substantial non-Russian ethnic population. Several of these declared sovereignty over their natural resources and asserted the primacy of their laws over federation law. Some appeared to be contemplating independence. In March 1992 all but Tatarstan and Chechnya signed the new Federation Treaty; Yeltsin was compelled to renegotiate center-periphery relations on an ad hoc basis with several individual republics and even ethnic Russian regions. Tatarstan signed such an agreement in February 1994. In the end only Chechnya carried out the secessionist threat, triggering two wars with the Russian army.

Politically, two tendencies were prominent in the early years of Russian independence. For members of the first group, the highest-priority goals were the establishment of democratic norms and the rule of law, the creation of a viable market economy, and integration into the Western world. For the second group, the highest priorities were building a state strong enough to defend itself, both internally and externally; assuring that national industries survived; and preserving Russian uniqueness.

Constitutionally, the form that the Russian government was to take was also under dispute. The muchamended constitution of 1978 remained in force while negotiations continued over a new Russian constitution. In this, as in economic policy, Yeltsin and the legislature took strongly opposed positions. The legislature at the time continued the cumbersome form innovated in the Gorbachev era: a Congress of People’s Deputies, with 1,068 members, that was supposed to meet twice a year, vote on the most important issues, and elect

Saint Basil’s Cathedral in the Kremlin in Moscow during the Soviet era. The Soviet Union was a significant example of communism in the world. With the splintering of the Soviet Union, the different republics that had formed the union sought to redefine themselves. from among its own members a smaller legislature— the Supreme Soviet—to meet between its own sessions. The constitution’s provision that the legislature was the supreme state body was not modified after the creation of the elected Russian presidency in 1991.


The period from the end of 1991 to late 1993 was marked by economic crisis and political confrontation that ended in bloodshed. The two poles of confron- tation centered on the reformist presidency and the holdover parliament, the Congress of People’s Depu- ties, which fought a protracted battle over who held ultimate authority.

For the post of prime minister, Yeltsin named Yegor Gaidar, a young academic who had taught himself market economics during the late Soviet period, but the legislature refused to confirm him. Gaidar, nonetheless, continued in office as acting prime minister for one year.

The economy was in dire shape, quite apart from the normal inefficiencies of the centrally planned Soviet system. In the name of economic reform the Gorbachev government had ceased issuing orders to state-owned economic enterprises, but he had failed to establish the institutions of a market economy, resulting in a staterun system that did not work properly. The breakup of the Soviet state exacerbated the situation by disrupting economic ties between regions.

Gaidar’s response was a rapid shift, often termed “shock therapy,” to free prices, balanced budgets, and monetary restraint. This went into effect on January 1, 1992, and resulted in an enormous leap in prices in addition to the already existing shortages of supply. Normally, the shortages and rising prices should have worked as an incentive for enterprises to increase production. State enterprises, however, had not been privatized, and adequate market-based incentives had not been established. Wholesale trade, at the time, was still widely regarded as a form of illegal “speculation.”

The implicit assumption that an economy dominated by gigantic plants producing military equipment could instantaneously convert to the production of consumer goods was probably naive in any event. Managers commonly viewed the inflation as an opportunity to increase revenues while working less. When monetary restraint restricted cash flows, enterprise managers informally extended credit to each other and expended their political influence trying to get subsidies reinstated.

The Congress of People’s Deputies was the main focus of their attention. Elected in March 1990, the Congress was permeated with state-enterprise managers and former communists, most of whom now called themselves “independents.” It repeatedly doled out payments to bankrupt enterprises, undermining the intended impact of Gaidar’s policies; issued resolutions that contradicted government policies; and threatened the president with impeachment. For his part, Yeltsin responded with the threat to establish a “presidential republic.” Each side ignored the acts of the other, contributing to a growing general disregard for the law.

The personification of resistance to the president was the speaker of the Congress, Ruslan Khasbulatov; he and vice president Aleksandr Rutskoi moved steadily closer to the opposition. Both had been Yeltsin allies at the beginning of the transition.

In late 1992 Gaidar left the office of prime minister. His replacement, Viktor Chernomyrdin, was initially more acceptable to the Congress. Chernomyrdin was a hybrid bureaucrat-entrepreneur. As minister of the gas industry, he had participated in a “spontaneous privatization” that converted the ministry into one of Russia’s largest and most profitable companies, Gazprom. Nonetheless Chernomyrdin and his finance minister, Boris Fedorov, maintained the austerity policies and even closed some inefficient state enterprises. A referendum on economic reform and the division of power between the executive and legislative branches in April 1993 gave Yeltsin enough support to press ahead with his programs. Yeltsin and the legislature each began drawing up a new draft constitution.

The crisis came to a head in September 1993. To break the impasse, Yeltsin dissolved the Congress of People’s Deputies and called for a referendum on a new constitution and elections for a new legislature in December. Meeting in emergency session, the Congress impeached Yeltsin and declared Rutskoi president. On Yeltsin’s order, army units surrounded the legislative headquarters on September 27, but 180 members refused to leave. After a standoff of several days, Rutskoi called for a popular uprising, which led to some street disorders but not the outpouring of support that he had anticipated. Armed men seized the mayor’s office on October 3 and attempted to take the Ostankino television facility, where a firefight with Interior Ministry troops lasted for several hours. At this point, the army dropped the neutral position it had sought to maintain. On October 4 tanks opened fire, and by that afternoon the rebel leaders—including Khasbulatov and Rutskoi—had emerged and surrendered. After the “October events,” no parliament would defy the president so openly again. Disputes, however, were far from over.


Yeltsin’s draft constitution was approved by referen- dum in December 1993, in the shadow of the October events. It created a bicameral legislature, called the Fed- eral Assembly (Federal’noe Sobranie). The upper house, the Federation Council (Soviet Federatsii), had two members representing each of the country’s constituent regions, territories, and republics. The lower house, the State Duma (Gosudarstvennaia Duma), had 450 mem- bers, half of them elected from single-member districts and half from party lists.

The legislature was real, not a rubber stamp, but the constitution clearly gave the preponderance of power to the president. The president named the prime minister and cabinet, who were responsible to him. The cabinet, therefore, did not have to reflect the distribution of parties in the State Duma, so there was no incentive to form coalitions to build a parliamentary majority. Initially, committee chairmanships were doled out among parties and factions in proportion to the number of seats they held.

Technically, the State Duma had the right to approve or disapprove the president’s choice for prime minister, but if it rejected three candidates it was the legislature, not the government, that was subject to dissolution. Moreover, the president had the power to issue decrees on his own.

The first post-Soviet parliamentary elections were held simultaneously with the referendum approving the constitution, two years after the collapse of the Soviet Union. A number of political organizations had essentially evaporated in the interim. The parties that did exist were often small, fractious, personalistic, and only loosely connected to the electorate. Parties arose, combined, split, recombined, and vanished with great ease. The most substantial and organized party was the newly constituted Communist Party of the Russian Federation, although it lacked anything resembling the status and power of the former Communist Party of the Soviet Union.

The results of the elections were far from what Yeltsin and the reformers would have hoped for. The largest percentage of votes in the party-list portion of the ballot went to the Liberal Democratic Party of Russia, a misnamed authoritarian, ultranationalistic grouping with a leader, Vladimir Zhirinovsky, who was once described as a “dangerous buffoon.” The communists came in second. The reformists had split the vote by dividing into four separate parties that constantly squabbled among themselves, the two most important being Gaidar’s neoliberal Russia’s Choice and the more social-democratic Yabloko.

Despite the evident potential for renewed polarization, Russian politics did not return to the chaos of the pre-October days but settled down into a relatively normal pattern. Politicians of various stripes gradually became accustomed to open politics and even adept at it. Despite their extremist rhetoric, the ultranationalists proved relatively supportive of the government, and the communists could be counted on for a backroom deal when the need arose. The fractious reform parties, never satisfied with compromise, often created the greatest difficulty for the reform process.

Gaidar’s original reform plan came to be implemented more consistently, without Gaidar. Prime Minister Chernomyrdin became increasingly prominent, while Yeltsin occasionally receded into the background amid rumors of drinking and the state of his health. Economic policy was no longer undermined by subsidies granted to bankrupt factories by the legislature. Also, the privatization program made progress, although this required a presidential decree. The economic situation began to stabilize, but it did not fully recover and grow.

With new legislative elections planned in December 1995, Yeltsin eliminated elections for the upper house and determined that each jurisdiction would be represented by its governor and its legislative speaker. He also attempted to create two new parties as the basis for a two-party system: One, a center-right organization intended to become the government party, was led by Prime Minister Chernomyrdin; the other, envisioned as a center-left loyal opposition, was led by Ivan Rybkin. Chernomyrdin’s party, called Our Home Is Russia, managed to draw about 10 percent of the vote as long as he was prime minister. The second party, which was actually listed on the ballot as “Ivan Rybkin’s bloc,” never got off the ground. The relatively poor showing, if nothing else, indicated the limits on Yeltsin’s ability to manipulate the electorate.

Forty-three parties participated in the 1995 elections, but only four of them surpassed the 5 percent threshold necessary to obtain seats under the proportional-representation system. The four that did succeed were the Communists, the ultranationalist Liberal Democrats, Our Home Is Russia, and the socialdemocratic Yabloko. The Communists received the largest share this time, setting the stage for Russia’s first post-Soviet presidential election, to be held in two rounds in June and July 1996.

The Communists’ hard core of support constituted about 20–30 percent of the electorate at this time. Support was especially strong among pensioners and others who had suffered extreme hardships during the inflation and chaos of the early reform period. They had trouble, however, breaking beyond that core. Yeltsin, who had been doing very poorly in opinion polls, ran an anti-Communist campaign and eked out a plurality of 35 percent in the first round. Communist candidate Gennadii Zyuganov finished just behind him with 32 percent. Eight other candidates were eliminated from the second round. After hiring the third-place candidate as his national security adviser, Yeltsin then managed to consolidate the anti-Communist vote and was reelected in the second round, 54 percent to 40 percent. Significantly, all sides accepted the results of the election without protests or claims of fraud.


The establishment of new start-up businesses and the privatization of state enterprises proved difficult in Russia. Gigantic state enterprises had been designed as monopolies from the beginning, and adapting them to a competitive economy would be a true challenge. More- over, private business was widely considered unseemly if not criminal; even small-scale street vendors were deemed an unsightly embarrassment. Russians found private ownership of land and natural resources objec- tionable. Few people, of course, had the money to start a business. Nor were inflation and rising crime good incentives to invest. Five years into the reform period, Russia had only half as many start-up businesses as Poland, a country with a fourth as many people.

A small number of people, however, discovered a way of manipulating the half-reformed economy of the late 1980s and early 1990s to accumulate vast amounts of capital. Officials in economic ministries would declare portions of the ministry to be private companies. Factory managers would establish private businesses on the side and then lease the factory’s facilities to themselves.

Oil proved an especially useful asset for wealth generation. Fearing the political consequences of allowing domestic oil prices to rise to world levels, Russian leaders had made it possible to export oil at world prices, but maintained controlled domestic prices at less than 1 percent of the world price. Using connections and borrowed money, some people were able to buy large quantities of oil at domestic prices and sell it abroad for 100 times what they had paid. When large-scale privatization of state enterprises became a government priority, these were the people who had the resources and the connections to take advantage of it.

In the first phase of official privatization, starting in December 1991, small enterprises were sold off and larger ones were reorganized as joint-stock corporations. Arrangements were made for the workers and managers of smaller enterprises to acquire controlling interests for little or no money. This meant that the same managers continued to control an enterprise, but reformers hoped the fact of ownership would give them a stake in the factory’s success and sever their dependence on the state budget. If nothing else, this would undermine the political strength of the state economic bureaucracy, a center of resistance to reform.

In June 1992 a new element was added: a voucher program for the privatization of the now-corporatized medium and larger enterprises. Each citizen was issued a voucher worth 10,000 rubles, a total of some 144 million vouchers, to be invested in corporations or investment funds or simply traded or sold. This program was intended to accelerate privatization and to give common citizens a stake in the economy and the reform process, but since the vouchers were distributed for free it did not generate revenues for the state. The voucher phase was largely completed by mid-1994. Some 100,000 enterprises had been privatized, and they employed 80 percent of the workforce.

Many people had simply sold their vouchers for cash or later sold their shares, allowing well-placed people—such as factory managers and former government functionaries—to gain control of plants. This eroded the objective of encouraging widespread ownership, although it did not completely nullify it. The advantages that accrued to insiders generated resentment in the population.

The next phase of privatization called for the direct sale of shares in large enterprises, especially those in the energy and raw materials sectors, for cash. Because of resistance to this in the State Duma, the procedure was implemented by presidential decree in July 1994. It generated even more public skepticism and resent- ment. In 1995 the cash-strapped state offered shares in enterprises as collateral for bank loans, under rules established by the banks themselves. As expected, the state did not have the funds to repay a loan. The bank then auctioned off the shares, and generally the bank proved to be the only bidder. In this way the banks, and the oligarchs behind them, came to acquire control over large industrial empires at a fraction of their assessed value.

The Communists sought to make a campaign issue of the privatization scandal in the presidential election. Several oligarchs eagerly financed Yeltsin’s 1996 reelection campaign and put their media resources at his service. To neutralize the privatization issue at the national level, Yeltsin transferred ownership of 6,000 state enterprises to the regional governments to be auctioned, with the regions keeping the proceeds. The “loans for shares” program was reinstituted after the election. The oligarchs became increasingly prominent, through their own media outlets and through their growing role as government advisers and officials, during Yeltsin’s second term.


Six years after the beginning of economic reform, the Russian economy was still shrinking, although it was no longer in the free fall of 1992. The government was still unable to collect taxes, and many enterprises failed to pay their debts to each other. Barter had become the basis of much of economic life, with workers being paid in kind or in IOUs.

Yeltsin dismissed Chernomyrdin as prime minister in the spring of 1998 and appointed a young banker, Sergei Kirienko. A new team of reformers set out to establish a long-overdue legal framework for economic activity, to impose more predictability into the system in the place of what they called the existing “unlimited semi-bandit capitalism.” They were too late.

A severe financial crisis struck the Russian economy in the summer of 1998. In part, this was a reflection of the 1997 crisis in East Asia. Even more, it reflected the sudden decline in international oil prices. Oil exports had been the economy’s, and the government’s, principal revenue generator, paying for imports to cover the failure of domestic production to recover and compensating for the government’s lack of domestic tax revenues. With export revenues falling, the highly indebted government found it difficult to issue new bonds. Investors began moving their money out of Russia.

The International Monetary Fund provided a loan of $17.1 billion in return for a package of reforms to rationalize the tax code and reduce government expenditures, but this failed to stem the outflow of capital. After desperately trying to avoid either default on Russia’s foreign and domestic debt or devaluation of its currency, Kirienko, on August 17, 1998, did both. Prices skyrocketed and most oligarch banks failed, although the oligarchs themselves generally survived by shuffling their assets. Kirienko’s term in office proved brief, and he was just the first of four prime ministers during Yeltsin’s last three years as president.

Unexpectedly, the crisis also proved the turning point in the country’s economic recovery. Unable to afford imports, Russia began to produce things for itself again, and production continued as international oil prices recovered. In the following year, 1999, the economy grew for the first time in the post-Soviet era; in 2000 it grew 10 percent.


In the early years, the leaders of the new Russian Federa- tion were worried that Russia could unravel along eth- nic lines as the Soviet Union had done. They responded strongly to the one ethnic republic that did attempt to secede, Chechnya, even though that response was delayed by the general chaos prevailing in Russia in the early 1990s.

The Chechens were a Muslim people of the Causcasus Mountains who, in the 19th century, had fought a prolonged war against the Russian occupation of their region. Like several other Soviet minorities they had been accused by Stalin of collaborating with the Nazis, and they were all deported to Soviet Central Asia afterward. Nikita Khrushchev allowed their return, but when the Soviet Union collapsed, the Chechens sought secession. Under Dzhokhar Dudayev, a former Soviet air force general, Chechnya declared independence in 1991.

Yeltsin declared a state of emergency in Chechnya, issued a warrant for the arrest of Dudayev, and sent a detachment of Interior Ministry troops. The Chechens easily repulsed the half-hearted intervention, by ruse more than by force, and seized strategic facilities within their republic. Yeltsin ordered an economic blockade and then, given the chaotic state of Russia at the time, basically ignored the situation for the next three years. The lack of any police force facilitated smuggling and other criminal operations. In a search for outside resources and allies, the Chechens made contacts with mafias from Russia and Islamist extremists from the Middle East. Corruption spread, the economic situation grew dire, and Dudayev became more dictatorial.

After supporting a failed attempt by a rival Chechen faction to seize power, Russia sent three armored columns into Chechnya on December 11, 1994. The Russian legislature, which had not been informed, protested vociferously. The invasion did not go smoothly. The Russians made a hasty and ill-prepared assault on Grozny, the republic’s capital, which they seized only after a month-long bombardment that killed an estimated 25,000 people and left the city a ruin. Dudayev and his fighters receded into the mountains, from where they conducted an extended guerrilla campaign. Civilian casualties continued to run high. The struggle attracted Islamist volunteers from North Africa, the Middle East, and Afghanistan.

In March 1996, with presidential elections looming in Russia, Yeltsin offered to negotiate with Dudayev through an intermediary. A Russian missile killed Dudayev in April. Fighting flared again in June, and the Chechens reoccupied parts of three cities, including Grozny. A cease-fire was finally signed in August. Russian troops began to withdraw. Although the agreement left Chechnya’s permanent status to be decided, the republic proceeded to act as if it were independent.

Aslan Maskhadov, the chief of staff of the Chechen armed forces and a former Soviet army colonel, was elected president of the republic in January 1997. Little rebuilding was accomplished, however, and Maskhadov was unable to establish order. In the prevailing lawlessness, kidnapping for profit became a widespread practice. In an effort to outflank the Islamists in factional infighting, he imposed Islamic law and courts.


Chechnya became the focus of attention again in 1999. Shamyl Basayev, formerly a field commander and brief- ly a prime minister under Maskhadov, had broken with the Chechen regime. In April 1998 he and a Jordanian- born Islamist founded the Congress of the Peoples of Chechnya and Dagestan, which proposed to unite these two adjacent ethnic republics. In August 1999 they launched a raid into Dagestan and then declared that the republic had seceded from Russia. The following month, a series of bombs exploded in apartment build- ings in Moscow and other Russian cities. The act was widely attributed to the Chechens.

On August 9, 1999, Yeltsin dismissed Sergei Stepashin, who had been prime minister for three months, and appointed Vladimir Putin to replace him. Putin had catapulted through a number of Kremlin staff positions to become head of internal security in July 1998. He was still generally unknown to the public when he was named prime minister, but he quickly became associated with the new Chechen war, which was known as Putin’s “antiterrorist operation.” Opinion polls gave Putin an approval rating of 33 percent in August, 52 percent in September, and 65 percent in October, in a land where few politicians rose above single digits.

In October Russian armor was once again moving into Chechnya, without any distinction being made between the Chechen government and renegade commanders. The army performed more effectively this time. The cities were taken quickly, and a pro-Russian Chechen administration was put in place. Resistance, however, would drag on year after year in the countryside, and there would be terrorist attacks in other parts of Russia. Russian forces would respond at times with extreme brutality. With the bomb blasts fresh in people’s minds, however, this Chechen war was far more popular with the Russian public than the previous one.

Four months before the legislative elections of December 1999, Yeltsin once again created a new party from scratch, Unity, a party completely dependent on the Kremlin for funding, expertise, and personnel. Putin gave it his public endorsement, and the party, too, became identified with the Chechen war effort. Unity won 23 percent of the party-list vote and 64 singlemember districts, leaving it second only to the Communist Party. In third place was Fatherland–All Russia, a coalition of personalistic parties built around prominent governors. For the first time, the State Duma had a dominant bloc of parties that were not ideological adversaries of the Kremlin.

Yeltsin, within seven months of the end of his second term in office, surveyed a political landscape that suddenly appeared quite favorable. He then shocked the world by promptly resigning on December 31, 1999, and naming Putin as acting president. An early presidential election was called for March 26, 2000, which Yeltsin’s chosen successor would now approach with all the advantages of incumbency while other candidates were caught off guard. Indeed, Putin won in the first round with 52.9 percent of the vote against 10 other candidates, despite having been a virtual unknown the previous August. He promptly obliged his predecessor by issuing a blanket pardon for anything Yeltsin might have done during his years in office.

As president, Putin no longer devoted himself solely to the prosecution of the war. Economic reform continued but Putin’s primary focus appeared to be order, stability, security, and consolidation of the Russian state. Russia was very much in need of order by that time, but Putin’s notion of consolidating the state reflected his upbringing within the Soviet Union. Rather than make state institutions more effective, he set out to make all institutions dependent on the president.

Putin remained a largely unknown quantity, allowing others to see in him what they wanted. Moreover he surrounded himself with two distinct sets of officials: a group of economic reformers known as the “technocrats” and a group of people tied, as he himself was, to the military, police, and internal security services. For all his talk of order and predictability, Putin allowed these officials free rein to discredit and undermine each other’s initiatives.

Some measures did improve the effectiveness of the Russian state. Reforms were introduced and carried out in a more orderly fashion. The Duma no longer spent its time debating impeachment and censure bills. New requirements for the registration of a political party, including a minimum membership of 10,000, introduced some order into the chaotic party system. The tax code was reformed, instituting a 13 percent flat tax on both individuals and corporations, and it was actually enforced. This reduced nominal tax rates, but, because of previous evasion, it increased revenues. Annual budget surpluses suddenly became routine.

Power was being centralized in stages. The outcome of the December 1999 election had already strengthened Putin’s position. Relations between president and legislature became more productive. In 2001 Unity and the Fatherland–All Russia bloc were merged into a new pro-Putin party, eventually named United Russia, which was clearly the largest in the State Duma.

In the Federation Council, Putin replaced the elected governors and regional legislative heads with appointed representatives. Next, Putin interposed a new layer of government, grouping Russia’s 89 constituent jurisdictions into seven supraregional federal districts and placing an appointed presidential representative in charge of each. All federal employees in the regions, who had become increasingly dependent on the governors under Yeltsin, were now to answer to these representatives. Another new law then gave the president the right to remove elected governors accused of wrongdoing.

Another round of centralization began in 2004. Putin declared that the threat of separatist violence required a strengthening of the state. Thus in December 2004 he signed a law abolishing the election of governors, who would now be presidential appointees. At the same time, the minimum membership of a political party was raised from 10,000 to 50,000. Another law followed in May 2005 that eliminated single-member districts from the Duma, leaving all seats to be elected by proportional representation from party lists and raising the minimum threshold for representation from five percent of the vote to seven percent. How these measures would have helped Beslan remained unclear, but the latter was likely to end the independent existence of Yabloko and the Union of Right Forces (the successor party to Russia’s Choice), which by 2003 no longer mustered even five percent of the vote and entered the Duma only through single-member districts.

Far from alienating the electorate, Putin was rewarded at the polls for his perceived efforts to impose order and the improving economic situation. In the legislative elections of December 2003, his new party, United Russia, became the first ever to win an absolute majority in the State Duma. In the presidential elections of March 2004, Putin was reelected in the first round, over five other candidates, with 71.3 percent of the vote. International election observers, however, criticized the skewed electoral coverage in the media.


Putin sought to distance himself from the oligarchs, who had become closely identified with the Yeltsin adminis- tration in the public mind. In some cases he went so far as to intimidate and harass them. Rumors told of a tacit deal: If the oligarchs stayed out of politics, Putin would not order the police to investigate how they had become oligarchs. Not all oligarchs abided by the deal.

Putin’s first targets were Boris Berezovsky and Vladimir Gusinsky, both of whom had accumulated many enemies and both of whom controlled large media empires that had criticized the handling of the Chechen war. Berezovsky was well known and particularly disliked. Although he had actively supported Putin’s election, he spoke soon afterward of the need to form a new opposition party. Gusinsky had gone so far as to endorse the wrong presidential candidate in 2000. Whatever the specific reason, both ended up living in self-imposed exile and being stripped of many of their assets. In 2001 Gusinsky’s NTV, the country’s largest independent television network, was taken over by Gazprom, the gas giant. Thus, not only oligarchs but also journalists were put on warning. This was particularly true of journalists in the electronic media, and they soon learned especially not to criticize the Russian war effort in Chechnya. The unsolved murders of several investigative reporters further reinforced caution.

The next assault on the oligarchs was directed against Mikhail Khodorkovsky and Yukos, Russia’s largest private oil conglomerate. Khodorkovsky was also known for making large contributions to opposition political parties. In 2003 he found himself under arrest on charges of tax evasion, and he was later sentenced to nine years in prison. Yukos was assessed back taxes and fees that amounted to some $27 billion. When it was unable to pay, its main production unit, Yuganskneftegaz, was taken over by Rosneft, a state-owned entity. Sibneft, an oil company that had been on the verge of merging with Yukos, instead became a part of Gazprom.

Although presented as a rectification of the unethical privatization schemes of the 1990s, the Yukos affair symbolized for many observers just how random and arbitrary the use of state power had become. Putin’s technocratic advisers, with open disdain, referred to the government’s approach as “tax terrorism.” Unlike many other oligarchs, Khodorkovsky had become the model of good corporate governance in the Russian business world, recruiting experienced foreign executives to introduce Western standards of accounting and management. Even if Putin’s intention was not to renationalize large sectors of the economy, as many outsiders assumed it was, his actions ran the risk of discouraging foreign and domestic investment and of spurring new rounds of capital flight.

The hypothesis that the oligarch cases really represented the criminalization of political opposition activity received reinforcement in 2005 with the Mikhail Kasyanov affair. Kasyanov was not an oligarch but rather a technocrat and former finance minister with a shady reputation. He served as prime minister throughout Putin’s first term but was dismissed in 2004 without any public explanation. The following year, Kasyanov began to issue public criticisms of the administration’s political direction. He openly hinted that he might run for president in 2008. Within weeks, the police opened an investigation into how he had acquired his country house outside Moscow, which according to television reports was worth $30 million.


Russia maintained generally cooperative relations with the outside world after 1991, even with such for- mer adversaries as the United States and the North Atlantic Treaty Organization (NATO). This was true despite the fact that by the early 2000s several for- mer East European allies and the three Baltic republics had joined NATO and the United States had estab- lished air bases in former Soviet republics in Central Asia. Below the surface, however, resentments sim- mered over what some Russians considered unequal treatment and Western gloating over the outcome of the cold war. On occasion, resentment and suspicion rose to the surface, as was the case with what Russians called the “colored revolutions.”

After the collapse of the Soviet Union, Western governments and foundations had given financial support, advice, and encouragement to a variety of independent civic groups in former Soviet republics that advocated the protection of human rights, democratic reform, and similar causes. Western leaders saw the development of “civil society” as a prerequisite for the further development of democracy. Indeed, civil society in Russia had progressed tremendously since Soviet times, when all independent entities were proscribed by law. Outside Russia, such civic groups were central to the organization of massive demonstrations that protested fraudulent elections and eventually toppled authoritarian and semi-authoritarian regimes in Georgia in 2003, Ukraine in 2004, and Kyrgyzstan in 2005. In each case, the successor regime was less favorably inclined toward Russia than its predecessor. In the Ukrainian case, in particular, Putin had taken an open stance in support of the side that was toppled.

Russian officials began to speak of the civic groups as instruments of subversion directed by Western intelligence agencies. Internal security officers described a conspiracy of loosely associated entities engaging in “network warfare.” In response, a law was passed in December 2005 requiring all nongovernmental organizations to register with the state and to submit regular reports on their activities and spending. The state was empowered to review compliance and to shut down any entity that violated the rules, but exactly which activities were prohibited was left vague.

Perhaps more ominous was the sudden rise of a new organization, a pro-Putin youth movement called Nashi (“Ours”). Founded in March 2005, Nashi was capable of mobilizing 60,000 people for a rally in May of that year. Its leaders described the group’s purpose as preventing a coup against the Russian government. The Kremlin denied any links to the organization, but Nashi was permitted to hold its founding congress in a facility of the Russian Academy of Sciences, and its leaders were granted a personal interview with Putin. The rhetoric suggested to some observers that Nashi was being readied to replace an insufficiently reliable United Russia party as the country’s main political organization.


? Boris Yeltsin, in his revolution, unleashed a host of com- peting regional, bureaucratic, political, and economic forces. Then he attempted to rule by playing them off against one another. The informal interplay, backroom power struggles, deals, and personal connections often proved more important than the formal institutions of government, which he had also created in an arbitrary and self-serving manner. Increasingly, however, ill health, depression, and bouts of drinking kept him from engaging the game. The system became increasingly chaotic. Putin then set out to impose order and hierarchy by subordinating institutions and privatesector groups to the presidency.

On the positive side, few people believe anymore that Russia faces the threat of economic, social, or political collapse. The country under Putin is still much freer than it was as part of the Soviet Union. It is more open, and it has more human contact and a freer flow of ideas with the outside world. It is more responsive to the wishes of its citizens. There still are regular elections, and civil society survives, although it faces new threats. Real debate continues in the print media. Although it depends too heavily on favorable international oil prices, the economy continues to show signs of recovery. Putin’s efforts to impose hierarchy could simply fail. There is, in a word, hope.

Nonetheless, there have been undeniable negative trends. The turmoil of the 1990s discredited the words “reform” and “democrat” in the eyes of many honest citizens. Corruption reached intolerable levels. The Soviet Union’s collapse, the loss of superpower status, the subsequent rise of poverty, and the perceived mistreatment at the hands of other powers left a reservoir of resentment and latent hostility that may be looking for an outlet. The brutal war in Chechnya gives little cause for satisfaction with either side, even when the Russians say it is part of the common fight against terrorism. Even the nature of Russia’s more competitive manufactured exports may give some cause for concern.

The stifling of the electronic media, the virtual renationalization of certain large enterprises, the abolishing of gubernatorial elections, and the concentration of power in the hands of the president all give an insight into the fragility of some of the country’s most important achievements. The government, moreover, has shown a disturbing willingness to criminalize political opposition. Even if these actions are supposed to be temporary, or are simply intended to rein in the excesses of a chaotic time and reestablish order, there is still a risk that they could go too far. Putin’s administration was initially associated with economic recovery, but the perceived assault on private property, the partial reinsertion of the state into the economy, and the simultaneous rigidification of the state could easily stifle investment, encourage capital flight, generate bottlenecks, and otherwise induce economic erosion in the longer run.

It is, of course, too soon to draw any serious conclusions about the history of the Russian Federation since 1991. Which trends finally emerge as dominant will have long-lasting consequences for the future of Russia and perhaps the rest of the world as well.

See also Soviet Union, dissolution of the.


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