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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 433,491 346,520 310,000 16
GNI per capita
 US $ 2,610 2,140 1,750 97
Ranking is given out of 208 nations - (data from the World Bank)

Books on Russia


Update No: 377  (26/06/12)

Members of Russia's political elite speak publicly about the potential for revolution in Russia as pressure is kept on the Kremlin to hold fresh Duma and presidential elections. State spending on the volatile North Caucasus is expected to be half the sum that Putin promised before he was president and relations between Moscow and Washington cool further as Obama and Putin fail to see eye to eye on Syria, while a Russian ship allegedly containing armed helicopters bound for Damascus is turned back from Scotland.

Calls for fresh general and presidential elections have continued and on June 12, tens of thousands of Russians held the first big protest against Vladimir Putin since his inauguration as president. The rally, held in Moscow, came four days after a repressive new bill introducing heavy penalties for those taking part in unauthorised rallies was signed into law. The legislation increased fines for individual participants by 150 times to 300,000 rubles (£6,000) and for organisers to 1 million rubles. Putin and Prime Minister Dmitry Medvedev publicly defended the new law, saying it was in line with European standards.

But the authorities didn't rely on the threat of heavy fines to curb the protest. The day before the rally, police searched the apartments of opposition leaders and called many in for interrogation, including former deputy prime minister Boris Nemtsov, anti-corruption blogger Alexei Navalny, liberal activist Ilya Yashin and TV host Ksenia Sobchak, all of whom missed the demonstration as a result. Sobchak, the only daughter of a late mayor of Saint Petersburg who was Putin's mentor, had been spared reprisals until that raid. "I never thought that we would slide back to such repressions," she tweeted on Monday.

Despite fears of unrest following a violent police crackdown at a previous protest on May 6, when more than 400 people were detained, the demonstration went ahead peacefully. Rally organisers put the number of protesters at 50,000, while police said that about 18,000 had showed up.

The June 12 protest had official approval, but any change in the agreed location and order of proceedings could have given police a pretext for a crackdown. There is still a chance that future protests could end in violence and that would only put more pressure on Putin and his government. One protester, 20-year-old statistics student Anatoly Ivanyukov, said attempts by the authorities to disrupt rallies would only fuel further protest. "It's like when you forbid children to do something, it makes them even more willing to do that," he said.

Parliamentary deputies Dmitry Gudkov and Ilya Ponomaryov, who coordinated the opposition to the new law on protests in Russia's Duma, warned in a joint statement that the raids had escalated the situation.

"This could provoke an irreversible growth in social tensions and close the way to a constructive evolution of Russia's political system," they said.

But warning shots to Putin are also being fired by his allies. Sociologist Olga Kryshtanovskaya, who is close to Russia's political elite and who joined the ruling United Russia party in 2009, said on Dozhd TV on the eve of the June 12 protest in Moscow that Russia is headed toward a very serious and potentially destabilising crisis. "In my view, the country is in a revolutionary situation,” Kryshtanovskaya said.

Kryshtanovskaya said the elite is dangerously split between factions vying for power – neither of which is content with the current situation. "This is a dangerous process that began during the Medvedev thaw," she said.

Those who wanted the "Medvedev thaw" to continue, she went on, are unhappy with Putin's return to power. But the victors in that Kremlin power struggle are also dissatisfied with Medvedev's legacy and the tremors that swept through Russia's ruling class during his presidency.

According to Kryshtanovskaya, when Putin turned the Kremlin over to Medvedev in 2008, 45 percent of Russia's senior officials were security service veterans. Medvedev cut that figure in half:

“Putin was very careful. He didn't want there to be a large number of dissatisfied people in the elite. He was careful about who was dismissed and who didn't get what they wanted. Medvedev may have the reputation of being softer and more liberal but, from the perspective of the elite, he was more strict and many more people felt the ground fall out from under their feet. They are not satisfied. The number of dissatisfied people in the elite sometimes reaches critical mass.”

Kryshtanovskaya also sees the fledgling opposition as a source of instability. Some in the movement, she says, are sincerely trying to improve the situation, but some want to use the current discontent to destabilise the country and seize power.

Adding weight to Kryshtanovskaya's assessment, a report released by the Centre for Strategic Research shortly before her TV interview warned that Russia could descend into violence and chaos if the authorities continue to crack down on opposition protesters or if the economy slides. That report was commissioned by former Finance Minister Aleksei Kudrin's newly formed Committee of Civic Initiatives, demonstrating that those at the heart of Russian politics are deeply concerned about the uncertainty of Russia's future.

The political heat has had its effect on Russia's ongoing wars in the north Caucasus. On June 19, Medvedev announced that the details of a program for the socio-economic development of the North Caucasus, which was kick-started by Putin last summer, will be finalised by the end of this year. But what was meant to be a program designed to stabilise the volatile region has turned into a sham. Total funding for the 2012-2025 program will amount to just 1.7 trillion rubles ($52.2 billion), less than half the 3.89 trillion rubles envisaged when the first draft of the program was unveiled in July 2011.

The program was intended to take over the function of three existing development programs for southern Russia, Chechnya, and Ingushetia that were due to end by 2016. It's main aim was to launch infrastructure projects – the construction of schools, hospitals, and housing – and to create new jobs in order to reduce unemployment across the region. Society in the North Caucasus is deeply fractured and corruption is rife. The socio-economic problems there run so deep (for example, unemployment is 48 per cent in some areas of Ingushetia and 34 per cent in some areas of Chechnya) that the reduced amount of cash available is unlikely to make a dent. In addition, the slight against the region may worsen tensions, for example Chechnya was hoping to receive 498 billion rubles over the next 14 years of which 156 billion rubles was earmarked as compensation for people whose homes and property were destroyed during the 1994-96 and 1999-2000 wars. They may not see that cash now and locals could take that as another jibe from “Mother Moscow”.

It's possible that the Kremlin simply doesn't have the cash to meet expectations as first laid out by Putin last year, but the decision to reduce spending on the North Caucasus could also constitute a response to increasingly vocal demands by Russian nationalists to “stop feeding the Caucasus”.

Ongoing fighting in the Caucasus is a highly political issue that will continue to plague Putin and his government, if not enough effort is made to improve living conditions in the region or enter into open dialogue about the conflict. On June 21, Amnesty International released a report called “Circle of Justice”, which warns that the threat to security for many people in the North Caucasus comes as much from law-enforcement agencies as it does from armed groups. The report is the result of an Amnesty investigation into alleged abuses by state agents in the region, including enforced disappearances and executions not ordered by a court of law. It also examines the failure of authorities to properly investigate and prosecute such cases.

John Dalhuisen, director of Amnesty International's Europe and Central Asia program, said: "You have individuals trapped between armed groups that represent a serious threat, that's true, but also a security force that is operating outside of and beyond all control by accountability mechanisms.”

Dalhuisen went on to say that the law-enforcement agencies in the North Caucasus have complex and "opaque" structures, which allows authorities to abuse human rights with impunity.

The report describes how masked security agents in unmarked vehicles raid homes without wearing any insignia to identify their agency. When investigators or prosecutors try to determine responsibility for rights abuses, they are unable even to establish which agency was involved.

"This is clearly a very convenient system for perpetuating impunity because it is very difficult for prosecutor or an investigator to make any further progress in an investigation in a great many cases," Dalhuisen said. "So this is a situation of institutional, organisational chaos that might have evolved unintentionally but is clearly being perpetuated by design. It is a system that allows for, indeed very much encourages, human rights violations by ensuring effective impunity for those who engage in them."

Amnesty concludes there can be "no peace or lasting stability" in the North Caucasus until there is political will in Russia for bringing to justice those officials who violate human rights.

In foreign policy, the Kremlin is standing firm. Relations between the US and Russia have been cool for months over several issues, including continued concerns in Moscow over US missile plans for Europe and differing stances on Syria. On 13 June, Russia and the US entered into a blame game over intervention in Damascus. Russian Foreign Minister Sergei Lavrov rebuffed accusations made by US Secretary of State Hilary Clinton that Moscow was supplying armed helicopters to Bashar al-Assad's regime in Syria. Lavrov made it clear that the supply of what he called "anti-air defence systems" was legitimate. The US in turn denied Russian claims that it was arming anti-Assad rebels.

Evidence is mounting that the Free Syrian Army, the opposition's main armed wing, has started receiving more and better weapons from Saudi Arabia and Qatar that are being delivered via the Turkish border, paid for by Saudi Arabia and Turkey. The US has been reported in the NYT as "co-coordinating" those efforts with teams of CIA agents determining which armed groups will receive weapons, aiming to exclude known terrorist organisations. For Russia's part, it's becoming increasingly likely that it is supplying Bashar al-Assad with armed helicopters.

On June 19, a Russian vessel believed to be carrying repaired attack helicopters to Syria had to turn back towards Russia after a British insurance company refused to give the ship cover. The ship, called “Alaed”, was in waters off the coast of Shetland when the British-based insurer that provided coverage for it, Standard Club, released a statement saying the vessel was "carrying munitions destined for Syria" in breach of the company's rules.

Standard Club said it was suspending insurance coverage of the "Alaed" and that British Foreign Secretary William Hague had told Russia's foreign minister that all defence shipments to Syria must stop.

The day before that debacle, Putin and US president Barack Obama held a frosty meeting about Syria on the sidelines of the G20 summit in Mexico, in which neither leader could look the other in the eye. Obama had hoped to win Putin's support for a potential attempt to change the regime in Syria but he didn't get what he wanted; instead the pair issued a bland joint statement, saying that the Syrian people should independently and democratically be allowed to decide their own future,
whilst both, as we illustrate here, are simultaneously supplying weapons to their favoured side

Putin has strategic reasons for not wanting to get rid of Bashar al-Assad. Russia has important strategic and geopolitical interests in the deep-water port at Tartus in Syria. The Soviet Navy first signed an agreement with Damascus enabling it to use Tartus in 1971. Then, the Soviet Union was Syria's main arms supplier and all Soviet weapons bought by Syria were received at Tartus. The USSR had similar naval bases in Egypt as well, but all equipment and ships were moved to Tartus in the 1970s, turning it into the only operational Soviet Naval base in the Middle East. By 1990, Syria had built up debts of $13.4 billion to Moscow, largely due to weapons purchases, and in May 2005, Russia and Syria signed a deal that wrote off 73 percent of Syria's Soviet-era debt.

That deal enabled Damascus to start making fresh weapons purchases from Russia and Tartus is where newly bought arms are delivered to, as well as where weapons that must be returned to Russia for repair, such as attack helicopters, are dispatched from. Aside from the financial importance of the port, Russia's agreement with Syria over Tartus allows the Russian Navy to expand its presence in the region. As Russia's only Mediterranean base, Tartus is a vital strategic asset that strengthens Russia's perception of itself as a great power and increases its influence in regional diplomacy.

Because Russia has consistently vetoed UN Security Council resolutions against Assad's crackdown on dissent and is probably selling weapons to Assad's regime, it's likely that if an opposition government came to power it would try to revoke Russia's rights to use Tartus, stripping Moscow of its military influence in the region.

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