This report begins with a brief discussion of the Russian oil and gas industries, including their efforts to purchase energy infrastructure in central and eastern Europe and reduce energy subsidies to neighboring countries. A second section deals with the impact of recent Russian energy policy on neighboring countries, all of them formerly part of the Soviet Union, de facto or de jure, and all heavily dependent on Russian energy imports.

This report addresses Russian economic policies and performance raise important policy questions for the United States and the U.S.-Russian relationship.

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Vladimir Putin won reelection as Russian President in March 2004, in an exercise in “managed democracy” in which he took 71% of the vote and faced no serious competition. The pro-Putin Unified Russia party similarly swept the parliamentary election in December 2003 and controls more than two-thirds of the seats in the Duma. Also in March, Putin replaced long-serving Premier Kasyanov with a little-known bureaucrat, Mikhail Fradkov, indicating Putin’s intent to take the reins of government even more completely into his own hands. Putin’s twin priorities remain to revive the economy and strengthen the state. He has brought TV and radio under tight state control and virtually eliminated effective political opposition. Federal forces have suppressed large-scale military resistance in Chechnya but face the prospect of prolonged guerilla warfare and terrorist-style attacks.

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This report discusses the key role Congress played in formulating an aid program for the former Soviet Union in 1992.

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