Diplomatic Bluebook 2001
Chapter III. REGIONAL DEVELOPMENTS

5. RUSSIAN FEDERATION AND THE NEW INDEPENDENT STATES

1. Assumption of Office by President Vladimir Putin

In Russia, President Boris Yeltsin resigned at the end of 1999, and the presidential election was held on March 26. The winner of this election was the shoo-in from the outset of the election race, Prime Minister Vladimir Putin (acting President since December 31, 1999), who passed the 50-percent barrier in the first round of voting by capturing around 53 percent of the vote and pulling ahead of Communist Party leader G. Zyuganov, who came in second with 29 percent. Putin was officially inaugurated as President on May 7, and immediately formed the Kasjyanov Cabinet.

Soon after the inauguration, enjoying high rates in polls*9 and the State Duma's reconciliatory attitude toward the administration, President Putin began to launch a series of actions toward his political goal, the construction of a "strong state." He demonstrated strong leadership as the new leader of the "post-Yeltsin" period.

In terms of domestic politics, President Putin strengthened the control of the federal central government over regional governments, which had become influential political players in Russia during the Yeltsin period. In May, he established the mechanism of seven federal districts, each of which has a presidential envoy supervising local governors. He took the initiative to establish laws stipulating the separation of governors from the Upper Chamber (the Federation Council) and the introduction of a system for the dismissal of governors, and these laws came into existence by early August. Regional governments were strongly requested to redress local laws which contradicted federal laws. His uncompromising stance was witnessed in Chechnya too. In December, people's attention was drawn to his success in the adoption of laws on state symbols, including the revival of the tune of the former Soviet anthem.

In the economic area, the recovery of Russia's domestic industry and investment as a result of the continued high price of oil in the world market and the 1998 ruble devaluation allowed President Putin to launch total structural reform of the Russian economy. Of particular note were the socioeconomic program created in July and the tax reforms instituted in August, which include adoption of a single income tax rate, and in December the first balanced budget (FY 2001) in the new Russia's history was adopted. Further, President Putin explored a more disciplined relationship with Russian financial circles, drawing a line between himself and those leading entrepreneurs who expanded their influence under the Yeltsin administration.*10

Turning to foreign policy, President Putin started to visit many countries immediately after his inauguration, and markedly activated head-of-state diplomacy compared with the Yeltsin period. The President engaged in a vigorous exchange with the United States over National Missile Defense (NMD), which Russia opposes, and also actively pursued dialogue with other G8 leaders in bilateral and multilateral fora. As for relations with the Asia-Pacific countries, the President visited China and North Korea in July, Japan in September, and India in October, as well as attending the Asia-Pacific Economic Cooperation (APEC) Leaders' Meeting in November. President Putin also engaged in active diplomacy with the Commonwealth of Independent States (CIS), including promotion of the union-state creation process with Belarus.

It can be said that the Putin administration has handled various challenges stably enough, without encountering strong political enemies and hard-line opposition since his inauguration. In the days ahead, when the true value of Putin's policies will be tested more concretely, the focus of attention is whether the President can maintain the political stability of Russia and how much progress he will make with the structural reform of the economy against the emergence of destabilizing factors on the economic front, such as falling oil prices in the world market and the waning of the ruble devaluation's effect.

2. Chechnya

Conflict flared up once more in Chechnya in August 1999, but a sustained attack by federal forces had generally subdued the Chechen plain area, the capital Groznyi included, by around February 2000. Seeking to restore and strengthen central government control in Chechnya, President Putin established a provisional Chechen administration in June, placing the republic under the direct rule of the Russian President. Former Muslim leader Mufti Akhmed Kadyrov was appointed as head of the new provisional government.

However, Chechnya armed forces have maintained some of their strength, particularly in the mountainous areas of the south, and have continued to resist federal forces clean-up attempts through destruction and other means. The situation therefore remains critical. (According to a Russian government announcement, Chechnya armed forces have lost around 13,500 men since August 1999, compared to Russian casualties of around 2,600.) In addition to military operations, bolstering the administration and addressing Chechnya's economic recovery will also be critical tasks.

3. Sinking of the Nuclear Submarine Kursk

On August 12, the nuclear submarine Kursk sank off the Kola Peninsula in the Barents Sea during a navy exercise. Despite rescue attempts conducted with the cooperation of the UK and Norway, all 118 crew members eventually died. (The cause of the sinking is currently under investigation. According to Russian announcements, no abnormal radiation has been recorded. Some bodies have been recovered, but reports indicate that recovery of the ship and the remaining bodies will take place in summer 2001.)

On vacation at the time of the accident, President Putin attracted strong public criticism for a while for his failure to rush immediately to the site, as well as other reasons. It was the first rough patch experienced by the Putin administration since its inauguration.

4. The New Independent States

In Ukraine, where persistence with economic reform is currently a key issue, President Leonid Kuchma conducted a national referendum in April regarding reform of the parliamentary system, receiving the support of a majority of the population. His aim through these reforms is to establish a mechanism for smooth policy coordination between the administration and the parliament. Belarus has been criticized by the U.S. and Europe for non-democratic running of the state, and the October parliamentary elections were also regarded as failing to meet international standards for democratic elections.

In Central Asia, Kazakhstan experienced stronger economic growth than was originally expected, but Kyrgyz Republic faces problems such as burgeoning foreign debt and increasing poverty. Kyrgyz Republic held parliamentary elections in February, and presidential elections in October, both of which were harshly criticized as undemocratic by the U.S. and Europe. The economy in Uzbekistan, which has shown stable growth as a result of "stepwise" economic reforms, stalled this year. In Tajikistan, parliamentary elections in which previous anti-government forces also participated were held without major incident in February and March, completing the agreed peace process. The government of Japan has continued to assist Tajikistan in achieving peace, and further aid from Japan and other members of the international community is expected for peace-building in this country. Islamic extremists infiltrated Uzbekistan and the Kyrgyz Republic from August through October, but were suppressed without major confusion.

In the Caucasus region, efforts continued toward resolving ethnic conflicts in Nagorno-Karabakh, Abkhazia, and South Ossetia, but without marked progress. Presidential elections were held in April in Georgia, resulting in the reelection of incumbent President Eduard Shevardnadze with overwhelming support, but the situation remains serious due to the country's inherent lack of resources and domestic ethnic conflicts.

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(*Note)

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