"Russia Defence & Security Report Q3 2010" is now available at Fast Market Research

May 28, 2010 - PRLog -- Russia's economy is slowly emerging from the global recession. Its GDP expected to grow 3.4% in 2010, following last year's 8.1% decline. Russia is heavily dependent on revenues from oil and gas exports. The sharp drop in oil prices in 2009 hit hard: unemployment increased alarmingly and the rouble was devalued. A return to oil prices above US$60.00/bbl, as well as the recapitalisation of domestic banks, will strengthen the economic upturn. However, unemployment is expected to increase to 11.0% this year, in part at least from seasonal effects. It was 8.5% 2009.

Corruption remains a major problem in Russia, with bribery seen as endemic throughout government agencies. It has become worse over the past few years, and most Russians see it as one of the most pressing issues facing the country. However, President Dmitry Medvedev has declared that he would make fighting corruption a 'national priority project.' However, changes will not happen overnight and any positive changes will likely take place over the longer term.

On February 5 2010, The Military Doctrine of the Russian Federation was published on the president's website, replacing the earlier version released in 2000. The State Programme of Armaments (GPV-2015) remains in force, representing the modernisation plan for the defence forces through to 2015. It includes purchasing, upgrades and maintenance worth RUB5,000bn.

On April 13, the Nuclear Security Summit - a meeting of 47 countries - was hosted by US President Obama in Washington DC. The summit meeting released a communique resolving to strengthen nuclear security and to address the threat of nuclear terrorism. (Source: US President's website, www.whitehouse.gov, April 2010). Also signed at the same time was an agreement between Russia and the US to dispose of tonnes of plutonium from nuclear weapons, beginning in 2018. (Source: AP News) In April, foreshadowing a new era of NATO-Russian cooperation, Anders Fogh Rasmussen, Secretary- General of NATO, has called for Russia join NATO's missile defence shield. This unprecedented plan is expected to be discussed at the next meeting of the alliance in Tallinn, Estonia in April. (Source: Telegraph Media Group, www.telegraph.co.uk, April 19 2010)

On April 10, a plane carrying Poland's President Lech Kaczynski and a host of senior government officials crashed in Smolensk, Western Russia, killing all 96 on board. Those killed included Poland's top political and military brass, who were visiting Russia to commemorate the 70th anniversary of the massacre of thousands of Polish officers at Katyn by Soviet soldiers in 1940. The swift, positive response from Moscow to the tragedy, with Prime Minister Vladimir Putin announcing that he would personally lead the post-crash investigation, which has been seen to comfort Prime Minister Tusk, could limit any negative fallout from Poland's anguish. It could even improve Russo-Polish relations.

In Kyrgyzstan, the political uprising escalated from April 7, leading to the violent overthrow of the government there. On April 15, President Kurmanbek Bakiyev formally resigned from office, with Roza Otunbayeva becoming the leader of the new interim government. Russian President Dmitry Medvedev, expressed hopes for future positive Russian-Kyrgyzstani relations, which had deteriorated in the weeks leading up to the crisis.

On March 29, there were two suicide attacks on the Moscow Metro - killing at least 37 people - in yet another reminder to the Kremlin that the war in the North Caucasus is not over. Chechen separatist militants claimed responsibility for the attacks, which are more broadly connected to the ongoing Islamist insurgency in the North Caucasus. Despite a combination of heavy federal subsidies and repression, the insurgency there looks set to continue. On January 19, President Dmitry Medvedev announced the creation of a new North Caucasus Federal District in order to better administer the region. The Kremlin realises that it has to address the economic deprivation of the North Caucasus if it is to end the insurgency. However, Russian security forces have also continued with their crackdown.

Russia has tended not to source its defence procurements from overseas; but this is changing, especially with increasing multinational involvement. In February, France announced that it plans to sell at least one, and possibly four, Mistral-class amphibious assault ships to Russia. The ships cost up to US$750mn each. Some of NATO and members of the US Congress have expressed concern at the proposed sale. (Source: New York Times, February 8, 2010)

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