Moscow's support of the U.S. antiterrorist campaign following the September 11 attacks on the World Trade Center and the Pentagon was heralded by many as the start of a new era in U.S.-Russia relations. The unprecedented level of cooperation led to speculation about what concessions, such as abandoning plans for further NATO expansion or lessening its criticism of the war in Chechnya, the West might be expected to make in return for Russian assistance. However, a chill in relations between Moscow and Washington developed late in the year when the United States announced its intention to withdraw from the Anti-Ballistic Missile (ABM) Treaty, and the Kremlin's hopes for a greater voice in NATO went unrealized. On the domestic front, various long-awaited and often controversial legal and economic reforms were adopted, including laws governing labor, taxation, land ownership, pensions, and the judicial system. Meanwhile, efforts to consolidate central government authority over independent media outlets and the country's far-flung regions continued throughout the year, as did the seemingly intractable war in Chechnya.

With the collapse of the Soviet Union in December 1991, the Russian Federation reemerged as a separate, independent state under the leadership of Boris Yeltsin, who had been elected president in June of that year. Yeltsin was challenged by a hostile anti-reform legislature in 1992, as parliament replaced acting Prime Minister Yegor Gaidar, a principal architect of reforms, with Viktor Chernomyrdin, a Soviet-era manager of the natural gas monopoly, Gazprom. The following year, Yeltsin put down an attempted coup by hardliners in parliament, and a new constitution was approved creating a bicameral national legislature, the Federal Assembly. The December 1995 parliamentary elections, in which 43 parties competed, saw the victory of Communists and nationalist forces.

In the 1996 presidential elections, Yeltsin, who was openly supported by the country's most influential media and business elites, easily defeated Communist Party leader Gennady Zyuganov. The signing of a peace agreement in August with authorities in the republic of Chechnya put an end to a nearly two-year war with the breakaway territory, in which Russia suffered a humiliating defeat and Chechnya's formal economy and infrastructure were largely destroyed. However, a final decision on the region's status was officially deferred until 2001.

In March 1998, Yeltsin dismissed Prime Minister Chernomyrdin and his entire government, citing the failure of economic reforms, and replaced him with the littleknown Energy Minister Sergei Kiriyenko. As the country's economic situation continued to worsen, the ruble collapsed in August, forcing a devaluation of the currency and precipitating the collapse of Russia's financial markets. In response, Yeltsin fired Kiriyenko, who was replaced by Foreign Minister Yevgeny Primakov in September. The new government, which did not include any well-known reformers, signaled a return to greater spending and state control.

An impending political crisis was averted in mid-1999, when Yeltsin survived an impeachment vote in parliament on May 15 over five charges, including starting the 1994-1996 war in Chechnya. Four days later, the legislature approved a long-time Yeltsin ally, Interior Minister Sergei Stepashin, as the new prime minister to replace Primakov, who had been dismissed by Yeltsin on May 12. However, Yeltsin abruptly removed Stepashin on August 9 and replaced him with Federal Security Service head Vladimir Putin. Yeltsin, whose term would expire in 2000 and who was ineligible to run for a third term, indicated that Putin was his preferred successor in the presidential elections scheduled for the following year.

The previous conflict with Chechnya was reignited in 1999 after an invasion by Chechen rebels into the neighboring republic of Dagestan in early August, and a subsequent string of deadly apartment house bombings in several Russian cities, including Moscow, that the Kremlin blamed on Chechen militants. The Russian government responded by initiating an invasion of the breakaway republic that drove tens of thousands of civilians from their homes and led to accusations of human rights violations committed by both the Russian military and Chechen fighters. However, both the campaign and Putin enjoyed broad popular support in Russia that was fueled by the media's largely pro-government reporting.

In the December 19 election for the 450-seat lower house of parliament (Duma), the Communist Party captured 114 seats, and the Unity bloc, a diverse grouping of political figures created by the Kremlin in September and endorsed by Putin, gained 73 seats. The seemingly powerful Fatherland-All Russia coalition, that united Moscow Mayor Yuri Luzhkov's Fatherland group and former Prime Minister Primakov's All Russia bloc of regional governors, suffered a surprisingly poor showing with only 66 seats. The remaining seats were won by independent candidates or members of smaller parties. While the Communists formed the single largest bloc, the results were widely regarded as a victory for pro-government forces. The Unity bloc had appealed to voters on the basis of its image as a champion of the restoration of order and tough leadership, while Primakov saw his support decline in the face of relentless media attacks by the pro-Kremlin ORT television network.

In a surprise end of the year move, President Yeltsin announced his resignation on December 31, turning over the reins of power to Putin. Many observers maintained that his sudden departure was linked to the signing of a guarantee of immunity from prosecution for Yeltsin, who recently had been at the center of several corruption scandals, as well as to his worsening health problems. His resignation served to move up the presidential poll by three months, from June to March 2000. With Putin's victory becoming an increasingly foregone conclusion during the brief campaign period, most political figures, including opponents of the Kremlin administration, began to pledge their support to his candidacy.

In a widely anticipated victory, Putin secured 53 percent of the vote over his closest rival, Communist Party leader Gennady Zyuganov, who received 29 percent. International election observers cited serious irregularities, including the use of government staff to campaign for Putin, while a highly critical report compiled by The Moscow Times following a six-month investigation found that Putin would have faced a second-round runoff with Zyuganov if not for widespread fraud; the report did concede that Putin would most likely have won in the second round. Among the reasons cited for Putin's victory were the shortened campaign period, which benefited the already popular Putin over his opponents; Putin's refusal to provide potentially controversial details of his political program; the earlier elimination from the race of former leading presidential hopefuls Primakov and Luzhkov; and positive portrayals of Putin by large media outlets controlled by the state and Kremlin supporters. Two months after the election, parliament overwhelmingly approved Finance Minister Mikhail Kasyanov, who had served as Russia's chief foreign debt negotiator, as the new prime minister.

Shortly after taking office in March, Putin began challenging the long-standing political clout of the so-called oligarchs, members of the wealthy and powerful business elite--including media magnates Vladimir Gusinsky and Boris Berezovsky--through a series of investigations and raids by tax officials. While Putin argued that his actions were part of a new anticorruption campaign, his efforts were widely interpreted as an attempt to increase his own political power by limiting the influence of major business leaders over state policy. In a bid to increase the central government's authority over the country's far-flung regions, Putin moved to rein in the often independent-minded 89 governors by pushing through legislation removing them from their positions in the upper house of parliament, allowing the president to suspend them for breaking federal laws, and adopting tax reforms that could reduce their economic power. He also created seven new "super regions" headed by Kremlin appointees, most of who had backgrounds in the military or security services.

Throughout 2001, Putin pushed through a series of wide-ranging economic and legal reforms with the stated aims of reducing corruption, increasing transparency and efficiency, and boosting foreign investment. Among the various changes were the passage of an updated labor code to replace Soviet-era legislation; the adoption of a judicial reform package; the establishment of a flat 13 percent individual income tax rate to help deter tax evasion; approval of a gradual restructuring of the banking sector to attract foreign capital; the revamping of the nationwide pension system; passage of a landmark land code allowing the private ownership of nonagricultural land by both Russian citizens and foreign nationals; and adoption of a law to crack down on money laundering. Some critics maintained that the reforms were not extensive enough, as in the case of the land code, which affects as little as two percent of the country's total land, or that reform would face serious obstacles to implementation by the country's entrenched bureaucracy.

Putin continued his previous year's efforts to increase central government control over political rivals, regional leaders, and the country's media. Although a fair amount of power has been returned from the regions to the center since 2000, including the bringing of some regional laws into conformity with federal legislation, many local leaders have actively resisted the dilution of their authority. In apparent compensation to the regional elite, Putin endorsed a bill, passed by the Duma in January, that allows sitting governors to seek more than two terms in office. After a Communist-backed noconfidence vote in his government in March failed by a wide margin, Putin orchestrated his first major cabinet reshuffle later that month by placing Kremlin loyalists, including a number of former KGB colleagues, in key defense and interior ministry positions. On December 1, the pro-Kremlin Unity party officially merged with its former rival, Fatherland-All Russia, to form a new party with Putin at the center. During the first half of the year, the state-run natural gas giant, Gazprom, continued its acquisition of the independent Media-MOST empire outlets, including the NTV television station.

At the start of the year, relations between Russia and the United States remained strained over various issues, including a series of expulsions of diplomats from Moscow and Washington in March for suspected espionage, disagreements over NATO expansion, and Russia's objection to U.S. plans to deploy a national missile defense system. However, the September 11 terrorist attacks appeared to mark a significant improvement in U.S.-Russia relations, at least for the short-term. In a televised speech two weeks after the attacks, President Putin announced that Moscow would support U.S. military actions in Afghanistan by opening its airspace for humanitarian aid missions, supplying the anti-Taliban Northern Alliance fighters with weapons and equipment, and sharing intelligence information with Washington. By early October, U.S. troops were reported to have been deployed in the former Soviet republics of Tajikistan and Uzbekistan, countries that Moscow continues to regard as within its sphere of influence. President Putin pledged to close Russia's Cold War-era intelligence listening post in Cuba and a naval base in Vietnam. At the same time, the Kremlin continued to face opposition to these policies from some members of the political and military establishment and the general population, who remained wary of closer ties with the West.

Russia's cooperation with the U.S.-led antiterrorism campaign led to considerable speculation about what concessions Moscow might expect in return. Already by mid- November, the United States appeared to have reduced its criticism of the war in Chechnya, moved to accelerate Russia's entry into the WTO; pledged, along with Russia, to make deep cuts in nuclear weapons over the next decade; and endorsed a greater voice for Russia in NATO affairs.

However, the initial euphoria of warmer relations with the United States appeared to have cooled somewhat by the end of the year. In mid-December, President George Bush announced Washington's intention to withdraw from the ABM Treaty in order to build a national missile defense system to defend against possible attacks from so-called rogue states, such as Iraq and North Korea. While President Putin offered muted criticism of the decision, some other politicians and military leaders voiced strong objections to what they regarded as a public humiliation after Russia's support in the U.S. war against terrorism. Despite agreements in December to deepen cooperation between Russia and NATO, Moscow's expectations for a larger role in the organization's decision making were largely unfulfilled.

Nearly 14 months after the nuclear submarine Kursk exploded and sank to the bottom of the Barents Sea, killing all 118 crewmen on board, Dutch salvage teams raised the vessel and hauled it to shore in mid-October. Fears of underwater radiation leaks and interest in determining the exact cause of the disaster prompted the delicate and unprecedented operation.

In the breakaway republic of Chechnya, Russian and Chechen representatives held face-to-face talks for the first time since the current conflict began more than two years. However, a peaceful settlement remained elusive, as rebel forces continued to engage in guerilla war tactics such as sniper attacks, car bombs, and suicide missions against Russian troops and pro-Moscow Chechens throughout the year. Human rights groups reported cases of torture, extrajudicial executions, and forced disappearance of civilians by Russian troops, which were often committed during so-called mopping-up operations to find separatist fighters.