The problem of ethnic separatism is undoubtedly of primary significance among the ethnic problems that directly influence Russia's political stability. The main reason for this is the interrelation between federal authorities and the non-Russian-majority republics. If there is a probability of the dissolution of Russia, it is related to these republics.

Accepted public opinion would have us believe that under President Yeltsin, anarchy grew between Moscow and the republics of the Russian Federation, while President Putin has brought order and stability to the situation. An examination of Putin's relations with the republics shows that this is not true. Yeltsin became president of Russia at a very critical period in its history. Russia was feeling the consequences of, and the inertia resulting from, the disintegration of the USSR. He managed, however, to stabilize the situation by making concessions to the republics in exchange for their cessation of separatist agendas. This stability has begun to unravel since Putin began to exert pressure on the leaders of the republics. In response to this pressure, they have revived their nationalist and separatist tendencies. The leaders of the republics do not exhibit their negative sentiments toward Putin's policies openly. Instead, they secretly allow nationalistic movements in their republics to develop.

The creation of the seven federal regions has already created new tensions in the governmental structures of the country. Federal ministers are suspicious of attempts by the President's regional representatives to control the flow of finances from the center to the regions and refuse to cooperate with Moscow's efforts to coordinate the activities of the regional offices of their ministries.

This kind of competition during Nikita Khrushchev's leadership in the USSR led to the collapse of his favorite brainchild, the sovnarkhoz--the prototype of the present-day administrative region. The sovnarkhozy were comprised of 3-4 oblasts, republics, or krays and were often very large territories that were poorly governed. The present-day administrative regions are even bigger (comprising 12-13 regions) and more poorly governed due to the disappearance of the Soviet command hierarchy that had previously provided discipline through the Communist party.

This alone condemns Putin's administrative system to failure. The power of regional leaders should be limited. However, this should be done from below, through the development of municipal self-government, rather than from above, at the risk of concentrating even more power in the Kremlin. Putin's reforms aim to compensate regional leaders for a loss of power on the federal level by giving them more control over the municipalities. This could lead to a further weakening of the already insignificant role that municipal authorities play.

The situation of local self-government is worsening as a result of the changes Putin has made in the proportion of revenue going to federal and regional budgets. Before the changes, the proportions were almost equal: 51 percent went to the center and 49 percent to the region. That 49 percent included 32 percent that went to the municipalities. Today the federal share has increased to 63 percent and the regions' has dropped to 37 percent. But it was the municipalities that got hit the hardest, with their share cut in half, to only 17 percent. At the same time, the municipalities' expenses did not decrease--they retain responsibility for almost three-quarters of the entire housing and municipal infrastructure. As a result, local budget deficits are growing, and many cities have no money to pay for electricity, gas, and coal. It is mainly because of these financial difficulties that many Russian cities and villages (especially in the Urals, Siberia, and the Far East) spent months without electrical lighting and heat this past winter. Municipalities do not have sufficient means to make needed repairs to heating and ventilation systems, and as a result the number of accidents is growing.

Concentration of resources in the federal budget destroys commercial spirit and stifles initiative on the part of regional leaders. The Russian government is fooling itself into believing that regions thus controlled will be easier to rule as they become more pliant. In reality, the opposite is true--less money for regional and municipal budgets means less responsibility on the part of their leaders, and so less can be demanded of them. It should be expected in the near future that the residents of the provinces will increasingly direct their displeasure toward the Kremlin. For the non-Russian peoples, that means a growth of anti-Russian sentiment because federal rule is seen as Russian rule.

Such feelings were seen in the results of an opinion poll taken in January 2001. Only 5 percent of respondents thought that relations between different nationalities in Russia had improved since Putin's reforms, while 37 percent thought that they had worsened.

The war in Chechnya has contributed significantly to the perception that center-region relations have worsened. Since the beginning of the war, solidarity with Chechnya has grown among non-Russian populations. Practically all Caucasians, including those who traditionally do not like the Chechens, are experiencing some of the same pressures as the Chechens: for the majority of the Russian people, all Caucasians have one face--they are all "dark" and "terrorists."

Even in a strictly military sense, there is little probability of a victory for Moscow in Chechnya, and there is even less probability of an economic victory there. The history of colonial wars in the 20th century shows that when a war drags on for a long time the intervening party will not win for the following reasons:
- The army cannot be located for long--more than 5-7 years--in a hostile occupied territory before it will begin to become demoralized.
- As the war drags on, a larger part of the home country population becomes dissatisfied with it.
- The economic burdens of the war increase.
- Perhaps most importantly, the rebels stop being afraid of an army that for a long time has failed to achieve victory--in this case encouraging not only the Chechens but other nationalities. The loss of the army's ability to induce fear could be a factor in accelerating the breakup of Russia.

The changing ethnic composition of the population is the biggest challenge facing Russia. In almost all of the republics of the North Caucasus, Russians are already in the minority. In the Far East and in Siberia, Russians are in the minority only in Tuva, but they will soon become the minority in Buryatiya and Yakutiya. According to some projections, within 10-15 years, there will be about 10 million Chinese living in Siberia and Russia's Far East. This would make them the predominant nationality in this--the largest--area of the federation. But the main danger lies in the Povolzh regions, where Russians already are in the minority in Chuvashiya and soon will be in the minority in Tatarstan and Bashkortostan. The Tartars and Bashkirs increasingly speak of uniting to create one federation. If they were to form such a federation--in the very middle of the country--Russia could split into two poorly connected pieces.

The threat of the disintegration of the country could lead the Russian government to adopt one of two fundamentally different political doctrines. The first is consolidation based on a multicultural society. Unfortunately, I can say that the idea of a multicultural society is absolutely foreign to the present Russian authorities. For this reason, the government probably will use the second doctrine--consolidation based on the growth of Russian nationalism. The last gubernatorial elections left no doubt that the Kremlin is exploiting Russian nostalgia for the Soviet Union and nationalist sentiments in hopes of receiving support in the regions from former Soviet officials and generals.

Current trends in the development of Russia's economy--in particular, the protection of national industry, overdependence on oil and gas, and the arms trade--will also lead to the strengthening of nationalism and imperialist sentiments. These trends, especially in the arms trade and arms production, increase the role of social groups that are the main carriers of the Soviet imperialist mentality and foster a confrontational attitude toward the West. These sources of economic development are unstable, and Moscow may be tempted to explain away a worsening of the economic situation as interference by external enemies, thereby inflaming Russian nationalism to support the consolidation of society.
- This is the current situation in Russia: xenophobia, suspicion toward the West, and imperialist sentiments are growing. Therefore, for nationalist consolidation there needs to be an image of an external enemy--"worldwide Islamic terrorism" or "world imperialism."
- If nationalism and imperialist militarism become firmly established in Russia, it could be catastrophic for the country. Moreover, past examples of doomed regimes suggest that such a Russia could present a serious threat to the surrounding states.

US National Intelligence Council