Russian Federation

For the first time ever, Russian workers are threatening to strike in a dispute union leaders directly blame on the tactics of the oligarch who controls the shareholding of Norilsk Nickel. For the first time also, the unions are demanding that corporate transparency include disclosure of the oligarch's perquisites, including the salaries paid to senior management, stock options, bonuses tacked to movements in share prices, and other forms of compensation.

Wealth, the French novelist Gustave Flaubert once quipped, is a substitute for everything, even reputation. But even Vladimir Potanin and Mikhail Prokhorov, the dominant shareholders of Norilsk Nickel, have begun to appreciate that for the share value and creditworthiness of Norilsk Nickel to appreciate, their personal reputation will not suffice; nor the briefings that they provide selected international bankers and analysts. The attack by their workforce also comes as Prokhorov's senior executives cannot agree with board members on a planning document the company promised to release six months ago, and whose release has been postponed several times already. Called the Plan to 2015, the company strategy is dismissed by union leaders as just a collection of declarations, which is not concrete.

The main problem Russia faced in trying to pursue good economic policies at the time of the collapse of the Soviet system was to develop the human and administrative capacity to be able to formulate and implement economic decisions.

It sounds almost trivial to say that; however, if we at the IMF and others in the international community had understood and realized how significant a problem that would be, I think we would have designed our policy and our technical assistance in a rather different way. I say that because one of the prejudices that many observers of the West, even well-informed observers, believed that if there was one attribute you could say with confidence about the Soviet Union, it was the prevalence of centralized economy. It was, after all, an autocratic society, some would say a totalitarian state. And therefore centralized authority was its key feature. It was a belief by all observers outside of Russia that this dominant central authority survived the collapse of the Soviet system, because it was such a well-developed feature of the system, it had been in place for so many years, and even in post-Soviet Russia in 1992-93, you still had the attributes of central authority—a President, the Ministries, etc.

The former Soviet Union was to deal with a number of unique obstacles during the post-Soviet transition. These obstacles may have left Russia on a far worse footing than other former Communist-led states to Russia's west that were also going through dual economic and political transitions, such as Poland, Hungary, and the Czech Republic, which have fared better since the collapse of the Eastern bloc between 1989 and 1991.

The first major problem facing Russia was the legacy of the Soviet Union's enormous commitment to the Cold War. In the late 1980s, the Soviet Union devoted a quarter of its gross economic output to the defense sector (at the time most Western analysts believed that this figure was 15 percent). At the time, the military-industrial complex employed at least one of every five adults in the Soviet Union. In some regions of Russia, at least half of the workforce was employed in defense plants. (The comparable U.S. figures were roughly one-sixteenth of gross national product and about one of every sixteen in the workforce.) The end of the Cold War and the cutback in military spending hit such plants very hard, and it was often impossible for them to quickly retool equipment, retrain workers, and find new markets to adjust to the new post-Cold War and post-Soviet era. In the process of conversion an enormous body of experience, qualified specialists and know-how has been lost, as the plants were sometimes switching from, for example, producing hi-tech military equipment to making kitchen utensils.

On 22 June 1941, Nazi Germany invaded the Soviet Union with the largest and most powerful invasion force in human history, opening the largest theater of the Second World War. Although the German army had considerable success early on, they suffered defeats after reaching the outskirts of Moscow and were dealt their first major defeat at the Battle of Stalingrad in the winter of 1942–1943. Soviet forces drove through Eastern Europe in 1944–45 and captured Berlin in May, 1945. In the conflict, Soviet military and civilian death toll were 10.6 million and 15.9 million respectively, accounting for half of all World War II casualties.
The Soviet economy and infrastructure suffered massive devastation but the Soviet Union emerged as an acknowledged superpower. The Red Army occupied Eastern Europe after the war, including the eastern half of Germany; Stalin installed communist governments in these satellite states. Becoming the world's second nuclear weapons power, the USSR established the Warsaw Pact alliance and entered into a struggle for global dominance with the United States, which became known as the Cold War.

Following the October Revolution, a civil war broke out between the new regime and the Socialist Revolutionaries, Mensheviks, and the White movement. The Treaty of Brest-Litovsk concluded hostilities with the Central Powers in World War I. Russia lost its Ukrainian, Polish and Baltic territories, and Finland by signing the treaty. The Allied powers launched a military intervention in support of anti-Communist forces and both the Bolsheviks and White movement carried out campaigns of deportations and executions against each other, known respectively as the Red Terror and White Terror.
The famine of 1921 claimed 5 million victims. By the end of the Russian Civil War, some 20 million had died and the Russian economy and infrastructure were completely devastated. Following victory in the Civil War, the Russian SFSR together with three other Soviet republics formed the Soviet Union on 30 December 1922.
The Russian Soviet Federative Socialist Republic dominated the Soviet Union for its entire 69-year history; the USSR was often referred to as "Russia" and its people as "Russians." The largest of the republics, Russia contributed over half the population of the Soviet Union. After Lenin's death in 1924, Joseph Stalin consolidated power and became dictator. Stalin launched a command economy, rapid industrialization of the largely rural country and collectivization of its agriculture and the Soviet Union was transformed from an agrarian economy to a major industrial powerhouse in a short span of time. This transformation came with a heavy price, however; millions of citizens died as a consequence of his harsh policies.

In prehistoric times, the vast steppes of Southern Russia were home to disunited tribes of nomadic pastoralists. In classical antiquity, the Pontic Steppe was known as Scythia.Remnants of these steppe civilizations were discovered in the course of the 20th century in such places as Ipatovo, Sintashta, Arkaim, and Pazyryk. In the latter part of the eighth century BC, Greek traders brought classical civilization to the trade emporiums in Tanais and Phanagoria. Between the third and sixth centuries BC, the Bosporan Kingdom, a Hellenistic polity which succeeded the Greek colonies, was overwhelmed by successive waves of nomadic invasions, led by warlike tribes, such as the Huns and Turkic Avars. A Turkic people, the Khazars, ruled the lower Volga basin steppes between the Caspian and Black Seas until the 8th century.

The ancestors of modern Russians are the Slavic tribes, whose original home is thought by some scholars to have been the wooded areas of the Pinsk Marshes. Moving into the lands vacated by the migrating Germanic tribes, the Early East Slavs gradually settled Western Russia in two waves: one moving from Kiev toward present-day Suzdal and Murom and another from Polotsk toward Novgorod and Rostov. From the 7th century onwards, the East Slavs constituted the bulk of the population in Western Russia and slowly but peacefully assimilated the native Finno-Ugric tribes, including the Merya, the Muromians, and the Meshchera.

The climate of the Russian Federation formed under the influence of several determining factors. The enormous size of the country and the remoteness of many areas from the sea result in the dominance of the humid continental and subarctic climate, which is prevalent in European and Asian Russia except for the tundra and the extreme southeast. Mountains in the south obstructing the flow of warm air masses from the Indian Ocean and the plain of the west and north makes the country open to Arctic and Atlantic influences.

Throughout much of the territory there are only two distinct seasons — winter and summer; spring and autumn are usually brief periods of change between extremely low temperatures and extremely high. The coldest month is January (on the shores of the sea—February), the warmest usually is July. Great ranges of temperature are typical. In winter, temperatures get colder both from south to north and from west to east. Summers can be quite hot and humid, even in Siberia. A small part of Black Sea coast around Sochi has a subtropical climate. The continental interiors are the driest areas.