Thank you, Mr. Chairman, for holding this very important hearing today. 

I also want to thank the members of our panel today for their participation.

Today, it is common to hear talk of “failed states” and how best to deal with them as potential threats to international stability and to U.S. security interests.

We don’t often hear that phrase mentioned in a discussion of Russia, but allow me to return to that point in a moment.

The breakup of the Soviet Union in 1991 was one of the most significant and surprising events of the 20th Century.

We knew at the time that the challenge of transition in Russia would really be very difficult, but we had real reasons to be optimistic that Russia --- with its educated citizens and its extraordinarily abundant natural resources --- would make significant progress toward democracy and open markets.

There was also great optimism stemming from the belief that, with the Cold War over, Russia and America would reap many benefits from joining together to help stabilize a world that was bound to change in many ways.

Some would argue that, at the onset of this post-Cold War world, we did not  fully appreciate the extent to which those vying for power within Russia, would use corrupt privatizations and manipulate criminal proceedings, to take control of the vast natural and industrial wealth of Russia.
 
Looking back, it appears that average Russians began to associate American-supported-and-funded reform efforts with deprivation and government corruption and began to suspect the American motives behind those reforms.

Corrupt officials in Russia fanned the flames of resentment by using nationalist rhetoric, to turn attention away from the continuing theft of resources and manipulation of ownership of major Russian companies.

And, it appears that, as tough Russian foreign policy rhetoric increased, Russian democracy suffered.

Over the past decade, by some accounts, close to 90 independent Russian reporters have been murdered or have died under mysterious circumstances.
 
Almost all of them were reportedly investigating government corruption.

Meanwhile, the Kremlin continues to pursue a foreign policy that appears designed to create more difficulties for the US and its allies around the world.

Russia continues to assist Iran’s nuclear program and to sell highly advanced arms to Iran and Syria, possibly Sudan, among others.

As Russia objects to a limited missile defense system in Europe, it supplies Iran with missile technology that enhances the Iranian regime’s ability to threaten not only Israel and U.S. interests in the Middle East, but to strike at the heart of Europe.

Russia has tried to impose energy or trade blockades on neighboring states and to extend its control over energy resources by proposing a gas cartel.
 
It refused to remove its troops from Moldova and still supports separatist regions in Georgia.

But what are the long-term trends?

Perhaps the answers lie with developments inside Russia.

First, outside of the major cities, Russia remains a vastly under-developed country.

Second, Russia’s population is in decline, and the minority Muslim population is on the rise, reported to be wary of the Russian government in the wake of its brutal tactics in Chechnya, and filled with young people who may be susceptible to Islamic extremism.

And, lastly, there are continuing reports of large-scale corruption within the Russian government.

In the late 1980s, it was hard to believe that the mighty Soviet Union would fall apart.

We later realized that we had failed to fully appreciate the warning signs.

In the 1990s, we realized too late, how corruption was undermining democratic and economic reform within Russia.

Today, at the start of the 21st Century, are we again failing to appreciate what is truly happening in Russia and the implications?

What will be the impact if the large-scale corruption continues over the coming years?

How will Russia deal with its falling population and rising Muslim minority?

If the circle around President Putin loses its hold on power after his departure from office, will another group rise up only to redistribute the wealth yet again?

I ask our witnesses to consider these points and share their views with us.

Thank you, Mr. Chairman.