Increased oil prices and the devaluation of the ruble, which spurred internal production because of the expense of imports, has helped pull Russia out of its steep economic slide. But these cyclical developments mask deep structural problems. There is only an embryonic system of property rights. The judicial system is feeble. There is a significant lack of transparency in business transactions.
Corruption is rampant among government officials.
Addressing any of these problems means confronting entrenched interests that will not yield willingly. Ignoring any of these problems will lead to further economic decline, and will test the endurance and the patience of the Russian people. In the international arena, Putin must face the consequences of his policy in Chechnya. The brutal pounding of Grozny may have helped coalesce his electoral chances at home, but it has drawn the condemnation of the international community. It also reveals a ruthlessness that is more consistent with an unreformed KGB agent than a Russian reformer.