Despite its muscular foreign and defense policy, Russia is plagued with internal weaknesses, includ­ing a shrinking population and a mortality rate con­siderably higher than the rate for the rest of Europe. By curtailing political and economic freedoms, the Kremlin may have strengthened its rule but weak­ened Russian society. Grasping domestic factors is vital in understanding what is driving Russia's for­eign policy.

As long as Iraq, Iran, and the war on terrorism continue to top Washington's agenda, it is not in America's strategic interest to challenge Russia, but the U.S. still needs to engage the Russian people and government and protect U.S. interests. Specifically, the U.S. should:

• Continue to negotiate and cooperate with Russia on issues of mutual concern,
  
• Promote Russia's integration into the global economy,
  
• Provide technical assistance in medical fields,
  
• Increase support for civil society groups,
  
• Reach out to the Russian people through public diplomacy, and
  
• Establish a multidisciplinary project to monitor Russia's domestic developments and how they influence Russia's domestic and foreign policy.

Demographic Crisis. Russia's drug addiction rates and declining demographics threaten many of the Kremlin's ambitions. Lower birthrates and high mortality rates have created a demographic crisis. Disease, drugs, and alcoholism are major contribut­ing factors in the high mortality rate. Furthermore, as Russia's Slavic population is declining, the Mus­lim population is increasing, changing the fabric of some regions and big cities. This demographic shift has led to considerable tension and some intereth­nic violence within Russian society.

Decline of Russian Liberalism. Because of Rus­sia's diminished international influence and the eco­nomic chaos experienced during the Gorbachev and Yeltsin presidencies, Western models of politi­cal and economic liberalization quickly lost favor among the post-Soviet elites. They have since resur­rected a model of statism, authoritarianism, and great-power jingoism. These extreme forces in Rus­sia's political sphere are influencing the govern­ment. Classical liberal parties such as Yabloko and the Union of Right Forces are denied access to tele­vision and radio outlets, with the exception of offi­cially allocated election advertising time, and at times are denounced as "agents of the West" by Rus­sian elites and nationalist factions.

The ruling elite has ushered in official "patrio­tism" and historical perspectives that occasionally brush off if not rehabilitate Stalinist repressions and laud state power. Nashi, a nationalist youth move­ment created and funded by the Kremlin, provides the street muscle and extras for mass pro-govern­ment demonstrations and to intimidate domestic opponents and foreign diplomats. The state has also revised the history of the tragic Soviet past. New textbooks praise Josef Stalin as an effective leader, whitewashing his crimes.

Xenophobia has spread throughout Russian soci­ety. Over half of the population endorses the idea of "Russia for [ethnic] Russians," and racial violence has become increasingly prevalent as more violent, ultranationalist, anti-immigrant groups gain legiti­macy. Russia's Muslim population, particularly in the North Caucasus, has become increasingly sus­ceptible to radical ideas as the line between citizen and immigrant is often blurred. This is an explosive mix, and the Kremlin has done little to stem the tide of extremism, perhaps to cultivate an "enemy within" to unite Russians and position the Kremlin as Russia's only defense.

Managed Democracy. Despite the appearance of formal democratic processes, the Kremlin curtails democratic development. The corrupt, elitist system features an extremely powerful president and pliant state institutions. Russia, which ranks extremely low on various democratic indices, may be further downgraded if international organizations find major flaws with the December 2007 parliamentary elections and the March 2008 presidential election.

The Kremlin manipulates the election system to ensure the desired outcome. In 2005, it ended direct election of regional governors. Majority vote in elec­toral districts has been replaced by proportional election using national party lists, which the Kremlin can easily control. Minimum voter turnout require­ments and the option of voting "against all" candi­dates have been eliminated to reduce the impact of voter apathy and protest votes in the next elections.

The media and civil society are severely curbed. Almost all media outlets, with the excep­tion of the Internet, are controlled by the Kremlin. Public debate is limited, and foreign funding of nongovernmental organizations is restricted by the government.

The Economy. Russia's impressive economic growth is mostly due to its sale of raw materials, particularly oil and natural gas, and its spillover effect. The Kremlin has increasingly moved toward state control of key industries and assets. Expansion of the bureaucracy has increased the potential for widespread government corruption.

The energy sector is particularly known for cor­ruption, restrictions on foreign companies, and consolidated state control. The Kremlin is also increasing its share of the aerospace, weapons pro­duction, shipbuilding, nuclear, and automotive sectors. These state-controlled industries will likely boost Russia's military-industrial complex and could lead to a new Russian rearmament.

Conclusion. U.S.-Russian relations are at their lowest point since the end of the Cold War, and many trends in Russian foreign policy are justifiably disturbing. U.S. officials should develop a comprehensive strategy to serve America's objectives, keeping in mind the significant internal vulnerabilities of the Russian state. Although the elites may not always recognize it, Russia, given its lack of strategic allies, can ill afford to "lose" the West.

The U.S. government should address Russia's adverse domestic trends through a sustained Amer­ican effort to reach out to the Russian public, busi­nesses, and intellectual community and to empower the remnants of Russia's free media and civil society. At the same time, some important areas of bilateral relations remain open to cooperation, and the U.S. government should do its best to encourage and sustain dialogue with its Russian counterparts.

Ariel Cohen, Ph.D., is Senior Research Fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation. The author wishes to thank Yevgeny Volk, Ph.D., Coordinator of The Heritage Foun­dation's Moscow Office, for providing valuable comments on this paper. Heritage intern Olena Krychevska also contributed to the production of this paper.