The partial results of liberalization (lifting price controls) included worsening already apparent hyperinflation,[citation needed] initially due to monetary overhang and exacerbated after the central bank, an organ under parliament, which was skeptical of Yeltsin's reforms, was short of revenue and printed money to finance its debt.

The rationale of the program was to squeeze the built-in inflationary pressure out of the economy so that producers would begin making sensible decisions about production, pricing and investment instead of chronically overusing resources—a problem that resulted in shortages of consumer goods in the Soviet Union in the 1980s.

By letting the market rather than central planners determine prices, product mixes, output levels, and the like, the reformers intended to create an incentive structure in the economy where efficiency and risk would be rewarded and waste and carelessness were punished.

[17] In 1995, facing severe fiscal deficit and in desperate need of funds for the 1996 presidential elections, the government of Boris Yeltsin adopted a "loans-for-share" scheme proposed by banker Vladimir Potanin and endorsed by Anatoly Chubais, then a deputy prime minister, whereby some of the largest state industrial assets (including state-owned shares in Norilsk Nickel, Yukos, Lukoil, Sibneft, Surgutneftegas, Novolipetsk Steel, and Mechel) were leased through auctions for money lent by commercial banks to the government.

Furthermore, the end of the Cold War and the cutback in military spending affected industry quite dramatically making it difficult to quickly retool equipment, retrain workers, and find new markets.

In the process of economic re-tooling, an enormous body of experience, qualified specialists and know-how was lost or misallocated, as the plants were sometimes switching from, for example, producing hi-tech military equipment to making kitchen utensils.

Instead the companies, mainly large industrial firms, were traditionally responsible for a broad range of social welfare functions—building and maintaining housing for their work forces, and managing health, recreational, educational, and similar facilities.

[22] For example, former state enterprise managers were highly skilled at coping with the demands on them under the Soviet system of planned production targets, but discouraged the risk-and-reward centered behavior of market capitalism.

After the initial turmoil and euphoria of early marketizations, Russia's economy sank into deep depression by the mid-1990s due to botched reform efforts and low commodity prices globally but not before George H. W. Bush helped Yeltsin with "an unparalleled opportunity to change the nuclear posture of both the United States and the Soviet Union" and to end the Cold War peacefully with the Nunn–Lugar cash-for-weapons scheme, in order to avoid the worst of the dissolution of the vast Soviet technological empire.

If all these categories of jobless, semi-employed and unpaid workers were taken into account, the 18% Russian unemployment figure cited in June 1995 by labour market expert Tatyana Maleva of the Institute of Economic Analysis seemed real.

These were the groups that had enjoyed the benefits of Soviet-era state-controlled wages and prices, high state spending to subsidize priority sectors of the economy, protection from competition with foreign industries, and welfare entitlement programs.

[35] In the 1990s, former Soviet bureaucrats, factory directors, aggressive businessmen and criminal organizations used insider deals, bribery and simple brute force in order to grab lucrative assets, which were previously state-owned.

[citation needed] Between 1987 and 1992, trading of natural resources and foreign currencies, as well as imports of highly demanded consumer goods and then domestic production of their rudimentary substitutes, rapidly enabled these pioneering entrepreneurs to accumulate considerable wealth.

The Western world generally advocated a quick dismantling of the Soviet planned economy to make way for free-market reforms but later expressed disappointment over the newfound power and corruption of the oligarchs.

[39] Meanwhile, the opposition Communist Party of the Russian Federation had already gained ground in parliamentary voting on 17 December 1995, and its candidate, Gennady Zyuganov, had a strong grassroots organization, especially in the rural areas and small towns, and appealed effectively to memories of the old days of Soviet prestige on the international stage and the socialist domestic order.

[40] Panic struck the Yeltsin team when opinion polls suggested that the ailing president could not win; members of his entourage urged him to cancel presidential elections and effectively rule as dictator from then on.

[42][43] The president's inner circle assumed that it had only a short time in which to act on privatization; it, therefore, needed to take steps that would have a large and immediate impact, making the reversal of reform prohibitively costly for their opponents.

Oil is also a major source of government tax revenue which brought significant negative implications for Russia's fiscal situation, foreign exchange stores and ultimately, the value of the ruble.

U.S. President Bill Clinton's treasury secretary, Robert Rubin, also feared that a Russian collapse could create a panic on world money markets (and it indeed did help bring down one major US hedge fund Long-Term Capital Management).

Finally, the economy has been helped by an infusion of cash; as enterprises were able to pay off arrears in back wages and taxes, it, in turn, allowed consumer demand for the goods and services of Russian industry to rise.

When appointed, Putin was a relatively unknown politician, but he quickly established himself both in public opinion and in Yeltsin's estimation as a trusted head of government, largely due to the Second Chechen War.

Putin has confronted several very influential oligarchs (Vladimir Gusinsky, Boris Berezovsky and Mikhail Khodorkovsky, in particular) who attained large stakes of state assets, allegedly through illegal schemes, during the privatization process.

Putin's stand against oligarchs is generally popular with the Russian people, even though the jailing of Khodorkovsky was mainly seen as part of a takeover operation by government officials, according to another Levada-Center poll.

[98] While efforts to make the elections transparent were publicized, including the usage of webcams in polling stations, the vote was criticized by the Russian opposition and by international observers from the Organization for Security and Co-operation in Europe for procedural irregularities.

On the same day, according to Russian president Vladimir Putin, he called an all-night meeting of his military leaders, at the end of which he ordered them to "begin the work to bring Crimea back into Russia.

"[110] By 27 February, unmarked Russian troops in Ukraine were establishing a blockade of the borders and Ukrainian military bases in the Autonomous Republic of Crimea, and took armed control of its regional parliament.

[112][113] On 1 March, from exile, Viktor Yanukovych requested that Russia use military forces "to establish legitimacy, peace, law and order, stability and defending the people of Ukraine".

[131] Following president Putin's announcement of partial mobilization, massive Russian emigration began, with estimates of hundreds of thousands of male citizens fleeing, many going to Kazakhstan, Serbia, Georgia and Finland.

[135] On 30 September 2022, Russia's president Vladimir Putin announced the annexation of Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts of Ukraine in an address to both houses of the Russian parliament.

Under Putin, Russia has sought to strengthen ties with the People's Republic of China by signing the Treaty of Good-Neighborliness and Friendly Cooperation as well building the Trans-Siberian oil pipeline geared toward growing Chinese energy needs.