Shortly after coming into power, Russian President Vladimir Putin's administration significantly changed Moscow's foreign and security priorities. These changes were based upon the realization that the real and present danger to the country's security comes from the low-intensity conflicts emerging along Russia's vulnerable underbelly, which stretches from the Black Sea to the Pamir Mountains. While Russia's relations with more powerful neighbors in the East and West are not free from controversy, challenges coming from there are less acute and immediate.
Russia, unlike the Soviet Union, possesses very limited resources. While in Soviet times Moscow could spend (under some estimates) up to $100 billion, in 2001 the overall size of the Russian federal budget is estimated at no more than $40 billion under the market's ruble-to-dollar exchange rate. Though next year national defense spending will increase by more than 50 billion rubles ($1.7 billion), it will still be at a level of merely $6.9 billion (207 billion rubles under the official average exchange rate expected for 2001), or about 2.3% of the US defense budget. […]
