Boris Yeltsin was elected the President of Russia in June 1991, in the first direct presidential election in Russian history. During and after the Soviet disintegration, wide-ranging reforms including privatization and market and trade liberalization were being undertaken, including the radical changes along the lines of "shock therapy" as recommended by the United States and International Monetary Fund. All this resulted in a major economic crisis, characterized by 50% decline of both GDP and industrial output between 1990–95.
The privatization largely shifted control of enterprises from state agencies to individuals with inside connections in the government system. Many of the newly rich businesspeople took billions in cash and assets outside of the country in an enormous capital flight. The depression of state and economy led to the collapse of social services; the birth rate plummeted while the death rate skyrocketed. Millions plunged into poverty, from 1.5% level of poverty in the late Soviet era, to 39–49% by mid-1993. The 1990s saw extreme corruption and lawlessness, rise of criminal gangs and violent crime.
The 1990s were plagued by armed conflicts in the North Caucasus, both local ethnic skirmishes and separatist Islamist insurrections. Since the Chechen separatists had declared independence in the early 1990s, an intermittent guerrilla war was fought between the rebel groups and the Russian military. Terrorist attacks against civilians carried out by separatists, most notably the Moscow theater hostage crisis and Beslan school siege, caused hundreds of deaths and drew worldwide attention.
Russia took up the responsibility for settling the USSRs external debts, even though its population made up just half of the population of the USSR at the time of its dissolution. High budget deficits caused the 1998 Russian financial crisis and resulted in further GDP decline.
On 31 December 1999 President Yeltsin resigned, handing the post to the recently appointed Prime Minister, Vladimir Putin, who then won the 2000 presidential election. Putin suppressed the Chechen insurgency, although sporadic violence still occurs throughout the Northern Caucasus. High oil prices and initially weak currency followed by increasing domestic demand, consumption and investments has helped the economy grow for nine straight years, improving the standard of living and increasing Russias influence on the world stage. While many reforms made during the Putin presidency have been generally criticized by Western nations as un-democratic, Putins leadership over the return of order, stability, and progress has won him widespread popularity in Russia.
On 2 March 2008, Dmitry Medvedev was elected President of Russia, whilst Putin became Prime Minister. Putin returned to the presidency following the 2012 presidential elections, and Medvedev was appointed Prime Minister.
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