2. Conflict The most violent conflicts have occurred in the area of the Caucasus Armenia, Azerbaijan, and Georgia together are about the size of California but form about 50 different ethnic groups

3. Chechnya A northern territory that remained a part of Russia after the collapse of the Soviet Union (and is predominantly Muslim) In response to their demand for independence, Russia invaded them twice in the 1990s

4. Georgia Many Georgian refugees died while crossing snow- covered mountains to seek asylum They were forced to leave by Abkhazians (people of a northwestern resort region)

5. Armenia and Azerbaijan The two republics fought over an area called Nagorno- Karabakh (most of the land is in Azerbaijan but ¾ of the population are Armenian) Armenia now claims the territory, but only after tens of thousands died and a million became refugees

6. Privatization Removing of price controls set by the government created high inflation (inc. of 250%) on most goods Government sold off large businesses to individuals and private companies Many people could not afford to buy them Government offered vouchers (loans) which could be paid back with future profits Many were not profitable Led to an economic crash in 1998 Nearly 40% of population lived below poverty line

7. Obstacles to Reform (Capitalism) Distance Decay: long distances make communication and transportation difficult; officials far from capital of Moscow often refuse to carry out reform 2000 President Vladimir Putin created seven districts each with its own governor-general to gain more control Organized Crime: “Russian mafia” created their own economy, controlled 40% of private companies, has slowed economic reform

8. Nuclear Threat After the collapse of the S.U., other nations began to wonder what would become of their nuclear materials Biggest threat to the U.S.: Russian nuclear missiles being stolen or misused (created a $30 billion program to ensure that would not happen) Some republics (Russia and Ukraine) have agreed to dismantle old nuclear reactor plants (to avoid another Chernobyl) and dispose of other nations’ nuclear waste to revive their economies (with the help of other nations such as the U.S.)