After two decades and nearly $3 billion in investments, the United States Agency for International Development (USAID) is shutting down its operations in Russia, having been accused by the Kremlin of interfering in Russia's internal political affairs.
The move comes amid generally deteriorating relations between Moscow and Washington and ongoing suspicions on the part of the Kremlin that the pro-democracy protest movement that erupted after allegedly fraudulent Duma elections last December has been funded and directed from abroad.
It also coincides with the coming into force of a new law, passed by the State Duma in June, which requires most Russian non-governmental organizations that engage in "political activity" and receive any outside funding to register as "foreign agents" and describe themselves as such in all their public materials.
Russia's Foreign Ministry posted a tough statement on Wednesday, saying that USAID has been ordered to cease operations in Russia by Oct. 1, because "the character of the agency's representatives' work in our country did not always comply with the declared aims of cooperation in bilateral humanitarian cooperation," it said.
"We are talking about [USAID] issuing grants in an attempt to affect the course of the political process in the country, including elections at different levels and institutions in civil society," it added.
In Washington, State Department spokesperson Victoria Nuland said that the agency was closing down its Russian operations in response to a decision by the Russian government, but added the US might find other avenues to support human rights and civil society projects in Russia.
"The AID budget for fiscal year 2012 is about $50 million, in addition to the civil society programs. We will look for ways to continue with those members of Russian civil society who want to continue to work with us," Ms. Nuland said.
A list of USAID programs in Russia shows that the agency has supported a wide range of causes, including child welfare, HIV/AIDS prevention, promotion of professional exchanges, consultation on legislation, microfinance for Russian small businesses, assistance in restructuring the Russian electricity sector, helping the disabled, protecting wildlife, and fighting human trafficking.
The controversial aspects of its work, from the Kremlin's point of view, would probably include USAID being a "proud supporter of Russia’s oldest human rights organizations that have been pivotal in promoting support for democratic values throughout Russia."
Another issue might be the agency's backing for "civil society organizations whose number and influence has grown from 40 registered organizations in 1987 to approximately 300,000 today, not including state-funded public organizations. These organizations contribute to Russia’s economic, political and social life in numerous ways and provide opportunities for citizens to help create better communities and elevate their voices," according to the USAID website.
The authors of the Russian NGO bill singled out as their main targets organizations like the grassroots election-monitoring group Golos, whose thousands of polling station observers were instrumental in detecting and publicizing alleged mass fraud in last December's Duma elections.
Golos has been a major recipient of funds from USAID.
"Things are changing, and you can see that the relationship between the US and Russia is growing constantly worse. In this atmosphere, it was not likely that USAID would be able to continue as before in Russia," says Sergei Strokan, a foreign affairs columnist for the Moscow business daily Kommersant.
"[President Vladimir] Putin made it clear from the beginning of his new term that he was moving away from trying to build close ties with the US, when he simply didn't show up at a G8 meeting that President Obama had specifically moved to accommodate him," says Mr. Strokan.
"In any case, Russia under Putin wants to shift its priorities to the Asia-Pacific region, and so relations with the US will not loom so large in future," he adds. "But Putin has also made clear that he has a long-standing suspicion of the US, and he is certain that it's behind the street protests against him."
In fact, when the protests against alleged electoral fraud first erupted last December, Mr. Putin's first public reaction was to specifically blame Hillary Clinton for inciting them.
"I can't see how USAID would even want to continue working here, when its activity now only brings rebukes and accusations of interference. This is going to be the face of the US-Russia relationship for the foreseeable future, I'm afraid," Strokan says.