Final answer:
Political risk in Russia is linked to the transition from the Soviet socialist system to a market economy, leading to authoritarian rule, corruption, and social issues. Economic growth has occurred alongside environmental damage and persistent poverty. These factors contribute to regional instability and complex relations with the international community, such as NATO.
Step-by-step explanation:
The high level of political risk currently evident in Russia can be attributed to a series of historical and economic transitions and issues. After the collapse of the Soviet Union in 1991 under Mikhail Gorbachev's policies of perestroika and glasnost, Russia experienced a period of rapid privatization and a shift to a capitalist economy. This transition brought about social and political problems including high levels of authoritarian rule and corruption. The economy, while strengthened post-2000 under Vladimir Putin's presidency, still suffers from a need to modernize the manufacturing base to compete globally.
Russia's export of natural resources like oil and natural gas has been a key factor in its economy's rebound, particularly with the rise in energy prices. However, the concentration on natural resource exports has also led to environmental issues such as massive oil spills and increased air pollution from automobiles, particularly around industrial cities like Moscow since 1991. Furthermore, despite becoming a key player in the global economy and experiencing substantial economic growth, much of Russia's population still faces poverty and social problems.
These fundamental changes in the Russian economy and society have contributed to a source of regional instability, which is viewed differently by various members of the international community, including NATO. Complications arising from transitioning to a market economy, environmental damage, and varied security threat perceptions continue to shape Russia's political landscape, influencing the level of political risk.