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Russia: The Economy
From Grolier's The New Book of Knowledge
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Throughout most of the 1900's, during the years of Soviet rule, Russia's economy was controlled by the state, meaning the leaders of the ruling Communist Party.
Their policies were based on socialist philosophy, which rejected the capitalist system, claiming it "enslaved" workers to the owners of private industry.
The socialists believed that every citizen should equally contribute to and benefit from the nation's productivity.
The Communists decided what goods and services would be produced, how much they should cost, and even who could obtain them. Extreme emphasis was placed on heavy
industry, particularly the manufacture of military weapons and equipment.
Radical economic reforms were begun immediately following the breakup of the Soviet Union in 1991. However, the transition from collective (state-owned) to private
(individually owned) enterprise has been difficult, and many Russians have suffered the hardships of inflation, falling wages, food shortages, and unemployment.
Services
About 55 percent of Russia's workforce is employed in the service industries. These include financial services, wholesale and retail sales, government and social
services, transportation, communication, and other public utilities. Tourism, which feeds a variety of service industries, has been on the rise since the early 1990's.
Manufacturing
About 30 percent of Russia's workforce is employed in manufacturing industries. Chief products include the equipment and machines needed to mine and process coal,
oil, and natural gas. Steel is also produced for the manufacture of aircraft, space vehicles, ships, road and rail transportation equipment, communications equipment,
agricultural machinery, tractors, and construction equipment. Medical and scientific instruments, textiles, foodstuffs, and handicrafts are also produced.
Agriculture
More than half of Russia's cropland is devoted to growing grains—rye, barley, and oats, in addition to wheat. One-third is sown with fodder crops—grasses
and corn—used to feed livestock. The remainder is used to produce commercial crops, notably sugar beets, sunflower seeds, and vegetables. Cattle are raised for
beef and dairy products.
Foreign Trade
Russia is a major exporter of petroleum and petroleum products, natural gas, wood and wood products, metals, chemicals, and a wide variety of military goods.
At one time, Russia exported wheat and other grains to Western Europe. But today it must import grain from the United States and elsewhere in order to feed its people
with the most common staple, bread. Other imports include machinery and equipment, consumer goods, medicines, meat, and sugar. Most fruits must also be imported.
Transportation
Workers in Russia usually commute by public transportation, since there are few private automobiles and only a sparse network of good roads. The subways in Moscow and
St. Petersburg are clean, attractive, reliable, and cheap.
Russia has an extensive railway network, although it is increasingly in need of repair. It includes the Trans-Siberian Railroad, the world's longest continuous railroad,
which runs between Moscow and the Pacific coast port of Vladivostok. Nearly half of all freight is carried by truck, in spite of the generally poor condition of highways.
About one-third is transported by railroad and the rest by water and pipeline. Aeroflot, one of the world's largest airlines, handles most of the long-distance travel
in the vast country.
Ships provide transportation on inland and international waters. Although Russia has an enormous coastline, much of it remains icebound for many months of the year and
is of limited use for shipping. The only seaport with year-round ice-free access to the open ocean is Murmansk, near the border with Norway. Other northern ports are
kept open only with icebreakers.
Communication
Russia has more than 7,300 television broadcast stations and 850 radio stations. Newspapers with large circulations include Izvestia, Moskovsky Komsomolets,
Pravda, and the English-language St. Petersburg Times. Technically advanced communications, such as the use of computers, has grown as access to digital
lines has improved and the number of Internet service providers (ISP's) has increased.
Donald W. Treadgold
University of Washington
Author, Twentieth Century Russia
Reviewed by Ilya Prizel
University of Pittsburgh
