The Economy

During czarist times much of Russia's agricultural land was held in royal, church, and private estates; the rest was held, and crudely worked in small plots, by peasants. After the Russian revolution of 1917, state ownership and operation of farmland became a Communist goal. Hampered by a shattered economy and strong resistance from landowners, the Communists did not begin serious efforts to collectivize farmland until 1928.

Under the Soviet agricultural system, there were three types of farm production units---collective farms, state farms, and personal plots. Union OF Soviet Socialist Republics,

After the collapse of the Soviet Union, some of Russia's farms continued to be state-owned, but many state-owned farms were transferred to private ownership.

Areas that can be farmed are limited mainly by climate. Most parts of European Russia have reasonably favorable weather, except that rainfall is never abundant and damaging droughts often occur. Most of Siberia is handicapped by either a short growing season or scant rainfall. Most of the farming in this region is limited to a narrow southern strip along the Trans-Siberian Railway.

Grains for food and fodder are the major crops. Wheat is the leading grain produced. It is raised throughout the Russian steppe. The most productive regions are the central black-earth region northeast of Ukraine and the north Caucasus region between the Black and Caspian seas. Barley, oat, rye, and millet production is also significant. Total grain production is insufficient to meet all of Russia's requirements. Large amounts of imported grain, especially wheat, are needed.

Sugar beets are the only domestic source of sugar in Russia. They are produced mainly in the north Caucasus and the central black-earth regions. Russian beet sugar production does not meet domestic needs, and cane sugar competes with grain as Russia's largest agricultural import by value.

Chief among the many vegetables grown are potatoes. Also important are cabbages, beets, peas, cucumbers, and onions. Sunflower seed is the principal source of vegetable oil. Flax, grown mainly in the area around Moscow, is the major fiber crop. Hemp is also important. A wide variety of fruits, vegetables, and other crops are also produced.

About 60 per cent of Russia's agricultural production comes from livestock. Cattle, sheep, goats, and hogs are the most numerous livestock raised, excluding poultry. Dairy farms are also important, especially in western Siberia, where much of the milk is processed into butter and cheese. Reindeer are raised in the northern parts of the country.

Russia usually ranks among the world's top five fishing nations. Many of its fishing vessels are large, modern ships that operate on seas throughout the world. The North Atlantic, Arctic, and North Pacific oceans are the chief fishing grounds. In tonnage the catch consists mainly of pollock and mackerel. The catch also includes anchovies, hake, sardines, cod, and herring. Caspian Sea sturgeon provide caviar, for which Russia is famous. Major fishing ports include Vladivostok, Murmansk, Nakhodka, and Kaliningrad.

The forest resources of Russia are by far the largest in the world. Wood is widely used as a building material and fuel and also in the production of pulp, paper, and many synthetic materials. More than three quarters of Russia's forest resources are in Siberia but because of better transportation the principal timber- and wood-producing regions are in European Russia, especially in the northwestern part of the country. Russia is second to the United States in total wood production.

Russian industrial development occurred mainly in the Soviet era. During this era, great emphasis was placed on the development of heavy industries such as iron and steel, machinery, and electric power. Light industries, producing such consumer products as clothing, household goods, and processed foods, received little attention. The development of new manufacturing regions, especially in Siberia, also occurred during this era. Today, Russia is a major industrial power.

European Russia and the Ural Mountains region contain the bulk of the country's manufacturing. Here are the large industrial regions of Moscow, St. Petersburg, the Volga River valley, and the Urals. Here, too, are the most heavily industrialized cities--- Moscow, St. Petersburg, Nizhniy Novgorod, Yekaterinburg, Chelyabinsk, Samara, and Perm. Novosibirsk is the principal industrial center in Siberia.

The rapid development of the electric power industry during the Soviet era made possible Russia's industrial growth. Most of Russia's electricity is used for industrial and transportation purposes rather than for household use. Coal and water are the chief resources used to generate electricity. Nuclear power is also important. Of lesser importance are peat and oil shale.

As in other heavily industrialized countries, iron and steel are the most widely-produced metals in Russia. There are three main iron and steel producing regions: west-central European Russia, in the area near Kursk; the southern Urals; and south-central Siberia, in the area near Novokuznetsk. Other primary metals are smelted and refined in many parts of the country, especially in the Urals.

Russia manufactures most of the machinery required by a modern industrial nation. The chief types produced include transportation equipment (such as ships, airplanes, locomotives, and motor vehicles), agricultural machinery (tractors and harvesters), and electrical machinery (turbines, engines, and motors). Russia also manufactures many kinds of machines for the construction, metallurgical, mining, metal-working, textile, and chemical industries.

Moscow and St. Petersburg are the leading machine-building cities, as they were in czarist times. Having large supplies of skilled labor, they produce a wide range of machine tools and instruments. Throughout the rest of Russia, the machine industries are usually those best suited for the local economies. In the iron-rich southern Urals, for example, the manufacturing of machines for the mining and metallurgical industries is important, especially in Yekaterinburg. Agricultural machinery is generally produced near the main agricultural regions.

The vast majority of Russia's oil refineries are west of the Urals. Some of Russia's refineries, such as those at Samara and Ufa, are located near the oil fields. Since the 1950's, however, most new oil refineries have been built near points of regional consumption, such as Moscow, Nizhniy Novgorod, and Kirishi, near St. Petersburg.

Chemical production is widely scattered. Such diverse products as acid, cellulose, explosives, dyes, fertilizers, industrial alcohol, synthetic resins and fibers, paints, and drugs are among the chief products. Some chemicals are made as by-products of other industries, notably the coal, metal, petroleum, and wood industries.

Textiles were one of the first industries developed during czarist times. Cottons, woolens, and linens are the chief textiles manufactured. They are produced largely in and around Moscow and Ivanovo. Clothing factories are more dispersed and are usually located in or near large cities.

The food-processing industry is widely distributed throughout European Russia. Among the chief branches are flour grinding, fruit and vegetable processing, liquor distilling, meat and fish packing, and sugar refining. Many food-processing plants are located near the major agricultural regions, such as the central black-earth region and the North Caucasus region. Other plants are located near large urban markets.

About a third of Russia's freight is shipped by rail. Bulk commodities, including coal, iron ore, lumber, and grain, account for most of the freight shipped by rail. Railways are historically important, for they contributed significantly to the economic development of Russia, especially Siberia and other outlying areas of the Russian and Soviet empires. Railways total more than 53,500 miles (86,000 km). Most of the main lines are electrified.

Moscow is the hub of Russia's railway network, which is concentrated in European Russia. The Trans-Siberian Railway, the longest rail line in the world, spans Siberia from east to west. Along it are many spurs; longer branches lead to China and Mongolia. The BAM (Baykal-Amur-Mainline) crosses 2,000 miles (3,200 km) of eastern Siberian wilderness north of the Trans-Siberian. Russia is linked by rail to most of the other former Soviet republics.

Modern subway systems serve Moscow, St. Petersburg, and several other major cities.

provide navigable inland waterways in some parts of the nation. They are, however, of limited use because of the long winter freeze that closes them to navigation. European rivers carry the most traffic. Passenger service is provided on the Volga and other principal rivers by a fleet of large, modern riverboats.

Canals connect many rivers. The old Mariinsk system of canals, lakes, and rivers, connecting St. Petersburg with the Volga River, has been modernized. The Volga-Don Canal, a huge project completed in 1952, links the Volga and Don rivers at Volgograd. Other important canals include the Moscow-Volga Canal and the White Sea-Baltic Sea Canal.

Except for primary highways connecting principal cities, roads in Russia are generally of poor quality. There are about 404,000 miles (650,000 km) of hard-surfaced roads, about one-ninth the total in the United States. In comparison to most people living in Western countries, few Russians have automobiles. Long-distance truck transportation is developing. Buses, which account for the largest share of passenger transportation, and streetcars provide the main means of transportation in most cities.

The development of an extensive network of pipelines occurred during the Soviet period, especially after the mid-1950's. Today, petroleum and natural gas pipelines crisscross much of Russia and form one of the most extensive pipeline systems in the world. Most of the flow is westward from the west Siberian oil fields and the Volga-Ural fields into European Russia. Pipelines built during the Soviet era link Russia to other European countries and to other former Soviet republics.

International service is provided mainly by Aeroflot Russian International Airlines (ARIA), which is owned by the government. There are many domestic carriers. The largest include Vnukovo Airlines and Transaero; both also fly some international routes.

Russia has few good ports. Most are frozen during the long winters and can be kept open only by the constant work of icebreakers. Few ports have direct access to the high sea, which has been a troublesome problem for many centuries. Among the chief ports are Murmansk, on the Barents Sea; Archangel, on the White Sea; St. Petersburg, on an arm of the Baltic Sea; Kaliningrad, on the Baltic Sea; Novorossiysk, on the Black Sea; and Na.khodka and Vladivostok, on the Pacific. Despite the limitations of the ports, the Russian merchant fleet is among the world's largest.

During the Soviet era newspapers, books, magazines, radio, television, movies, and all other forms of public communication were controlled by the government, and many functioned largely as propaganda tools of the Communist party. This began to change in the late 1980's when some freedom was allowed in the media. After the collapse of the Soviet Union, the Russian government continued to exert some control, but some of the media, especially newspapers, became independent. The main news agency is the Information Telegraph Agency of Russia-Telegraphic Agency of the Sovereign Countries (ITAR/TASS).

There are about 4,800 newspapers published in Russia. Argumenty i Fakty (Arguments and Facts) is the most widely distributed weekly. Popular dailies include Trud (Labor), Izvestiya (News), and Moskovsky Komsomolets (Moscow Young Communist, a name that survives despite the demise of the Soviet Union). Thousands of magazines and journals are also published. Most of the magazines are of a serious nature, dealing with such matters as politics, economics, arts, and sciences.

Radio and television broadcasts are also generally of a serious nature but also include some entertainment. Radio Moscow broadcasts on shortwave in some 50 languages and reaches most of the world.

During the Soviet era, Russia's economy, as the rest of the Soviet Union's, was centrally planned and not based on market forces. Also, the Soviet Union's currency was not convertible. Consequently, the Soviet Union was not fully integrated into the world's free markets. The economic reforms of the Soviet era and the subsequent reforms instituted by Russia, together with generous amounts of foreign aid, have begun to bring Russia into these markets.

Because the domestic economy of the Soviet Union was largely based on the interdependence of the union republics, a great deal of Russia's trade is with the other former Soviet republics. Much of the remaining trade is with the countries of eastern and western Europe.

Russia's basic currency unit is the ruble, which is divided into 100 kopecks.

Under the czars, Russia was an economically underdeveloped country with very little industry. During the Soviet era Russia grew to become an industrial giant. Russia alone accounted for 60 to 70 per cent of the Soviet Union's industrial production.

The Soviet economy was centrally planned and not based on market forces. Some characteristics of the Soviet economic system included wage and price controls, government-set production quotas, and the dominance of the heavy industry sector over the consumer industry sector. Union OF Soviet Socialist Republics,

During 1990-91 the Soviet government approved a variety of measures aimed at gradually introducing a market-based economy. After the Soviet Union collapsed in 1991, Russia continued to implement economic reforms and abolished most price controls. Russia suffered from many economic problems because of the difficulty of changing a centrally planned economy into a market economy. Among these were rising rates of unemployment and of inflation.

Along with economic difficulties, Russia had many environmental problems, largely because economic development during the Soviet era was pursued at the expense of the environment. Air pollution and contamination of water and soil were serious problems.