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ECONOMY OF RUSSIAN REGIONS
Vera Valentinovna Ageeva
Tomsk Polytechnic University
Institute of Humanities, Social Sciences & Technologies
Department of History and Regional Studies
[email protected]
Plan
• Ural economic region
• West Siberian economic region
• East Siberian economic region
• Far Eastern economic region
Case-study
• The regions of Siberia and the Urals, which are leaders in
industrial production (Sverdlovsk, Chelyabinsk, Kemerovo
region), are characterized by the fact that a significant part of
the population lives and works in the small towns which
population is less than 50 thousand people. Each of these cities
is built near the mine or a small steel plant. The total economy
of this city is tied to the work of one company or one industry:
coal or asbestos mining, smelting of metal such as copper.
• Do you know how these cities are called in Russian economic
lexicon? Does structure of the economy of these cities affects
the lives of the people in them?
Monotowns
• A monotown is a city/town whose economy
is dominated by a single industry or
company. The term is especially often used
in Russia, where the Soviet planned
economy created hundreds of monotowns in
supposedly rational locations, often in
geographically inhospitable areas.
• The situation in many of Russia's
monotowns is highly problematic: they are
entirely dependent on the competitiveness of
a single company or factory, very unflexible
and based on Soviet-era economics and
technologies.
Monotowns
• Monotowns have high degree of infrastructure wear (roads, housing,
communications, power grids). Built during the Soviet period (and
some of the Urals towns - in the 18th and 19th centuries), these
towns do not have their own funds to upgrade because they have a
very poor budgets.
• Any fluctuations in the market of coal or metal, any fluctuations in
financial markets affect the lives of urban staff reductions in
enterprises or their complete stop. Because of the close connection
of the town with the main enterprise economic activity can also
disappear in this town. To find another job in this city is very
difficult. Establishing new plants is extremely rare.
• Some workers go to other cities to work, but they can not go forever
with the family as no money for new housing.
• Additional problems of such monotowns are bad ecology, high
mortality, alcoholism and drug addiction.
History of
monotowns
•
•
The Soviet plan economy aimed to establish industrial facilities in rational locations,
based on military, political, bureaucratic and economic criteria. The goal was to
maximise regional specialisation. The dominant enterprise was responsible not only
for production, but for providing social services to the population, such as housing,
child care.
After the dissolution of the Soviet Union, most of the monotowns' dominant
enterprises were privatised, and consequently many of them had gone bankrupt by
the end of the 1990s, either deliberately (usually it was more profitable to sell the
property of an enterprise than to keep it functioning) or due to uncompetitiveness,
caused by the shrinkage of the home market outside the consumer goods sector,
unrestricted import of low-cost industrial wares from China, Turkey or other
countries and the lack of long-term investments by the private owners, who were for
the most part interested in quick money rather than development or modernization.
Private owners also mostly refused to provide social services to the populations of
monotowns, referring to such practice as being "economically inefficient" - however,
the government's attempt to delegate the responsibility of providing social services
from the companies to the newly created local municipalities was mostly a failure, as
they lacked resources to complete the transformation. That led to a radical decrease
in quality of life in monotowns, which enjoyed higher-than-average wealth for the
most part of the Soviet period.
Monotowns today
• According to a Russian government study conducted in 1999 2000, there were 467 cities and 332 smaller towns in Russia
which could be classified as monotowns. The combined
population of these towns was 25 million, or a sixth of the
country's total population. The 900 monotown enterprises—
most of them involved in heavy industries such as
manufacturing, fuels, timber, pulp and metallurgy—accounted
for more than 30% of industrial production
Problems of monotowns
• Most monotowns were built essentially as residential extensions of
particular enterprises (so called "city-forming enterprises"), their
population being either engaged in the city-forming enterprise's
manufacturing process, or providing various services to the former
group. The core workforce in monotowns was largely formed by the
centralized workforce distribution system (people being assigned to
an enterprise for a certain amount of years after completing the
education - which essentially replaced tuition payment, or
transferred from other enterprises) rather than by spontaneous
migration processes, as it was the case in less specialized towns.
Combined, these factors led to narrow and inflexible economies and
an immobile workforce, by the standards of the market economy
newly introduced into the country in late 1980s - early 1990s.
Problems of monotowns
• By the time the city-forming enterprises had been
privatized and / or liquidated, the workforce
management system already ceased to exist, so the
leftover workforce could not be transferred to
other regions retaining the living conditions, as it
was done during the Soviet era following the
liquidation of a no longer needed enterprise.
• Monotown residents proved to be hesitant to move
away on their own and seek work elsewhere as
well, mostly because the state housing distribution
system lied almost dead at the time, and very low
market value of their real estate didn't let them
count on minimally comfortable apartments in any
other developed town (agricultural sector was and
is even more depressive in most regions of Russia,
making countryside largely unattractive for the
town-dwellers).
Problems of monotowns
• The monotowns suffered greatly in the late2000s recession, leading to mass unemployment
in the cities. Having no other hope, people have
only one option - to protest.
• In one high-profile incident, in 2009 some 300
residents of the north-western town of Pikalyovo
blocked a major highway to protest against large
delays in the payments of wages. Prime Minister
Vladimir Putin traveled to the city and ordered
the owner of the city's dominant company BasEl
Cement Pikalyovo, Oleg Deripaska to pay over
41 million rubles ($1.3 million) of wage arrears
to the city's residents. The sum was paid out and
the situation in the city calmed down, but
questions remained about the long-term viability
of the Pikalyovo plants.
Examples of Russian
monotowns
• Russia's largest monotown is Tolyatti, which has a population of
700,000. It is home to the large AvtoVAZ factory, which in late 2008
employed 106,000 people. AvtoVAZ is Russia's largest carmaker,
accounting for 1% of the country's GDP.
• As of 2014, the AvtoVAZ is owned by Nissan-Renault, which uses
even harsher workforce policies than the previous owner. However,
the situation is somewhat aided by widespread of small-scale car
parts producers and other small car-oriented enterprises in the
region, which are providing many additional workplaces.
• Dalnegorsk, located in the Russian Far East, is a monotown with a
population of nearly 40,000 people. The town's economy is
completely dominated by two mining and metallurgy companies:
JSC Bor and JSC Dalpolimetal, both subsidiaries of OOO UK
Russian mining company (RGRK). They produce zinc and lead
concentrates as well as boric acid colemanite.
Ural economic region
“The Backbone of the Nation’s Economy”
• This prominent industrial region consists of
the following subdivisions (with their
administrative centers): Bashkortostan (Ufa),
Chelyabinsk Oblast (Chelyabinsk), Kurgan
Oblast (Kurgan), Orenburg Oblast
(Orenburg), Perm Krai (Perm), Sverdlovsk
Oblast (Yekaterinburg) and Udmurt Republic
(Izhevsk). It is mostly located in the Central,
and partly in the Southern and Northern parts
of the Urals, but also includes parts of the
East European and West Siberian Plains. Its
extent is different from that of the Ural
Federal District.
Ural economic region
Geography and natural resources
• Lower part of the Chusovaya River.
• The region is crossed by rivers belonging to the Volga basin (Kama, Visher,
Chusovaya and Samara), Ob basin (Tobol, Iset, Tura and Tavda) and the
Ural River basin. Their potential hydropower resources are estimated at 3.3
million kilowatts. By 2010, there are only two dams and associated
reservoirs, both on the Kama River: Botkin Reservoir and Kama Reservoir.
• The climate is temperate continental in the western and continental in the
eastern part of the region. More than 40% of the area is covered by taiga
forests having the timber reserves of 3.5 billion cubic meters. The southern
part is dominated by the steppe, which is largely cultivated. The area is
exceptionally rich in various ores and minerals, such as valuable
chalcopyrite, nickel oxide, chromite, magnetite, bauxite, potassium salts,
manganese, aluminium, gold, platinum, as well as coal, oil and natural gas.
The area is famous for semi-precious stones, such as emerald, amethyst,
aquamarine, jasper, rhodonite, malachite and diamond.
Ural region
• In addition to Sverdlovsk and Chelyabinsk Regions, which are
a historical part of the Ural area, and Kurgan Region, located
in the Trans-Ural area, the Ural Federal District incorporates a
section of Western Siberia – Tyumen Region and the
autonomous districts that it contains.
• The autonomous districts are major oil & gas producers, and
their inclusion has greatly enhanced economic status of the
Ural Federal District, which ranks second after the Central
Federal District by gross regional product (GRP). In 2004, the
district accounted for 18% of aggregate GRP of Russian
regions, of which 13% (or almost three quarters) was due to
Tyumen Region.
Ural economic region
• Ural economic region has a diverse
and complex structure of machinery
and metal industries. Nationwide
importance have ferrous and
nonferrous metallurgy, mechanical
engineering, chemistry, mining of
minerals and natural gas, logging
and wood processing. The Ural
industry is characterized by the high
concentration of production around
certain areas, such as transport hubs,
close cooperation between different
branches and recycling of industrial
waste.
Ural economic region
Magnitogorsk
Iron and Steel
Works in the
1920s-30s.
• The timber production is concentrated in the
north and agriculture mostly in the south.
The areas of the Central Ural regions on the
both sides of the Ural Mountains
(Sverdlovsk, Nizhny Tagil, Chelyabinsk,
Magnitogorsk, Orsk) are dominated by
mining and processing of metals and
suburban agriculture. The basin of Kama
River (Berezniki, Solikamsk, Perm,
Krasnokamsk, Chaikovsky) has developed
chemical, timber and wood processing
industries, machine building and some areas
of agriculture (mostly potato, vegetable and
dairy products).
Ural economic region
• Metallurgical industry is one of the oldest in the region
and is based on the rich local deposits. Major
metalworking enterprises are Magnitogorsk Iron and Steel
Works, Nizhniy Tagil Iron and Steel
Works and Chelyabinsk Tube Rolling Plant. They process
ores not only from the Urals, but also from Kazakhstan
and the Kursk Magnetic Anomaly, whereas the coking
coal for their operation is brought
from Kuzbass and Karaganda coal basins.
• There are also many reconstructed historical plants. More
than half of the iron ore for metallurgy comes from
deposits of Magnitogorsk, Pervouralsk, Bakalsk
and Vysokogorsky Districts. It is used not only for
traditional metalworking, but there is also a large-scale
production of ferroalloys. A major mining plant was
opened near Kachkanar in 1963 to process the abundant
titanomagnetite ores of the region.
Ural economic region
• Ural economic region contains major
metallurgical and chemical enterprises of
Russia, such as Uralmash, Uralkhimmash,
Uralhydromash, etc. There are also major
machinery plants producing freight wagons
(Nizhny Tagil), cars and motorcycles
(Izhevsk, Ural Automotive Plant in Miass),
tractors (Chelyabinsk and Orsk), machinetools (in Chelyabinsk, Orenburg, Alapaevsk,
etc.). The chemical industry of the region is
focused on the production of basic chemicals
such as potassium and magnesium salts
(Berezniki, Solikamsk), fertilizers (Berezniki,
Solikamsk, Perm, Krasnouralsk, etc.), sulfuric
acid and sulfur, chlorine and its derivatives.
Ural economic region
• Developed is also production of Coke (fuel),
rubber, paint, synthetic fibers and yarns, plastics
and resins (Sverdlovsk, Nizhny Tagil, etc.),
alcohols (Orsk), as well as petrochemical industry
(Perm, Sverdlovsk, Orenburg). Ural is one of the
most important Russian mining and processing
regions of talc (Miass deposit), magnesite (Satka
field) and construction materials.
• In 1975, it produced 14.6 million tonnes of cement
and 6.8 million cubic meters of precast reinforced
concrete structures and components. About half of
the harvested timber is processed locally, in Perm,
Krasnokamsk, Tavda, Krasnovishersk and other
cities, mostly for paper (1 million tonnes in 1973),
sawn timber and plywood (213,000 m2 in 1973).
Unprocessed timber is floated down the Kama to
the Volga area.
Ural economic region
• There is significant mining of coal (in Kizelovsky,
Serovsky and Chelyabinsk areas), oil (Kama and
Orenburg areas), gas and peat, but it is not sufficient for
the industry and therefore Urals imports coal from the
Kuzbass and Karaganda, gas (from Western Siberia and
Central Asia) and oil. Refining centers are in Perm,
Krasnokamsk and Orsk. Orenburg is the center of gas
production and has one of Europe's largest gas condensate
deposits. Electricity is provided by a network of thermal
and hydroelectric power stations and by the Beloyarsk
Nuclear Power Station. The electrical network is
connected to the power grids of the Tyumen and Aktobe
regions and the central European parts of Russia.
Ural economic region
Food and agriculture
• The food industry of the Ural economic region specializes
in producing wheat, meat and dairy, mostly around the
major industrial centers. Most fields are located in southern
areas. The land division is as follows (all data below are
likely from 1970s): arable land 17.8 million hectares,
hayfields 2.9 million ha, pastures 7 million hectares. The
irrigated area is 128 hectares and 70 thousand hectares are
drained. The total sown area is 16.4 million ha, of which
10.9 million ha is used for grains, 4.9 million ha for fodder
crops, 0.1 million ha for technical sunflower and flax and
0.5 million ha for potatoes and vegetables. Grains are
dominated by the spring wheat (5.7 million hectares).
Greenhouse farming is well-developed in this region.
Livestock (1980s) was 3,900,000 cattle and 2,300,000 cows,
2,000,000 pigs, 4,600,000 sheep and goats, 34,600,000
items of poultry. Food and closes industries produce flour,
meat and dairy, leather and footwear, garment and textile.
There is a factory of linen (Sverdlovsk) and plants
producing synthetic silk (Orenburg, Chaikovsky).
Ural economic region
Bridge over
the Kama
River near
Perm
Transport
• Trains account for most transport in the region with
the operational length of railways about 10,000 km.
Most important railways are latitudinal, crossing the
Central and Southern Ural in six places: Nizhny Tagil
– Perm, Sverdlovsk – Perm, Sverdlovsk – Kazan,
Chelyabinsk – Ufa, Orsk – Orenburg and
Magnitogorsk – West Siberia. Because of the high
traffic density, most railways are electrified. The
region is crossed by several major pipelines supplying
and transporting natural gas from the Tyumen Oblast
and Central Asia and oil from Western Siberia. There
is industrial navigation on the Kama River. Major
cities have local and domestic airports, with the major
airline carrier being Ural Airlines.
Socio-economic indicators
• Being one of the most populated areas of Russia,
Ural economic region has a large Gross Domestic
Product (GDP), mostly due to the urban economic
activity. The GDP per capita is above the national
average, but the average monthly wages are lower
than those in the major central-Russian cities such
as Moscow and Saint Petersburg.
• The fraction of wages paid in full is below the
national average. Most industry is based on large
enterprises; their structure has not been affected
much by the privatization and reforms after the
collapse of the Soviet Union. The proportion of
employees in ex-Soviet enterprises in the Urals is
above the national average, while the proportion in
new private enterprises is well below average.
Case study
Despite the fact that 80% of the resources
are concentrated in Siberia, and it is not
always enough of workers, the region tend
to negative migration balance.
Why? Give your opinion on the current
situation.
Siberian economic
development
• One explanation may be considered raw material orientation of Siberian
economy. Since 19th century Siberia was seen as a source of raw materials
for the industrial areas of the country.
• Economic development has been focused precisely on natural resources.
Local industry, science and education also served the purpose of
strengthening the raw material orientation of the region, culture also played
a supporting role.
• The development of other aspects of life, not connected with the extraction
of raw materials, prevents the remoteness of the region from the center of
the country and in other countries, to establish cultural and business
contacts, share ideas, seek initiatives for the implementation of business
projects and non-commercial projects are very difficult and expensive. It is
easier to trade resources.
• Active ambitious and talented young people, feeling creative
overcrowding, leave their regions first in Novosibirsk and Tomsk, and then
- in Moscow, St. Petersburg and Europe.
West Siberian economic
region
Composition:
• Altai Krai (part of Siberian Federal District)
• Altai Republic (part of Siberian Federal District)
• Kemerovo Oblast (part of Siberian Federal
District)
• Khanty–Mansi Autonomous Okrug (part of Ural
Federal District)
• Novosibirsk Oblast (part of Siberian Federal
District)
• Omsk Oblast (part of Siberian Federal District)
• Tomsk Oblast (part of Siberian Federal District)
• Tyumen Oblast (part of Ural Federal District)
• Yamalo-Nenets Autonomous Okrug (part of Ural
Federal District)
West Siberian economic
region
• This vast plain—marshy and thinly populated in the
north, hilly in the south—is of growing economic
importance, mostly due to the abundance of natural
resources: oil, coal, wood, water. There are vast
oilfields in the West Siberian petroleum basin, and
Russia's largest oil refinery is in Omsk.
• The Kuznetsk Basin around Kemerovo and
Novokuznetsk is a center of coal mining, and the
production of iron, steel, machinery, and chemicals.
Logging is a significant industry throughout the
region. Hydroelectric stations dam the Ob near
Novosibirsk and Kamen-na-Obi. The navigable ObIrtysh watershed covers most of this area, and the
southern part is also criss-crossed by the TransSiberian, South Siberian and Turkestan-Siberian rail
lines. Agricultural products include wheat, rice, oats,
and sugar beets, and livestock is raised
Socio-economic indicators
• The official economic statistics give a positive profile
to this region. Not only is GDP in total high due to its
substantial total population, but also reported GDP per
capita is almost half above the Russian mean, as is
industrial productivity. In keeping with this, wage
levels are a third above the national average. However,
the likelihood of getting paid in full is 14% below the
national level. The region's economy is, moreover,
relatively low in privatized ex-state enterprises, and
only average in new private sector employment.
• Levels of social welfare are close to the national mean
in terms of life expectancy for men and women, and
the proportion of students in higher education.
However, popular attitudes in the region give a
negative picture of West Siberia. Compared to other
regions, people are much less likely to expect life to
improve, and are even more negative in their rating of
the national economy.
East Siberian economic
region
Composition:
• Buryat Republic
• Irkutsk Oblast
• Republic of Khakassia
• Krasnoyarsk Krai
• Tuva Republic
• Zabaykalsky Krai
East Siberian economic
region
• In this area of plateaus, mountains, and
river basins, the major cities Krasnoyarsk, Irkutsk, Ulan-Ude, and
Chita - are located along the TransSiberian Railroad. A branch line links
Ulan-Ude with Mongolia and Beijing,
China. There are hydroelectric stations at
Bratsk, Krasnoyarsk, and Irkutsk. Coal,
gold, graphite, iron ore, aluminum ore,
zinc, and lead are mined in the area, and
livestock is raised.
Socio-economic indicators
• This sparsely populated region
between Europe and Asia has high
wage levels and also a relatively large
portion of employees in the new
private sector. Productivity is also high
by Russian standards.
• It ranks especially low in the migration
of people into the region and
population change, and in the
expectation of life to improve and
evaluation of the national economy.
Far Eastern economic
region
Composition:
• Amur Oblast
• Chukotka Autonomous Okrug
• Jewish Autonomous Oblast
• Kamchatka Krai
• Khabarovsk Krai
• Magadan Oblast
• Primorsky Krai
• Sakha Republic
• Sakhalin Oblast
Far Eastern economic
region
• Bordering on the Pacific Ocean, the region has
Komsomolsk-on-Amur, Khabarovsk, Yakutsk,
and Vladivostok as its chief cities. Machinery is
produced, and lumbering, fishing, hunting, and
fur trapping are important. The Trans-Siberian
Railroad follows the Amur and Ussuri Rivers
and terminates at the port of Vladivostok.
Case study
• The population in the Central Federal District
is about 5% of Russia's total. What are the
economic and geographical problems it
creates? What measures are taken to reduce the
depopulation of the Far East, whether they are
justified and effective?