Geography Chapter 16: Russian Economy

Soviet Command Economy The Communist leaders controlled every aspect of the Economy of the USSR. The Gov. owned Banks, Factories, Farms and Transportation. Individuals could not make economic decisions. Unemployment was almost 0%, but low wages were common. Very few consumer goods produced. Price Controls. Black Market and Smuggling were common. Limited Technology for the consumers.

Soviet Market Economy 1985 Mikhail Gorbachev began moving toward a Market Economy. Market Economy - Businesses privately owned. Less Gov. control. Changes after 1991 Privatization - change to private ownership from state-owned companies. Problems- many Russians spent their $ on foreign investments. This didn’t help the average Russian. Weak Banking system, Foreign Debt, Corruption also hurt Russia’s transition.

Then and Now: Economic Activities Agriculture - During the Soviet Era farmers were organized into State-owned Farms. The Gov. controlled all aspects. What was grown, the prices, the wages earned. 2 Types of Farms (During the USSR Era) Kolkhozes - Farmers shared in the profits earned by the farm. Sovkhozes - Farmers work on Farm and earn wages. After Restructuring brings new opportunities and problems. Most farmers could not afford to buy land. Many farms continued to operate under the old system. Today - Many farmers have purchased land of their own.

Then and Now: Economic Activities Transportation Distances and Climate are serious barriers. Siberian roads can be impassable much of the year. Russians rely on Railroads for Travel and Freight. Also, River shipping during the summer. Pipelines- carry most of Russia’s Fuel. Communication Since 1991, Telecommunications have boomed, but only 25% of Russians now have Cell Phones and only 16% use the Internet. (World average is only 21 %)

Then and Now: Economic Activities Industry - Soviet Era- Gov. controlled all Industrial production. After Privatization of Industry. Did production increase? See chart pg After an initial drop, things are increasing. Privatization takes time to show results. Trade Russia has vast energy resources. 53% of Russian trade is energy related, most going to China and Japan. Russian trade was very restricted during Soviet Era. Today- trade is expanding.

Human Impact on Russian Environment The Russians have not been very concerned about protecting the Environment. (Until recently.) The Soviets Gov. demanded Industrial Production and the environment was ignored.

Nuclear Weapons/Waste Nuclear Weapons Soviets detonated 600 nuclear bombs. They also built 30,000 nuclear Warheads. Today - concern for the safety of these weapons is a concern for the entire world. Nuclear Waste- is a product of the weapons building process and from Nuclear Power Plants. Radioactive materials have been dumped into the oceans and buried around Russia.

Chernobyl A fire/explosion is a Nuclear Power Plant released tons of radioactive particles into the atmosphere. (400 times more than Hiroshima) Millions of Russians were exposed. 64 deaths (Many thousands more died due to cancer) This accident forced Russia to re-think its nuclear power industry.

Pollution Water Pollution Soviet industry dumped waste into rivers and oceans for decades. (Lake Baikal- paper pulp waste dumped into lake for years) Soil and Air Pollution Pesticides and Chemical Spills, pipeline leaks, etc. These contributed to pollution of soil and air.

Today Russians are becoming more aware of the damage they have caused. Reforestation, Fishing restrictions, limits on industrial pollutants, etc. are helping repair the damage.