Russia –Potential

Export from Russia – a challenge

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Introduction• Russian Exports includes Russia, Belarus, Ukraine,

Georgia, and Armenia (all were part of the U.S.S.R.)• Russia is the largest country (in land area) on Earth; it was

spans 11 time zones– Rich in resources, but has one of the harshest climates

• The Russian Industry has had extremely rapid political and economic change since 1990

• Exports s are substantial contributors to national economies through employment generation and contribution

• to GDP. The role of Exports , including those operating in the informal economy, in employment creation

• approximately 45%-60% of GDP regardless of the development stage of the economy.

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Agricultural Regions (Fig. 9.5)

Agricultural Triangle(Developed Triangle)

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Environmental Geography: A Vast and Challenging Land (cont.)

• The Russian Far East– Near Vladivostok, about same latitude as New England (in N. America)– Longer growing seasons and milder climates than Siberia, seismically

active– Ussuri and Amur River Valleys have mixed crop and livestock farming– Vegetation includes conifers, taiga, Asian hardwoods

• The Caucasus and Transcaucasia– In extreme south of European Russia, forms Russia’s southern

boundary, between the Black and Caspian seas– Highest peak is Mt. Elbrus (18,000 feet)– Georgia and Armenia are in Transcaucasia; Lesser Caucasus Mountains

form border between Armenia and Azerbaijan– Climate: high rainfall in west, arid or semi-arid in east; good soils and

farming

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Population Density

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– Soviet industry more successful than agriculture• Soviets added major industrial zones (Fig. 9.31), many

near energy sources and metals• Moscow had fewer raw materials, but had some of

Russia’s best infrastructure, large pool of skilled labor, and demand for industrial products

– Soviets developed a good transportation and communication infrastructure

– Soviets had a massive housing campaign in the 1960s

– Soviets made literacy virtually universal, and health care readily available; eliminated the worst of the poverty

Russian Export Breakdown by Product, 2011• Code Commodity group• 3310 Crude and partially refined oil 96675 41.8 41.8• 3411 Natural gas 43228 18.7 60.4• 6841 Aluminum and its alloys, unprocessed 6412 2.8 63.2• 6831 Nickel and its alloys, unprocessed 5906 2.6 65.7• 6725 Iron balls, billets, slabs etc. 5421 2.3 68.1• 3214 Coal (antracite, bitumen) 4341 1.9 70.0• 6822 Nickel and its alloys, processed 2801 1.2 71.2• 2422 Bolt timber, scale wood 2520 1.1 72.3• 2432 Sawn logs, unhewn timber 2265 1.0 73.2• 6727 Rolled steel and iron for the rerolling 2245 1.0 74.2• 2820 Iron and steel scrap 2031 0.9 75.1• 6672 Raw diamonds, not technical 1718 0.7 75.8• 6821 Copper and its alloys, unworked 1671 0.7 76.5• 5611 Nitrogen-containing fertilizers 1510 0.7 77.2• 6712 Pig Iron 1456 0.6 77.8• 410 Wheat, whole 1368 0.6 78.4• 5619 Fertilizers 1364 0.6 79.0• 6742 Steel and iron sheets (thickness 3–475 mm) 1316 0.6 79.6• 6743 Steel and iron sheets (thickness less 3 mm) 1306 0.6 80.1• Fig. 2. nations competing in international trade and investment

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• The Post-Soviet Economy• The region has replaced its communist system with a

mix of state-run operations and private enterprise

– Redefining Regional Economic Ties• Independent republics negotiate for needed resources

with Russia and each other rather than accept centralized control

• Russia continues to dominate the region’s economy

– Privatization and Economic Uncertainty• Russia removed price controls in 1992; sold state-owned

business to private investors in 1993– Higher prices, lack of legal safeguards created problems

• Agriculture still struggles, in part due to harsh climate, landforms

• Many people see little economic gain from changes

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Major Natural Resources and Industrial Zones (Fig. 9.30)

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– The Russian Private Sectors • Russia Industry Ministry estimates that Russian

private sectors controls 40% of the private economy & 60% of the state-run enterprises; 80% of banks in Russia may be under mafia influence

– Protection money, corruption result

• Russian has gone global .

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Problems

Infrastructure Road,Rails ,Sea port ,Air• - weather condition • Distance factors from Port • Modernization Logistics costs in different countries of the world and

Russia, 2009, % of GDP• Germany Japan France U.S.A. Italy India Brazil China Russia• Sources: Armstrong & Associates Inc., RBC.research• Logistics outsourcing in Russia (value of cargo transportation, for

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• Growing Economic Globalization – Starting in 1970s, Soviets exported fossil fuels,

imported food; ties now stronger– A New Day for the Consumer

• Western consumer goods available (e.g., McDonald’s, Calvin Klein; even some luxury items)

– Attracting Foreign Investment• Region struggles to attract foreign investment • Most investment from U.S., western Europe (esp.

Germany, U.K.)– Fossil fuels, food, telecommunications, consumer

goods– Foreign investment growing by more than 14%

annually

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– Globalization and Russia’s Petroleum Economy• Russia has 35% of the world’s natural gas reserves

– Mostly in Siberia– World’s largest gas exporter

• Primary destination for Russian petroleum products is western Europe

– Former U.S.S.R. republics depend on Russia’s energy– Foreign investment in new pipelines, other technology

– Local impacts of globalization• Vary from place to place

– Investment in Moscow, Siberia (oil)– Pro-business Nizhny Novgorod and Samara attract investment– Local economic declines in older, uncompetitive industrial areas

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Conclusions• Russian Export has seen great change, from empire,

through revolution and break-up

• Ethnic & cultural differences continue to shape the region

• Russian is rich in natural resources, but has limited agricultural potential and lingering economic difficulties

• Massive readjustments growing from the political and economic upheavals of the 1990s continue to affect the area

• Environmental devastation in the region and its effects continue to cause social and health problems

• More uncertainty lies ahead for the people of the Russian Domain.