Economy of Russia

By | August 26, 2022

Russia concentrated the decisive potential of the former Soviet Union. Its enormous energy and other mineral resources ensured the supply of energy and raw materials to the industrial and other sectors of all other union republics and Eastern Europe.

However, the vast area of ​​the country and unfavorable natural conditions have always represented a major obstacle to development. Despite its ambitious and generous agricultural programs, Russia still has to import food, and its antiquated industry cannot compete well with the advanced technologies of advanced industrial nations.


Despite its vast area, Russia’s agriculture has relatively limited agroclimatic resources. Arable land occupies only 8%, meadows and pastures another 5% of the area. The vast majority of arable land is located in the southern regions of the European part of Russia. Plant production is of lesser importance and its production is not able to ensure enough cereals for own needs. The most important crop is wheat (4th place in the world), significant is the production of barley, rye and oats, less corn. Russia is still the world’s largest producer of potatoes. Of the technical crops, the cultivation of sunflower, sugar beet and flax is the most important. Stocks of livestock (cattle, pigs, poultry and sheep) are among the highest in the world, but productivity is low and production has been declining in recent years. Despite major changes in the collective farm, the state farm sector still manages about half of the agricultural land.

According to thedressexplorer, the Russian fishing fleet, which operates from the polar waters to the Pacific Ocean, is one of the largest in the world, and Russia also ranks among the leaders in fish production. Russia also has the largest timber reserves in the world. Coniferous trees clearly dominate, with larches in first place.


The backbone of the Russian economy is heavy industry, processing the vast amount of raw materials that the country provides. The most important from the point of view of the functioning of the entire economy is the extraction of energy raw materials, the export of which is a decisive source of income. Next to the Persian Gulf region, northwestern Siberia has the world’s largest reserves of oil and natural gas. Oil is further extracted between the Volga and the Urals (Tatarstan), in the North Caucasus and Sakhalin Island. The reserves of black and brown coal are also the largest in central and eastern Siberia (Yakutia), in the Kuznetsk and Kansko-Achinsk basins. The largest deposits of natural gasthey are in the north of the West Siberian Plain near the Arctic Circle and on the Yamal Peninsula. The problem is the extraction of fuels in extreme conditions, in places beyond the Arctic Circle, large losses during extraction and severe damage to the environment. A major drop in oil production is causing concern. There are also large reserves of iron ore, especially in the area of ​​the Kursk magnetic anomaly near the border with Ukraine and in southern Siberia. Most of the ores of non-ferrous metals can be found in the Urals, but the deposits of some are already largely exhausted. Gold mining in Eastern Siberia and the Far East is very important, the production of nickel (Norisk, Kola Peninsula), copper (Ural), bauxite (Ural, Eastern Siberia), polymetallic ores (Kuzbas and Ural), tungsten is globally important (southern Siberia), tin (Transbaikalia) and platinum (Urals, Siberia), from non-ore raw materials asbestos, apatites (Kola Peninsula), diamonds (Yakutia), potassium salts, mica and solid.

The reserves of water energy are enormous. The largest hydropower plants are on the Yenisei, Angara and Volga rivers. There is a lack of funds for the construction of others. The nuclear power plant construction program was suspended in 1986 when a reactor explosion in Chernobyl, Ukraine exposed safety weaknesses in a number of facilities.

Under the Soviet system, Russia provided a decisive part of the industrial production and needs of the whole union. It was characterized by the predominance of heavy industries, very demanding in terms of materials and energy, focused on the production of means of production, the production of consumer goods was of secondary importance. This is also one of the reasons for the large decline in industrial production, for which there is currently no demand. Only the most advanced technical products such as aircraft, some types of weapons, possibly other means of transport and machinery equipped with microprocessor technology can be competitive on world markets.

Transport and communication

Transport in the conditions of Russia, i.e. above all the huge distances between places of production (raw materials and food) and consumption, plays an extraordinary importance. After the destruction of central planning and the collapse of the USSR, transport became one of the weakest points that threaten economic transformation. It often happens that even food that must be imported in significant volumes spoils in warehouses or during transport, before it reaches the consumer.

The basis of Russian transport is the railway system, which serves the transport of goods over long distances and achieves, despite its great decline, still the largest performances in the world. Rail transport is developed primarily in the European part with a radial network of tracks leading from Moscow to all important centers of Russia and nearby countries. Rail transport is even more important for the connection of the European part with Siberia and the Far East, which is already provided by the doubled Siberian highway along its entire length. Its northern branch – the Baikal-Amur highway (BAM), built at huge costs, is not fully utilized.

Road transport transports much more cargo, but only over short distances, so performance is comparable to rail transport. The road network is extensive, but there are relatively few really high-quality roads. Automobilization is low, but the number of passenger cars is increasing rapidly (passenger manufacturing is the only growing sector). Inexpensive transport of goods on rivers, especially on the Volga and Siberian rivers, retains its importance. Pipeline transport, which transports the vast majority of oil and natural gas from Western Siberia to Central Europe, is very extensive.

Foreign trade is mostly carried out by a proven merchant fleet. In the far north and east, maritime transport is often the only link between communities scattered along some 50,000 km of coastline. Some ports freeze in winter, others, such as Murmansk, operate all year round. The largest ports are Novorossiysk on the Black Sea, St. Petersburg on the Baltic and Nachodka in the Far East. The airline network was the longest in the world. With the rise in fuel and air ticket prices, traffic has fallen sharply. However, it still represents the only type of connection for numerous areas.

Healthcare, social care and education

Under the Soviet regime, medical care was free and widely available throughout the Russian Federation, yet, for example, life expectancy was very low, especially for men. The standard of living of the inhabitants was not high, the living conditions were very bad. On the other hand, there was virtually no unemployment. The collapse of the Soviet system caused chaos in the old welfare network. Russia is now facing the same problems as many developing countries: high inflation, unemployment and a sharp rise in crime.

Hyperinflation in the early 1990s caused a sharp decline in living standards, and more and more Russians find themselves living below the subsistence minimum. The antiquated machinery of the welfare system has to contend with a huge increase in the homeless, refugees and impoverished people, and now the unemployed. Infant mortality is also increasing, the health and psychological condition of the population is deteriorating, and the increase in alcoholism and suicide is extreme.

Economy of Russia