How Geographic Realities Keep Russia's Economy Behind
Two Russian-dominated multinational empires succeeded one another on the same territory, the first being called candidly the Russian Empire and the second the Soviet Union. Geographically, Russia is in some ways like the rest of Eastern Europe, but its natural resource endowment is far richer. Like some other Slavic lands, Russia has vast plains; indeed, the largest area of level land in the world, and the Ural Mountains, which mark the boundary between Europe and Asia, are modest in height, like the mountains of the rest of Eastern Europe.
The sheer physical size of the Russian Empire and of the Soviet Union that succeeded it has had enormous consequences. The largest country in the world, the Soviet Union was more than twice the size of the United States and larger than the entire continent of South America. The European portion of the Union of Soviet Socialist Republics constituted more than half of all Europe, even though it was only one quarter of the total land area of the USSR. Such vast regions encompassed a wide variety of geographic and climatic environments and great natural resources.
However, the distances involved created high transportation costs, especially since most of these resources, including waterways, were in the Asian portion of the country, while most of the population was in the European portion. A 1977 study, for example, showed that 90% of the energy resources of the Soviet Union were east of the Urals, while nearly 80% of the country's energy requirements were in the European part of the USSR.
While there are many rivers in Russia, containing altogether 1/10th of the total river flow in the world, the practical economic value of these rivers is limited. The largest are by no means the most economically important. Many Russian rivers flow northward into the Arctic Ocean or flow elsewhere into inland seas, rather than serving as outlets to the great ocean trade routes of the world. More than three-fifths of their drainage is into the Arctic Ocean.
Russia's most famous river, the Volga, is by no means its largest; the NSA and the Lena each carry more than twice as much water. But the Volga's importance derives from the fact that it flows through regions of Russia containing 3/4 of the country's population and four-fifths of its industry and farmland. It is the longest river in Europe. Not surprisingly, the Volga has carried more shipping tonnage than any other Russian river or any river in the former Soviet Union.
Russian rivers are often frozen for months each winter, reducing their economic significance still further. Even the role of the Volga is reduced by the fact that it typically freezes before December in the vicinity of Moscow and remains frozen until mid-April. At its southern end, the Volga flows into an inland sea, the Caspian Sea.
Like so many other Russian rivers, in natural resources, Russia stands out among the nations of Eastern Europe and of the world. In addition to having the world's largest reserves of iron ore and 1/4 of all the forested land in the world, the manganese deposits of the Soviet Union have been estimated to exceed those of every other nation except South Africa, and its actual manganese production in 1980 exceeded that of any other nation by at least double.
The Soviet Union also led all nations in oil production for many years, producing from 10% to 20% of total world output. It has also had one-third of the world's natural gas reserves and was for many years the world's leading producer of nickel. The USSR was self-sufficient in virtually all natural resources and exported substantial amounts of gold and diamonds. As of 1978, the USSR supplied nearly half of the industrial diamonds in the world.
Yet all this natural abundance did not translate into a high standard of living for the Russian people or for the other peoples of the Russian Empire, the Soviet Union, or the Commonwealth of Independent States which succeeded them. Partly, this reflected the high costs of extraction and transportation in a vast country without a network of waterways connecting the resources with the population centers.
The enormously costly Trans-Siberian Railroad was built in hopes of making up for the lack of natural transportation routes between the resources in Asiatic Russia and the industry and population centers of European Russia. For much of the country's history, there was also a lack of human capital among a largely illiterate population. As late as 1897, only 21% of the population of the Russian Empire was literate.
But even after education spread and an abundance of scientists and engineers were trained during the Communist era, the government's emphasis on military uses of its resources kept living standards low. However, the de-emphasis of the military in the post-Soviet era did not prevent the continued and sometimes worsening poverty in the region, a fact which highlighted the political and legal obstacles to economic development that may well have played a major role all along in the country's backwardness under tsars, commissars, and then democratically elected governments.