Resources and Power
Russia has enormous energy resources and significant deposits of many different minerals. Its coal reserves are particularly extensive. The biggest fields lie in remote and untapped areas of east Siberia and the far east; the bulk of current output comes from more southerly fields along the Trans-Siberian Railway. About three-fourths of Russia's coal is produced in Siberia, some two-fifths from the Kuznetsk Basin alone and the remainder from the Kansk-Achinsk, Cheremkhovo, and South Yakut basins and numerous smaller sources. The production of hard (anthracite) coal in European Russia takes place mainly in the eastern Donets Basin and, in the Arctic, in the Pechora Basin around Vorkuta.
Privatization of the coal industry began in the 1990s, and by the early twenty-first century some three-fifths of overall coal production was coming from privatized mines. However, the removal of state subsidies also forced the closure of many unprofitable mines. Mines in regions with access to substantial reserves of oil and natural gas largely survived.
Russia is among the world's leading producers of oil, extracting about one-fifth of the global total. It also is responsible for more than one-fourth of the world's total natural gas output. The great bulk of these oil and natural gas reserves comes from the huge fields that underlie the northern part of the west Siberia region, though another significant source is the Volga-Ural zone; the North Caucasus region, once the Soviet Union's leading producer, is now of little importance. Extensive pipeline systems link production sites with all regions of the country, with the neighbouring former Soviet republics, and with many European countries.
Electricity is generated by around 600 large thermal power plants and more than 100 hydroelectric stations, as well as several nuclear power plants. Most electricity production is fuelled by oil and gas. Nuclear power production expanded rapidly before development was checked by the Chernobyl accident in 1986. Much of Siberia's electricity output is transmitted to the European region of Russia along high- voltage lines.
Russia produces about one-sixth of the world's iron ore, mainly from the Kursk Magnetic Anomaly (central black earth region), the Kola Peninsula, the Urals, and Siberia. Although there is steel production in every economic region, the largest steel-producing plants are located mainly in the Urals, the central black earth region, and the Kuznetsk Basin. Non- ferrous metals are available in great variety from many districts, but by far the most important are those of the Ural region, which is Russia's main centre of non-ferrous metallurgy. Russia is also a major producer of cobalt, chrome, copper, gold, lead, manganese, nickel, platinum, tungsten, vanadium, and zinc. The country produces much of its aluminium from plants powered by the Siberian hydroelectric stations, but bauxite deposits are relatively meagre.
Chemicals
Because of the complex history of the development of the chemical industries and the great variety of raw materials involved, chemical manufacture is widely dispersed. As oil and gas input increased in the second half of the twentieth century, new chemical plants were built, particularly in regions served by pipelines, which helped to reduce dependence on traditional resources. Chemical industries requiring large quantities of electric power, such as those based on cellulose, are particularly important in Siberia, where both timber and electricity are plentiful. Overall, Russia's chemical industry lags in scale and diversity compared with those of the United States, Canada, China, and the countries of the European Union.
Heavy and Light Industry
Russia's machine-building industry provides most of the country's needs, from steam boilers and turbines to consumer durables and automation components. Durable consumer goods are produced primarily in areas with a tradition of skilled industry, notably in and around Moscow and St Petersburg, Russia's factories also produce armaments, which are sold to many countries and contribute significantly to Russia's export income. Textile industries are heavily concentrated in European Russia, which produces a large share of the country's clothing and footwear.
Transport and Telecommunications
Russia's vast size and the great distances that often separate sources of raw materials and foodstuffs from consumers place a heavy burden on the transport system. One result has been the continuing dominance of the railways, which account for about nine-tenths of the country's freight turnover (three-fifths if pipelines are included) and half of all passenger movement. Nevertheless, the rail network is a very open one, and its density varies regionally: that of European Russia is nearly seven times as dense as that found in the Asian portion of the country. Indeed, east of the Urals the term "network" is a misnomer, since the system consists of only a few major trunk routes (e.g., the Trans-Siberian Railway and Baikal-Amur Main Line) with feeder branches to sites of economic importance. The railways are owned and run by a joint-stock company controlled by the state. Much of the country's rolling stock is obsolete.
Apart from highways linking the major cities of European Russia, the road system is underdeveloped and carries only a tiny fraction of all freight. The private motor car became a symbol of middle-class status in the post-Soviet years, but the percentage of people owning vehicles is still quite small. Inland waterways carry a much larger volume than roads. Although the greatest volume is carried on the Volga system, river transport is most vital in areas devoid of railways. In addition to its vital role in foreign trade, maritime transport has some importance in linking the various regions of Russia, particularly those that face the Arctic seaboard. Traffic on the Arctic Ocean route is seasonal.
Air transport plays an increasingly important role. Russian airlines carry only a minute fraction of all freight, chiefly high- value items to and from the remote parts of Siberia, where aircraft are sometimes the only means of transport. Airlines are responsible for nearly one-fifth of all passenger movement. Aeroflot (renamed Aeroflot-Russian Airlines in June 2000), formerly the state airline of the Soviet Union, is the country's largest air carrier; the Russian government retains majority ownership. Most major cities have services to international or domestic locations.
The Russian telecommunications sector is inferior to those of other industrialized countries. For example, in the early 1990s only about one-third of the country's households had a telephone. But the country's infrastructure in this respect has been greatly improved, largely through foreign investment. In 1997 the State Committee on Communications and Informatics was set up to regulate telecommunications policies, oversee the liberalization of the sector, and encourage competition; by the beginning of the twenty-first century, there were more than 1,000 telecommunications companies. Nevertheless, several large companies, such as Svyazinvest and Ros- telekom, control much of the industry. Internet use in Russia grew very slowly in the 1990s, particularly outside the major urban areas, but it has since grown fairly steadily.
Finance
Russia's monetary unit is the ruble, which is now freely convertible, a radical departure from the practice of artificial exchange rates and rigid restrictions that existed during the Soviet era. The Russian Central Bank (RCB), which took over the functions of the Soviet-era Gosbank, is exclusively responsible for regulating the country's monetary system. The bank's primary function is to protect and stabilize the ruble, which it attempts to do through its control of foreign exchange. The constitution adopted in 1993 gives the RCB greater independence from the central government than the Gosbank had enjoyed, but its head is appointed by the president and subject to approval by the State Duma, the lower house of the Russian legislature. In 1995 the RCB was granted the authority to oversee all banking transactions, set exchange- rate policies, license banks, and service the country's debt. To maintain its hard-currency reserves, the RCB relies on the obligation of all exporters to convert half their hard-currency earnings into rubles. The RCB supervises and inspects the country's commercial banks.