Infrastructure and Services

After industry and agriculture, the service sector is the next step in our survey of post-Soviet economic geography. In the developed countries of the West, services account for over 60% of the gross domestic product (GDP), because with high productivity and mechanization fewer people are needed for production in industry and agriculture. In Russia's case, the sector accounts for a little less (58% in 2008), but it is nevertheless the biggest sector of the economy. In Tajikistan, however, it is merely 50%. Only 15 years ago, the service sector constituted under 30% of Russia's economy. The explosive growth in services was caused both by the relative decline of industry and agriculture as a result of economic restructuring, and also by the genuine increase in many services as the demand for those soared.

“Services” is a diverse category, and economists disagree on what exactly should be included in them. Generally speaking, services are nonmaterial elements of an economy (e.g., health care, banking, information, housing, law enforcement, and education). Some aspects of Russia's service sector have already been covered in Chapter 15. I have chosen to include infrastructure along with services in this chapter, although it could also have been included in chapter 18 on heavy industry. For example, transportation of people and goods is both a service and a production process. Other services highlighted in this chapter include information and leisure services.

The service sector was greatly underdeveloped in the Soviet Union, because the government always gave the highest priority to heavy industry. Although mass transit was well developed, other services lagged far behind Western norms. After World War II only 10% of all workers were in the service sector, and by 1990 only 25%, as compared to over 70% in the United States at that time. Clearly, recent years have seen a massive increase in the relative importance of services, with Russia's emergence as a new consumer society. This chapter begins, however, with the most tangible, material form of services—transportation.

Transport Near and Far

High-Tech Russia

Retail and Leisure Services

Questions

  1. Why do you think intercity train and bus service are so underdeveloped in the United States? Why are they so well developed in Russia and other FSU republics?
  2. If you had a chance to travel from Moscow to Vladivostok, what mode of transportation would you choose? Explain your choice. What if you had to travel from St. Petersburg to Murmansk? From Kazan to Sochi? From Moscow to Almaty?
  3. Which of the following countries is likely to have the fewest fitness clubs per capita: Russia, Ukraine, Armenia, or Tajikistan? Explain your rationale.
  4. Which countries of the FSU would be most attractive to large retailers from the United States? Explain your choice.

Exercises

  1. Look at the map of pipelines in Chapter 17. Propose three alternative routes for exporting Russian oil and gas to East Asia, and two to Western Europe, to the ones that are currently being used. Propose three priority routes for high-speed train development in the FSU. Use the map of existing train routes, a population map, and any other maps that may help guide your decision. Defend your plan in a class presentation.
  2. Research any combination of airlines available to you to travel from your nearest metropolitan area to Moscow, St. Petersburg, Kiev, Yerevan, Astana, and Bishkek. How many options involve a carrier from the FSU? How many involve only major Western airlines? What are the price differences? Which option would you choose if you had to travel yourself? Why? Do a quick search on the numbers of Internet pages in your country. Compare them to the numbers in Russia.
  3. What are other common non-English Internet languages?
  4. Make a list of all types of leisure services available in your city or town. Which of these would you expect to find in Russia? Which ones would you not expect to find? Why might this be the case?