comparative economic development essay

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Journal of Economic Literature

• September 2018

The Macrogenoeconomics of Comparative Development

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Essay of Comparative economic dev.t in developing and developed nations final

An essay of Comparative Economic Development of Developing and Developed Countries

This essay paper compares, examine and analyzing of the similarities and difference in growth and development among current stage of developing countries and early-stage developed countries to develop a balanced understanding of growth and development model and its strategies to overcome the challenges. Economic growth and development of the global economy were compared and defined. Today’s developing an early stage of developed countries communities and difference clearly existed. To get best practice, the current developing country should not be compared to the recent level of development activity and result rather than comparing their beginning or early initial stage of growth path to up to date. The developing and developed nations are convergence in their development level and their human development result needs to measure by human development index.

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The Macrogenoeconomics of Comparative Development

The importance of evolutionary forces for comparative economic performance across societies has been the focus of a vibrant literature, highlighting the roles played by the Neolithic Revolution and the prehistoric “out of Africa” migration of anatomically modern humans in generating worldwide variations in the composition of human traits. This essay provides an overview of the literature on the macrogenoeconomics of comparative development, underscoring the significance of evolutionary processes and of human population diversity in generating differential paths of economic development across societies. Furthermore, it examines the contribution of a recent hypothesis set forth by Nicholas Wade, regarding the evolutionary origins of comparative development, to this important line of research.

We are grateful to Omer Moav, Ömer Özak, and especially the editor, Steven Durlauf, for helpful comments. Greg Casey and Matthew Jang provided superlative research assistance. Ashraf acknowledges research support from the NSF (SES‐1338738), the Hellman Fellows Program, and the Oakley Center for Humanities and Social Sciences at Williams College. Galor acknowledges research support from the NSF (SES‐1338426) and the Population Studies and Training Center (PSTC) at Brown University. The PSTC receives core support from the Eunice Kennedy Shriver National Institute of Child Health and Human Development (5R24HD041020). We are responsible for any errors. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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Australia and Argentina: On Parallel Paths Argentina and Australia: Essays in Comparative Economic Development

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D. C. M. Platt; Australia and Argentina: On Parallel Paths Argentina and Australia: Essays in Comparative Economic Development. Hispanic American Historical Review 1 May 1986; 66 (2): 353–355. doi: https://doi.org/10.1215/00182168-66.2.353

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Australia and Argentina: On Parallel Paths , distinguished by its clarity and by its forthright, authoritative argument, is the work of a full-time academic, John Fogarty, and of his former student, Tim Duncan, scholar/journalist. We need to be reminded from time to time that Fogarty’s latest book is not intended primarily for an academic audience nor for the information of readers in the Northern Hemisphere. Both Fogarty and Duncan are Australians who have distinguished themselves by their intimate knowledge of (and sympathy for) Argentina. They are writing not for us but for Australians and Argentines; they are explaining matters between themselves, in the South.

One of the great virtues of Australia and Argentina is the powerful defense and rationalization that it provides for the employment of comparison in history, a defense, however, that does not disguise the method’s weaknesses. But the book is valuable, above all, for the stereotypes it attacks and destroys. Even to the Argentines themselves, Australia has often represented some kind of paradise of Anglo-Saxon entrepreneurial ingenuity. Yet as the authors explain, the historical record of the two countries, from the late nineteenth century to the Second World War, shows Argentina performing consistently above Australia at comparable levels of economic activity. Australia drew ahead of Argentina only in the 1950s, and has drawn ahead again since the late 1960s.

Duncan and Fogarty give us a short, straightforward account of both economies, starting from their origins in the early nineteenth century, and taking us almost to the present day. But the focus is recent, and the authors point primarily to the change of direction towards politically enforced industrialization at the expense of primary production; at the damage this has done to Argentina; and at the anxiety they themselves feel that such a bêtise should be permitted to strike deep roots in their own country, Australia. Their book is an attack on the unreflecting dogma of import-substituting industrialization, on nationalist rhetoric, and on the single-minded pursuit of national self-sufficiency. Their objections, as Australians, are sufficiently shown in their later chapter headings: “Killing the Goose,” “Down the Argentine Track,” and, finally, “Lessons for Australia.”

What went wrong for the Argentine economy? The Duncan and Fogarty answer is that ideology’s power over policy making in Argentina was fundamental to Argentine experience. Argentina has been the victim of a standing dilemma—resources cannot, for political reasons, be transferred from the urban sector to the rural sector, and without such transfer (and the improvement of rural productivity that must follow), Argentina has not escaped from economic decay. We are not supposed, as Northerners, to say such things ourselves, but Southerners, talking to Southerners, cannot be accused of displaying a spirit of European elitism. In any case, Australia has experienced similar phenomena in a different way: it has found itself caught in a trap of political rhetoric, and has experienced difficulty in ridding its economy of the “distortions of unwise protection.” The problem, after all, is rather of politics than economics. Australia and Argentina: On Parallel Paths is a wise book, intelligent and thoughtful.

Argentina and Australia: Essays in Comparative Economic Development is published as Occasional Paper 1 for the Economic History Society of Australia and New Zealand. It is derived from the papers given at a symposium on “Comparative Economic Development” at the University of Melbourne in May 1982. Like Fogarty’s work over the years, this short collection shows the worth of comparative studies in regions of recent development—more enlightening, perhaps, than the blinkered approach that we tend to make to conventional area studies. Area studies, as we so often find, must comprehend diverse and irreconcilable elements—Argentina and Peru, for example—when we might more properly have been studying, at least among economic historians, the historical experience of Argentina, Canada, and Australia. Are we on the wrong track? Have area studies—Latin Americanists, Africanists, Middle Easternists, Asianists, researchers into Britain’s former Dominions—lived their day and, like Pippa, passed? Should we now, more realistically, consider a shadowy, historical line that stretches from Latin America (Chile, Argentina, Uruguay, Southern Brazil) to parts of Southern Africa, Australia, and New Zealand with Canada appearing far up North (but nearer to God) as the joker in the pack? Among the contributors to Argentina and Australia (surprise, surprise!) are Fogarty and Duncan, with big guns firing from Kenneth Boulding and C. B. Schedvin. The focus is again on the twentieth century, and long overdue, since the preoccupation of scholars in regions of recent settlement has almost always until now been with the decades leading up to the First World War. The four papers, all impressive, are Boulding’s “Internal and External Influences on Development,” Fogarty comparing the role of the export sector in both Australian and Argentine industrialization, Duncan on the different political experience, and Schedvin in pursuit of national response to instability and industrialization in Argentina and Australia, from 1930 to 1960. This occasional paper is a promising development, and the ideas it expresses deserve to be pursued. “Area-centrics,” beware.

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Comparative Economic Studies and Comparative Economics: Six Decades and Counting

• Published: 29 October 2018
• Volume 60 , pages 638–656, ( 2018 )

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• Josef C. Brada 1 , 2 &
• Paul Wachtel   ORCID: orcid.org/0000-0002-5325-2610 3  

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This paper reviews the history of Comparative Economic Studies and the role that it has played in the development of the field of comparative economics. While we emphasize developments in the past 10 years when we served as co-editors, the development of the journal and of the field of comparative economics is placed in the context of the entire 60-year history of Comparative Economic Studies and of its predecessors.

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Conclusion: So, What Is Comparative Economics Now?

Introduction to the palgrave handbook of comparative economics.

Cross-National Comparative Research—Analytical Strategies, Results, and Explanations

At the time Hardt was Editor of the ASTE Bulletin , he was employed by the Research Analysis Corporation and affiliated with the Institute for Sino Soviet Studies at George Washington University. He subsequently joined the US Congressional Research Service and continued and greatly expanded the publication program on the analysis of the Soviet economy for the Joint Economic Committee (JEC) of the United States Congress. These JEC compendia, popularly known as “The Green Books” because of their green covers, compiled analytical papers by leading specialists on the Soviet economy. Hardt selected the contributors, edited the submitted papers and expanded the publication program to include compendia on Eastern Europe and on China on a rotating 3-year basis. These compendia served as invaluable and authoritative resources for the study of these economies.

One of these compendia was the genesis of the first publication of an article in the ACES Bulletin by an “official” researcher from the Soviet bloc, when Mihaly Simai, head of the Hungarian Institute for World Economy, wrote a survey article on one of the compendia on Eastern Europe (Simai 1978 ).

Eddie and Wright ( 1969 ) is a good example of such an article, and it clearly shows the limited access that members of ASTE, and Western scholars in general, had to the “Soviet-type” economies. There were also language barriers that the ASTE Bulletin tried to address, as for example in Grossman ( 1969 ) or Treml ( 1971 ).

The measurement of Soviet aggregate output and of Soviet defense expenditures was of considerable interest to policy makers as well as to academics and also something of a point of disagreement between the latter and government analysts, especially those from the CIA.

It may be that Sovietology did not seem a sufficiently scientific name for the research agenda being pursued at the time and during the years that followed, and comparative economics was seen as a more dignified name, comparable to development economics, labor economics, monetary economics, etc. In fairness, it may also be that, because very little was known about the Soviet economic system while the market economy was thought to be well understood, any information about the workings of the Soviet-type economy could then easily be compared to the capitalist market economy.

Despite this “great leap forward” for the Bulletin , the Editors were cautions, writing in their preface to this issue that the “… new format of the BULLETIN (to be continued for this year at least) provides more space than we have had in the past and we hope that this collection will elicit further contributions….”.

At the end of his remarks about the two journals, Holzman said something to the effect that anyone interested in editing the Bulletin should talk to him at the end of the Membership Meeting. With no intention of applying for the position but wanting to say hello to my former teacher, I walked up Frank, who looked up from his notes and said “What? Brada, you want to be the Editor of the Bulletin ?” Completely nonplussed, I was too tongue-tied to decline.

In addition to his pioneering contributions to comparative economics, Montias also made perhaps even greater contributions to the field of art history. He taught himself Dutch and how to read old Dutch handwriting and undertook archival research in Holland on Vermeer and his contemporaries. He published several books on the subject, and his research fundamentally altered the field of art history and our understanding of Vermeer. He received numerous prizes and awards for his work, and his book on Vermeer provided valuable information for the book and, later, the film, Girl with a Pearl Earring .

The Bulletin was sent to ACES members for free, but subscriptions by libraries and other institutions formed a large part of the Association’s income for many years. Digital copies of the journal from 1977 on are available at http://web.a.ebscohost.com.ezproxy1.lib.asu.edu/ehost/search/advanced?vid=4&sid=15c3922c-077e-4238-bab9-a54da57a8d70%40sessionmgr4009 . Previous issues are available only in hard copy, either at major research libraries or from the Association for Comparative Economic Studies archives.

Although the measurement of aggregate output and its growth remained controversial, as many of the survey articles mention.

Wiles’ suggestion that Sovietologists should spent much time visiting Soviet factories and farms would have seemed rather strange in the early years of the Bulletin’s existence, which was a time when access to the Soviet Union was so circumscribed that Gerschenkron ( 1950 ), for lack of any better sources of information, sought to learn how Soviet farms and enterprises worked by reading Soviet-era novels. Yet, Turgeon’s article on East European agriculture suggests that his many visits to East European farms were of considerable value in understanding developments in East Europe’s agrarian sector.

The Bulletin had already carried its first article on econometric methodology (Pryor 1983 ). The theme of the article, pertaining to cross-country comparisons, will be familiar to those who work with panel data.

A condensed version of Montias’ framework can be found in Koopmans and Montias ( 1971 ).

Indeed, as Hewett ( 1978 ) argued, these grand theories were, perhaps, not empirically testable at all.

Another shortcoming of the advice showered on the transition countries was that advisers were largely interested in grand schemes, whether for institutional change or for stabilization. The details of policy were, to a large extent, ignored. A paper by Havrylyshyn and van Rooden ( 2003 ) makes this point rather provocatively through its title, “Institutions Matter in Transition, But So Do Policies”.

See my discussion in Olofsgard, Wachtel and Becker ( 2018 ).

Springer citations provide a slightly different list: https://citations.springer.com/search?query=comparative%20economic%20studies&zeroCitationsShown=false&start=1&searchfield=all&sort=rank&year=&journals=&books=&authors=&content .

Brada, J.C. 2009. The New Comparative Economics versus the Old: Less Is More but Is It Enough? The European Journal of Comparative Economics 6(1): 3–15.

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Chapman, J.G. (1971) Labor mobility and labor allocation in the USSR. Proceedings of the Association for Comparative Economics. 1–27.

Conn, D. 1983. Comparative Economic Systems Theory: Progress and Prospects. The ACES Bulletin XXV(2): 61–80.

Djankov, E.L., R. Laporta, F. Lopez-de-Silanes, and A. Shleifer. 2003. The New Comparative Economics. Journal of Comparative Economics 31(4): 595–619.

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Eddie, S., and A. Wright. 1969. A Summer of Research and Language Study in Central and Eastern Europe, 1968. The ASTE Bulletin XI(1): 6–15.

Ellman, M. 1983. Changing Views on Central Economic Planning: 1958–1983. The ACES Bulletin XXV(1): 11–34.

Ellman, M. 2009. What Did the Study of the Soviet Economy Contribute to Mainstream Economics? Comparative Economic Studies 51(1): 1–19.

Estrin, S., and M. Uvalic. 2008. From Illyria towards Capitalism: Did Labour-Management Theory Teach Us Anything About Yugoslavia and Transition in Its Successor States? Comparative Economic Studies 50(4): 663–696.

Frank, Jr., C.F. 1971. Causes and Effects of Migration in Africa. Proceedings of the Association for Comparative Economics. 1–21.

Gerschenkron, A. 1950. A Neglected Source of Economic Information on Soviet Russia. American Slavic and East European Review 9(1): 1–19.

Grossman, G. 1969. A Key to Articles Published in Translation. In Problems of Economics, Vols. I–X . The ASTE Bulletin XI(2):17–26.

Havrylyshyn, O., and R. van Rooden. 2003. Institutions Matter in Transition, But So Do Policies. Comparative Economic Studies 45(1): 2–24.

Hewett, E A. 1978: The Structure of Economic Systems by J. M. Montias (Book Review). The ACES Bulletin XX(3–4): 101–105.

Hewett, E.A. 1983. Research on East European Economies: The Last Quarter Century. The ACES Bulletin XXV(2): 1–21.

Jefferson, G.H. 2008. How Has China’s Economic Emergence Contributed to the Field of Economics? Comparative Economic Studies 50(2): 167–209.

Kornai, J. 1971. Anti-equilibrium: On Economic Systems Theory and the Tasks of Research . Amsterdam: North Holland.

Kasun, J.R. 1972–73. A Comparison of Unemployment, Inflation, the Money Supply and Wages in Eight Countries. The ACES Bulletin XIV(3): 11–18.

Koopmans, T.C., and J.M. Montias. 1971. On the Description and Comparison of Economic Systems. In Scientific Papers of Tjalling C Koopmans , vol. 2, ed. T.C. Koopmans, 29–80. Cambridge, MA: MIT Press.

Li, W., and L. Putterman. 2008. Reforming China’s SOEs: An Overview. Comparative Economic Studies 50(3): 353–380.

McMillan, C.H. 1973. Factor Proportions and the Structure of Soviet Foreign Trade. The ACES Bulletin XV 1: 57–82.

Milenkovitch, D.D. 1983. Self Management and Thirty Years of Yugoslav Experience. The ACES Bulletin XXV(3): 1–26.

Montias, J.M. 1976. The Structure of Economic Systems . New Haven: Yale University Press.

Murrell, P. 2008. Institutions and Firms in Transition Economies. In Handbook of New Institutional Economics , ed. C. Menard and M.M. Shirley. Berlin and Heidelberg: Springer.

Murrell, P. 2011. The Way We Were: Reflections on the Comparative History of Comparative Economics. Comparative Economic Studies 53(4): 489–505.

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Olofsgard, A., P. Wachtel, and C.M. Becker. 2018. The Economics of Transition Literature. Economics of Transition 26(4): 827–840.

Pryor, F. 1983. An Econometric Shoal Warning for Comparative Economists. The ACES Bulletin XXV(3): 71–73.

Simai, M. 1978. Hungary in East European Economies Post - Helsinki : A Review Article. ACES Bulletin XX(3–4): 65–79.

Stuart, R.C. 1983. Russian and Soviet Agriculture: The Western Perspective. The ACES Bulletin XXV(3): 43–52.

Thornton, J. 1983. Twenty-Five Years of Soviet National Income Accounting: From Adjusted Factor Cost to Ultra-Adjusted Factor Cost. The ACES Bulletin XXV(3): 53–67.

Treml, V.G. 1971. Key to English Translations of Soviet Mathematical-Economic Papers. The ASTE Bulletin XIII(2): 7–14.

Turgeon, L. 1983. A Quarter Century of Non-Soviet East European Agriculture. The ACES Bulletin XXV(3): 27–41.

Wiles, P. 1983. Methodology. In Praise of Ourselves. The ACES Bulletin XXV(1): 1–10.

Wolf, T.A. 1973. Effects of Granting Most Favored Nation Treatment to Imports from Eastern Europe: The Polish Experience. The ACES Bulletin XV(1): 23–42.

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Brada, J.C., Wachtel, P. Comparative Economic Studies and Comparative Economics: Six Decades and Counting. Comp Econ Stud 60 , 638–656 (2018). https://doi.org/10.1057/s41294-018-0078-0

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The Macrogenoeconomics of Comparative Development

• Quamrul H. Ashraf , Oded Galor
• Published in Journal of Economic… 1 January 2017
• Economics, Sociology

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Economic Institutions and Comparative Economic Development: A Post-Colonial Perspective

World Development, Vol. 96, 2017

54 Pages Posted: 30 May 2018

Daniel L. Bennett

University of Louisville

Hugo Joaquin Faria

Instituto de Estudios Superiores de Administración (IESA), Finance Center

James D. Gwartney

Florida State University - Department of Economics

Daniel R. Morales

Asunto Económico

Date Written: May 18, 2018

Existing literature suggests that either colonial settlement conditions or the identity of colonizer were influential in shaping the post-colonial institutional environment, which in turn has impacted long-run economic development, but has treated the two potential identification strategies as substitutes. We argue that the two factors should instead be treated as complementary and develop an alternative and unified IV approach that simultaneously accounts for both settlement conditions and colonizer identity to estimate the potential causal impact of a broad cluster of economic institutions on log real GDP per capita for a sample of former colonies. Using population density in 1500 as a proxy for settlement conditions, we find that the impact of settlement conditions on institutional development is much stronger among former British colonies than colonies of the other major European colonizers. Conditioning on several geographic factors and ethno-linguistic fractionalization, our baseline 2SLS estimates suggest that a standard deviation increase in economic institutions is associated with a three-fourths standard deviations increase in economic development. Our results are robust to a number of additional control variables, country subsample exclusions, and alternative measures of institutions, GDP, and colonizer classifications. We also find evidence that geography exerts both an indirect and direct effect on economic development.

Keywords: Colonization, Comparative Economic Development, Growth, Geography, Institutions

JEL Classification: P16, P50 O11, O43

Suggested Citation: Suggested Citation

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Comparative Economic Development

What do you think constitutes economic development.

There are many schools of economic development. Typically, the debate was between the various forms of capitalism and socialism. Capitalism can be defined as an extreme version of Ayn Rand and Milton Friedman, where the state barely exists, and all power and opportunity exist in the private sector. Everything is liberalized: movement of labor, trade, and domestic investment. The idea here is that economies are self-regulating if left to the market, reaching equilibrium since businesses must conform to market demands or be destroyed.

On the other hand, capitalism has also found a niche in economies such as France or China where state intervention has been aimed at building up specific sectors of economic life that can compete best within the global market. As a matter of course, this seems to be the trend in global economics. Nearly all powerful economies functioning in developing countries right now have experienced a great degree of liberalization; this goes for India , China, and Mexico where state controls have either been eliminated or redirected to different roles of guidance rather than command.

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However, simply forming capital in the free market is not enough for true development, according to the social development school (Speth, 2008). Development should not be reduced to numerical indicators such as GDP growth and low inflation. In Iran, there is a push towards developing infrastructure that focuses on education, healthcare, and basic needs. This effort is led by a religious organization that operates alongside the state and prioritizes humanitarian values over mere economic growth. The country’s recovery from the Iran-Iraq war in the late 1980s was aided by a spike in oil prices which allowed for this focus on development. Due to ongoing tensions with Israel and the US, it makes sense for Iran to maintain control over its economy. Among all of the economies discussed in this essay, Iran has retained the highest level of state control (CIA, 2009).

On the other hand, older forms of socialism are largely outmoded. This may be due to their dismal failures in terms of both human rights and economic development, but also because the IMF and the United States retain a potent level of control over economic systems worldwide and loans that might keep them afloat. Despite its rhetoric, socialism never referred to the rule of workers or their control over the state system and economy. In practice, it meant domination by the state and party over all elements of social life. Socialist states could never overcome this hurdle despite heroic efforts by leaders such as Tito in Yugoslavia (cf Schoenbeck, 2008). Ultimately they created situations where politics dominated state building instead of rational investment strategies. Even in places like France where state control was once normative in the 1970s, such policies had to be abandoned (Rosser, 2004).

Joseph Schumpeter developed what is likely the most satisfying definition of economic growth. He belongs to the social development” school, which considers not only numbers but also the quality of life and rational development of individuals. Schumpeter deals with two poles of a qualitative economic idea: creativity and bureaucratization, which typify two types of people and economic systems to some extent (Dahms, 1995). The economy is created by the creativity of a small handful who are actually creative, while bureaucracy and managerial mentality maintain it. However, in modern times, bureaucracy dominates and destroys creativity while stunting truly creative minds’ growth: procedure rules over spontaneity, cliches over analysis, inertia over progress. Therefore, there is a crisis in the West according to Schumpeter – mediocrity or bureaucratic mentality’s domination over individualistic creativity.

Thus, apart from the necessary capital formation and rational structures, there is also the question of a qualitative approach to economics that is immensely important but often overlooked by professional economists. The Iranian case seems to be the best in this regard as they are determined, with great popular support, to maintain Islamic values in a hostile world. They are even willing to deal with American-imposed sanctions on their economy to maintain these values. Additionally, the religious values of the republic serve an economic function as decentralized religious entities are almost as powerful as the state itself. These entities provide a qualitative base for economic development and infrastructure (Rosser, 2004).

What Makes Economic Development Possible?

If the examples we have been studying are to be taken at face value, then the best model for developing countries is the freeing of the market mechanism under some kind of state guidance. The Chinese economy provides a great example (Rosser, 2004; CIA 2009). Once a poverty-stricken command economy on the Stalinist model, China has undergone significant market liberalization in the last 20 years under party control. This has been immensely successful as China has become one of the top three most powerful economies in the world, with industry taking off and an immense role in world trade. What is truly worth considering is that this occurred under a strongly authoritarian state, similar to South Korea or Taiwan. There may be something to this: a strong state can control or pacify unrest that develops when old structures are taken down and new ones erected. The state can direct investment into sectors that will develop native talent and natural resources most effectively.

However, since markets largely function independently in states like Korea and China, they avoid pitfalls seen in old Soviet Union where politics dominated over economics and distorted economic aims through political lenses. Recent Russian cases under Putin might also serve as an example: no one could deny that Gaidar/Yeltsin’s economic policies were anything short of disastrous. The Russian economy disappeared into pockets of mafia figures, oligarchs and shadow economy without strong lines between these figures while tax collection collapsed and local government fell into hands of oligarchs who skimmed profits off remaining industries with much economic liquidity skidding offshore to US or Great Britain.

Putin’s reform of security services was necessary to destroy obnoxious oligarchs or at least get some working for state resulting positively as organized crime halved while Russian economy regained its place as one of world’s most powerful economies more than just resource extraction (Volkov, 2002).

The same might be said for India, where an older semi-socialist state heavily dependent on the USSR felt itself slipping substantially when both the USSR collapsed and, more recently, the oil price spike forced India into a major balance of payments problem (CIA, 2009). In this case, the Indian state was forced to undergo substantial liberalization that has paid dividends but not to the extent as it has in China. The recovery of the USSR under Putin has also assisted in developing the Indian economy as Russia and India’s alliance has helped them economically and militarily in their battle against US-supported Pakistan. Over the last decade, due to this liberalization as well as trade liberalization and exposure to world markets, the Indian economy has seen growth rates of roughly 7.5% a year.

It might be remarked that, so far, the state has been the primary actor in recent cases of economic development. This is not accidental. While the neo-conservative movement may take credit for the victory of free markets,” in reality, cases such as those in Mexico, China, India and Russia have all been either state-led or state-guided (a fine line). The profit motive is undoubtedly powerful; however, there is a relevance to politics and society – not in a statist sense like what failed so badly in Yugoslavia – but also because recently industrializing states need to find their niche. This niche cannot be left to short-term profit motives alone. The success of China and India lies in how their respective states have assisted capital in finding its domestic and international niche within an already saturated market. This goes beyond the classic model of Friedman et al.

The fact remains that unrestrained capitalism leads to income inequality, domination of the state by the wealthy and environmental degradation (see Speth 2008 esp 17-67). Therefore, while older models of central planning are out of question, it is still necessary for states to retain a role.

Is there a single best system for achieving this development?

The system of economic development depends on the situation of the state in question. In small states such as Iran, which are surrounded by enemies, a strong state role is important. This may also be the case for South Korea or Belarus, both of which are strong developing economies following the first world model. At the same time, it seems that late-developing economies require state intervention (and hence a strong state) for the sake of goods described in the previous answer.

However, for advanced economies such as the US or France, there is a problem with Schumpeter’s Managerial Revolution. This revolution poses an important qualitative question in first-world states. Bureaucratic procedures seem to dominate over individual sovereignty to develop autonomous economic structures that can contribute qualitatively rather than just quantitatively.

Despite advances in modern first-world economies, average families still struggle to make ends meet even when controlling for American irrational spending ideas. The bottoming out of the dollar and massive debts have eroded Americans’ earning power: in the 1950s it was possible for a man to hold down a mediocre job and easily make ends meet while having low-cost health insurance, union benefits and retirement accounts.

The insatiability of American spending patterns and rejection of monetarist approaches to economics have rusted America’s economic base; an economy that simply cannot compete with China or India. American capitalists have responded by moving billions overseas to take advantage of cheap labor and more compliant” governments.

If spending power and purchasing power are any indication, America’s “muddling” economy has been a failure where even savings accounts and retirement accounts are no longer safe. Where has all this money gone? Does it disappear? Or does it change hands? (Cf Shutt 1998)

Americans, despite the irritating free market rhetoric, are utterly dependent on the state. Social security, disability, medicare, college loans, unemployment benefits and food stamps (which currently assist up to 65 million Americans) as well as government employment (including military service) make a mockery of the American love for free markets. The state even underwrites elite investments abroad through the Export-Import Bank. It is clear that the state is not going anywhere.

Hence, to help solve the Schumpeter problem,” the American (and others in the advanced world) needs several solutions to restart the economy. First, there should be a complete moratorium on foreclosures, especially for tax arrears. Second, substantial tax decreases for working families are necessary. Thirdly, elimination of corporate welfare is crucial. Fourthly, there should be a stress on vocational training rather than an explosion of college students which can be destructive. Fifthly, withdrawal of US troops from abroad is essential.

Furthermore, stable money (even if it means using gold) and protectionist policies are necessary along with a comprehensive energy policy written by someone other than Royal Dutch Shell.

Even with regards to states that are forced to remain strong and active during these times may see an increase in state revenues given the substantial increase in economic activity.

To free individuals and families from dependence on the state and obsession with making a living rather than enjoying life (which are mutually exclusive), must form the backbone of any economic recovery program in the West (cf Buchanan 1998 and Batra 2007).

Hence, the three authors mentioned here deal with a method of seeing economics as a national enterprise, with both individual and social goods predominating. Protection and import substitution are necessary for local growth. Therefore, US involvement in the IMF should be terminated. The states active in the global economy have several things in common: first, taxes should be lowered, and all forms of direct aid to business should be terminated. Small businesses should be tax-free for their first two years. Protection should be the rule rather than the exception, and states should mobilize resources to rationally take advantage of what the topography of the land can contribute. Regardless of the situation or state in question, these actions can stimulate economic growth. What is important is independence: both national and personal (and these two are related).

It seems that the examples of the Indian and Chinese economies might be emphasizing capital formation over independence. The latter approach would prioritize small businesses and potentially tax capital transfers from lower to higher (i.e., from small to large businesses), while encouraging transfers from higher to lower. From a purely economic standpoint, independence could be based on developing small, locally situated businesses at the expense of concentrated capital formation. Therefore, all of the above is dependent on a structural approach that seeks to control the money supply and purchasing power of individuals.

• Buchanan, Patrick. (1998) The Great Betrayal. Little, Brown and Co.
• Batra, Ravi. (2007) The Myth of Free Trade. Touchstone.
• Shutt, Harry. (1998). The Trouble with Capitalism: An Inquiry into the Causes of the Global Economic Failure. Zed Books. (Especially pages 77-110)
• Dahms, Henry (1995). From Creative Action to Social Rationalization of the Economy: Joseph Schumpeter’s Social Theory.” Sociological Theory 13:1-13.
• Schoenbeck, Brittney (2008). “Yugoslavia’s Self Management: Tito’s Failed Attempt to Bring Socialism to Yugoslavia.” The Russian Orthodox Medievalist.
• Rosser, John. (2004) Comparative Economics in a Transitional World Economy. MIT Press. Especially pages 23-113 and 450-575.
• Central Intelligence Agency. The CIA Factbook. CIA Library, 2009 ( www.cia.gov )
• Rosser , John.(2004 ) Comparative Economics in a Transitional World Economy.MIT Press.Especially pages 417-448 and 301-337.

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The Current Territorial Differentiation of the Industry of Irkutsk Oblast

N. a. ippolitova.

1 Sochava Institute of Geography, Siberian Branch, Russian Academy of Sciences, 664033 Irkutsk, Russia

2 Irkutsk State University, 664003 Irkutsk, Russia

M. A. Grigoryeva

This article discusses recent changes in the development of industrial production in Irkutsk oblast from 2010 to 2019. Industry is the basic component in the economic complex; it provides about half of the region’s gross added value and is characterized by a multi-sectoral structure formed primarily on the basis of using natural resources and cheap electricity. It is pointed out that in the last decade, a significant change in the structure of industry has led to a structural simplification of its sectoral composition with a significant shift toward the raw materials sector. Cities remain the leading centers of concentration of the manufacturing industry. The grouping of municipalities according to the level of industrial development was carried out according to the available statistical data: the calculated share of the employed in industry and the volume of shipped products of large and medium-sized organizations. On the basis of their ratio, groups of regions with intensive development of the extractive industries, primarily the oil and gas sector, as well as territories in which the industrial profile was formed in Soviet times but underwent transformations under the influence of changes in the market, were identified. A group of regions with very low industrial development has been identified, in which economic activities are mainly related to agriculture, logging, transport, and tourism. It is shown that some of the municipalities have changed their position in the groups when compared to 2010. The rest of the composition is relatively stable. It was found that in the first and fourth groups a change in priority in the development of types of economic activity occurred, whereas the second and third groups show a change in their proportions. Large business contributes to the extremely uneven distribution of investments across the oblast in the implementation of investment projects.

INTRODUCTION

Irkutsk oblast, one of the key industrial regions of Siberia, has great industrial and natural resource potential, which, together with its competitive advantages, make it possible to occupy a leading position among other regions of the country. Research by N.N. Klyuev [ 1 ] shows that Irkutsk oblast is one of the ten Russian regions that maximized the volume of industrial production from 1990 to 2017.

The modern industrial structure of Irkutsk oblast is made up of several basic industries, including the electric power industry, mining and timber processing complexes, nonferrous metallurgy, chemical and petrochemical industries, as well as mechanical engineering and metalworking. With the start of oil and gas production, the oil and gas industry has developed.

Currently, the spatial development of Irkutsk oblast is based on large territorial production centers located in Irkutsk, Bratsk, Shelekhov, Angarsk, Sayansk, Ust-Ilimsk, Zheleznogorsk-Ilimsk, Taishet, Ust-Kut, and Bodaibo, where over 55% of the region’s population lives. These territories account for more than 85% of the added value produced in the region, and about 60% of investments [ 2 ].

The development of industrial production and its territorial features have been widely considered by domestic geographers at different times. It is worth noting the works devoted to the period of industrialization of the eastern territories [ 3 ], economic development [ 4 ], and issues of the location and development of certain industries [ 5 , 6 ]. In recent years, the main attention has been paid to the study of industry in the sectoral context [ 7 – 11 ], as well as using the theory of territorial production complexes [ 12 , 13 ]. The use of an integrated approach makes it possible to determine structural changes in the industry of the regions [ 14 ].

At the regional level, there are many methods and approaches to the construction of typologies and groupings for the socioeconomic development of territories, and in particular industrial development. Consideration of the intraregional level of industrial development in the scientific literature is less common, for example [ 15 – 18 ], which increases the relevance of this research, which is of an applied nature.

MATERIALS AND METHODS

The information base of the study, which covers 2010–2019, was the materials of the Federal State Statistics Service, including databases of indicators of municipalities and official sites of local governments (analytical and forecast reports).

It is assumed in this work that at present industrial production includes the following sections of OKVED-2: Extraction of minerals (B); Manufacturing industries (C); Provision of electricity, gas and steam; air conditioning (D); Water supply; sewerage, waste collection, and disposal, and pollution elimination activities (E). According to OKVED, in 2010 industrial production consisted of the following types of activities: Extraction of minerals (C); Manufacturing (D); Production and distribution of electricity, gas, and water (E). We note that the work did not take into account the subsection Forestry and logging, which is included in the section Agriculture, forestry, hunting, fishing, and fish farming (A), although logging is a specialization of individual municipalities of the region.

The statistical data used at the municipal level (shipped goods of its own production, performed works and services on its own; the average number of employees of organizations by type of economic activity; investments in fixed assets) are given by Rosstat for large and medium-sized organizations, excluding small businesses. For example, the difference between the volume of products shipped for large and medium-sized organizations and for the full range of organizations is 5.6%, and for those employed in industrial production it is about 15%.

Due to the fact that according to the indicator called shipped goods of our own production, performed works and services on our own (without subjects of municipalities), information on certain types of economic activity is not published for 29 out of 42 municipalities of Irkutsk oblast in order to ensure the confidentiality of primary statistical data [ 19 ], the materials posted on the official websites of the corresponding municipalities were taken into account.

This work used comparative geographical and statistical research methods.

RESULTS AND DISCUSSION

In the structure of gross value added in Irkutsk oblast, industry accounted for 31.7% in 2010, and 44.8% in 2018. The specific weight of the volume of shipped products of the region in Russia increased from 1.4% in 2010 to 1.7% in 2019, due to the fact that the volume of mining operations increased nine times. The average annual number of workers employed in the industrial sector decreased by 3.6%.

In 2010–2019, the production index in Irkutsk oblast, based on the results of its retrospective recalculation by Rosstat, did not fall below 100%, reaching its maximum value in 2010, 113.3%, and the minimum value in 2019, 100.4% ( Fig. 1 ). Growth rates of the industrial production index in 2010–2012, were due to significant volumes of mining (especially hydrocarbons). The drop in production volumes in 2019 is associated with a decrease in the production of crude oil, metal ores, and due to the current federal emergency in the region in the summer of 2019 (flooding of settlements) and coal. The trend continued in 2020 under the influence of external and internal factors (Russian participation in the agreement with the OPEC + countries and, accordingly, the restriction on oil production, as well as restrictions on the part of Russian Railways in accepting coal for export). Against the background of this situation, the manufacturing industry in 2020, in contrast, showed an increase in production (in particular, the contribution was made by Pharmasynthez, which began to produce medicines for the treatment of coronavirus infection).

The production indices of Irkutsk oblast, %. Types of economic activity: 1 , industrial production; 2 , mining; 3 , manufacturing; 4 , supply of electricity, gas and steam; air conditioning.

Transformational processes, which differ in intensity and direction in different periods, have formed the modern structure of the region’s industry, whose leading industries are: extraction of crude oil and natural gas, which accounts for 35.2% of the volume of shipped products; energetics , 10.3; metallurgical production, 9.1; production of paper and paper products, 4.7; wood processing, 4.5%. In 2010, the leading positions were occupied by the energy sector, 18.3%; production of machinery, equipment, vehicles, 16.3; metallurgical production, 15.3; extraction of fuel and energy minerals, 8.9; and chemical production, 7.6%.

The average number of employees of organizations (excluding small businesses) and the volume of goods, works, and services shipped by large and medium-sized organizations were used as indicators that characterize the level of development of industrial production in 42 regional municipalities in 2010 and 2019.

The ratio of these indicators made it possible to distinguish four groups of municipalities by the level of industrial development (high, medium, low, and very low) in 2010 and 2019. ( Figs. 2, 3 ).

The distribution of the share of people employed in industry and the volume of industrial production of large and medium-sized organizations in Irkutsk oblast in 2010

The distribution of the share of employed in industry and the volume of industrial production of large and medium-sized organizations in Irkutsk oblast in 2019

In 2019, compared to 2010, there was a transition of a number of territories of the region from one group to another. In three municipalities (Ust-Kutsky, Katangsky, and Alarsky districts) there was an increase in the level of industrial development, and in the other three municipalities (Angarsk, Shelekhovsky district, and Usolye-Sibirskoe) a decrease occurred.

The Highly developed group (Katangsky, Ust-Kutsky regions, and Bratsk) is characterized by high values of the share of people employed in industrial production and the volume of shipped products. It accounts for 21.2% of those employed in industrial organizations of the region (rotation work is also used) and 48.4% of investments in fixed assets. The northern regions continue to increase their concentration of the volume of shipped products in the region by the type of economic activity mining (2010, 43.8%; 2019, 73.6%). Oil and gas condensate production increased by 5.4 times, from 3.3 million tons in 2010 to 17.9 million tons in 2019. Oil produced from fields in the north of the region is fed to the Eastern Siberia–Pacific Ocean (ESPO) pipeline system; it is delivered to the Far East and then exported to China and other countries of the Asia–Pacific region. The main companies represented on the territory of these municipalities are Verkhnechonskneftegaz, Dulisma, and the Irkutsk Oil Company. The latter is the largest taxpayer to the regional budget (in 2018, the share of its contributions was 12.5%). Generally, oil producing enterprises provided 46% of all income tax revenues in 2018 in the structure of tax revenues of the consolidated budget of the region.

Industrial production in Bratsk is associated with the activities of such processing enterprises as RUSAL Bratsk (in 2019 it provided 38% of the aluminum production in Russia), the Ilim Group in Bratsk, and the Bratsk Ferroalloy Plant, which form the industrial image of the city. During the period an increase in the volume of shipped products in the manufacturing sector was noted in Bratsk (2010, 22.6%; 2019, 29.9%), which allows it to remain a large industrial hub of the region.

Group with an average level of development (the Angarsk, Svirsk, Sayansk, Ust-Ilimsk, Irkutsk, Bodaibinsky, Shelekhovsky, Nizhneilimsky, and Tulunsky districts) is distinguished by a high share of those employed in industry and an average volume of industrial production. About half of the region’s population lives in these municipalities, they produce 40.6% of industrial production, and concentrate 61.5% of those employed in the industrial sector, as well as 38.4% of investments. The group includes almost all major industrial centers in the region. Unlike the previous case, the sectoral composition of this group is more diverse and is represented by enterprises of nonferrous metallurgy, mechanical engineering, chemical and petrochemical, pulp and paper, nuclear, pharmaceutical, and food industries (Irkutsk Aluminum Plant, Irkutsk Aviation Plant, Angarsk Petrochemical Company, Angarsk Polymer Plant, Sayanskkhimplast, Ilim Group in Ust-Ilimsk, Angarsk Electrolysis Chemical Plant, Pharmasintez, etc.). The production profile of these territories was formed back in the Soviet era, but at the present stage enterprises continue to play a significant role in the socioeconomic development of the region, especially for export-oriented industries.

The mining sector is represented by gold mining at ore and alluvial deposits (Polyus Verninskoe, Vysochaishy, Druza, Lenzoloto, etc., which provided more than 9% of the gold mining in Russia), iron ore (Korshunovsky GOK), and coal (Tulunugol open pit).

A separate place in this group is occupied by Irkutsk, the administrative center of the region with a diversified industry, which is the center of the emerging agglomeration of the same name. For Irkutsk, there is a significant increase in shipped products by the type of economic activity supply of electricity, gas, and steam, and air conditioning (in 2010, 27.9%, and in 2019, 87.4%). This increase is explained by a peculiarity of statistical accounting: most of the products produced on the territory of the region for this type of economic activity are attributed to the city. In reality, Irkutsk produces 25 times less of them. We note that almost all large energy companies, except for Vitimenergo, are registered in the regional center.

The low development group (Usolye-Sibirskoe, Winter, Tulun, Cheremkhovo, Kirensky, Zhigalovsky, Nizhneudinsky, Usolsky, Mamsko-Chuisky, Zalarinsky, Kazachinsko-Lensky, Taishetsky, Ust-Ilimsky, Bratsky, Nukutsky, Alarsky, Slyudyansky, Chunsky, Chunkhovsky, and Irkutsky) is the most numerous and heterogeneous in its composition. It is characterized by a small share of those employed in the industrial production of the region and a low volume of goods shipped. This group accounts for 8.8% of the volume of shipped goods, works, and services of the region, 16.8% of those employed in industry, and 12.7% of investments. In more than half of the municipalities, the leading type of economic activity is manufacturing, which is represented by medium-sized and large companies: a branch of the Ilim Group in the Bratsk District, Knauf Gips Baikal, Rusforest Magistralny, Usolye Salt Extraction and Processing Shop (part of Russol), and others.

Mining predominates in six municipalities (Gazprom Dobycha Irkutsk, IOC, Nedra mining company (GPK), Tyretsky salt mine, Cheremkhovugol open pit, etc.); in Tulunsky district, it is power engineering, and in Mamsko-Chuysky, it is water supply. At the end of 2022, gas is planned to be supplied from the Kovykta field (Irkutsk gas production center) to the Power of Siberia gas trunkline, which is oriented to external consumption (China).

The group includes territories both with industrial enterprises closed in the post-Soviet period and with new industrial facilities that have just begun to function. Single-industry towns (Usolye-Sibirskoye, Cheremkhovo, and Tulun) were given the status of a territory of advanced socioeconomic development to support the economy.

The very low development group (Osinsky, Kuytunsky, Bayandaevsky, Olkhonsky, Balagansky, Kachugsky, Bokhansky, Ekhirit-Bulagatsky, Ust-Udinsky, and Ziminsky districts). This accounts for only 0.1% of the volume of products produced in the region, 0.5% of those employed in industrial organizations of the region, 0.5% of investments in fixed assets. The industry is mainly represented by food. The districts specialize in agriculture, logging, and recreational activities. There are no large companies; small business prevails.

In the first and fourth groups, the priorities in the development of types of economic activity changed, and in the second and third groups, their proportions changed ( Fig. 4 ).

The change in the structure of types of economic activities by groups of municipalities of Irkutsk oblast in 2010 and 2019, %. Types of economic activity: 1 , mining; 2 , manufacturing industries; 3 , supply of electricity, gas and steam; air conditioning; 4 , water supply, sewerage, waste collection and disposal, activities to eliminate pollution.

From 2010 to 2019, the volume of shipped products and investments increased by 3.4 and 3.8 times, respectively (on average per one municipal district) (see Table 1 ), with a decrease in the population and employed in the industrial sector. The greatest change in these indicators is noted in the first and second groups.

Industrial development indicators by groups of municipalities of Irkutsk oblast in 2010 and 2019 (on average for one municipality)

The regional industry is dominated by local organizations of various sizes, a quarter of the large and medium-sized companies are controlled by holding companies such as Gazprom, Rosneft, Polyus, Ilim Group, Rosatom, Rostekh, Mechel, Renova, En+ Group, and RUSAL.

In recent years, as a result of the active development of oil and gas resources, the process of complex formation has begun 1 : for example, IOC is building a polymer plant in Ust-Kut (commissioning is planned in 2024) and is building the Ust-Kutsk gas processing plant for the supply of raw materials (to be launched in 2021).

RUSAL invested and attracted large investments in the construction of the Taishet aluminum plant (the launch was postponed to 2021), as well as the Taishet anode factory, which will meet the plant’s needs for baked anodes. The Ilim Group will build a pulp and cardboard mill in Ust-Ilimsk by 2023, which will increase the production of unbleached packaging materials. These and other projects, which were initiated by big business and are in an active stage, attract investments to the municipalities of the region ( Fig. 5 ).

The share of investments in fixed assets of large and medium-sized organizations of Irkutsk oblast, %. Municipalities: 1 , Irkutsk; 2 , Katangsky district; 3 , Bratsk; 4 , Angarsk; 5 , Usolye-Sibirskoye; 6 , Ust-Kutsky district; 7 , Taishetsky district; 8 , others.

In 2010 the share of investments of the five leading municipalities in the region was 71.2%, while by 2019 the concentration increased to 78.8%. In 2017–2019 investment growth rates increased, on average, in most municipalities (85.7%), especially in municipalities of the third group, the Tulun, Ust-Ilimsky, Kuytunsky, and Cheremkhovsky districts. Per capita investment rates are the highest for municipalities of the first and second groups, Katangsky, Ust-Kutsky, and Bodaibinsky northern regions, which is explained by the large volumes of investments made by large companies in the development of natural resources and the low population density.

CONCLUSIONS

In the last decade, an increase in the share of the raw materials sector (by four times) with a significant decrease in the share of mechanical engineering (by four times), chemical production (by almost two times), energy, and metallurgy determines the structural shifts in the region’s economy. The shift towards the extractive sector, which is more focused on the export of raw materials, structurally simplifies the sectoral composition of industry.

The existing main territories for gold and iron ore mining (Bodaibinsky, Nizhneilimsky regions), as well as peripheral northern regions (Katangsky, Ust-Kutsky), areas for the development of oil and gas resources, have increased their importance and increased concentration in industrial production. In 2019, they accounted for the largest volume of shipped products in the extraction of minerals, 89.1% (2010, 50.6%). This is also facilitated by the pipeline system, the main ESPO oil pipeline and the Power of Siberia gas pipeline (its section under construction in the region), as well as the increased demand for hydrocarbons in the markets of the Asia–Pacific region. The development of the oil and gas industry attracted labor resources from other regions of the country (Western Siberia, the Republic of Tatarstan, etc.). In 2019, the number of workers on a rotational basis exceeded 25 000 people per quarter, of which more than 30% are residents of the region.

The cities, the leading industrial centers of the region (Bratsk, Irkutsk, Angarsk, Shelekhov, Ust-Ilimsk, and Sayansk), whose large enterprises were created in Soviet times, have adapted to changing conditions and still retain their stability. In 2019, they formed 87% of the shipped products of the manufacturing industry (in 2010, 90.5%). Other cities (Tulun, Zima, and Usolye-Sibirskoye) lost their importance as a result of the closure of city-forming enterprises in the post-Soviet period; in 2013, Baikalsk was added to them. As a regional center, Irkutsk is statistically attributed to a significant volume of shipped goods, works, and services in the energy sector (2019, 87.4%), which complicates the territorial analysis of this industry.

To identify intraregional differentiation of the level of industrial development in 2010 and 2019 four groups of medical organizations were identified, which are different in composition depending on the distribution of quantitative criteria (the share of people employed in industrial production and the volume of shipped products of large and medium-sized organizations). Six MOs changed their position in the groups, while the rest retained their positions,

Over the past 10 years, only five municipalities (Irkutsk, Bratsk, Angarsk, Katangsky, and Ust-Kutsky districts) have concentrated more than two-thirds of their investments in fixed assets, which indicates the extreme unevenness of their distribution. Basically, the resource advantages of the region in the implementation of large investment projects in gas chemistry, nonferrous metallurgy, timber processing, pulp and paper production, and mining are used by large businesses that control significant enterprises. However, investment activity has little effect on improving socioeconomic conditions, which has been noted by other researchers [ 14 , 21 ].

The work was carried out at the expense of the state assignment (АААА-А21-121012190019-9).

1 According to P.Ya. Baklanov, the processes of the initial formation and subsequent development of territorial combinations of nodal elements, various enterprises (or territorial-production complexes) are complex formation [ 20 , p. 213].

Contributor Information

N. A. Ippolitova, Email: ur.tsil@pi-anin .

M. A. Grigoryeva, Email: ur.xednay@9irgram .

Irkutsk Oblast is situated south of East Siberia, in the watershed of the upper Angara, Lena and Nizhnyaya Tunguska rivers, embracing an area of 767,900 square km. (4.6 percent of the Russian territory). It borders on Saha Republic (Yakutia), Buryatia, Tyva, the Krasnoyarsk region and the Chita region.

In 1996, the regional population amounted to 2,786,000 people, 79.5 percent of whom live in cities. The population density is 3.7 people per sq. km. (compared to 8.7 in Russia as a whole). The region consists of 33 districts and 22 cities, 14 of which are regionally subordinate. Five cities have populations of over 100,000: Irkutsk (the regional administrative center), Bratsk, Angarsk, Ust-Ilimsk and Usolie-Sibirskoye. Based on the 1989 census, 88.5 percent of the population are Russians, 3.4 percent are Ukranians, and 2.7 percent are Buryats. The l990s saw the population decreasing due to a low fertility rate, a rather high mortality rate, and migration outside of the region. The registered unemployment rate is 4.1 percent of the active population, or 51,200 people (in Russia, this rate is 3.8 percent.)

The Baikal area continues to be the base of Russian economic expansion towards the Far East. Any Russian territory north or east of the Irkutsk region is less industrially advanced. A number of cities, and in particular Irkutsk, enjoys rich cultural traditions and massive scientific and educational potential.

The region concentrates considerable mineral wealth in deposits of gold, coal, oil and gas, rare metals (niobium, tantalum, lithium, rubidium), 47 kinds of precious and semi-precious stones (lazurite, charoite, etc.), common salt and potassium carbonate, iron ore, manganese, titanium, and mineral building materials (magnesite, dolomite, etc.) On the list of deposits of federal importance are those of of Verchnyaya Chona (oil), Sukhoy Log (gold), Kovykta (gas), Nep (potassium carbonate), Belaya Zima (niobium, tantalum), Savinskoye (magnesite), Mugun (coal).

About 76 percent of the territory is covered with forests. Timber resources amount to 8.3 billion cubic meters, over 11 percent of all Russian timber. The Irkutsk region is one of the largest industrial timber bases in the country - second in size after the Krasnoyarsk region. The timber is of uniquely high quality as measured by variety of trees, their concentration and accessibility.

Lake Baikal contains 20 percent of the planet's fresh water. The availability of energy, timber and mineral resources gives shape to the region's industrial complex, which consists of 4,500 large, medium and small enterprises, and concentrates over 60 percent of fixed assets.

The timber industry accounts for 13.5 percent of the regional production. The Irkutsk region leads Russia in the amount of forest exploitation and cuts about half of the timber in East Siberia. Per capita timber exports are five times the Russian average. The region produces 8 percent of Russia's cardboard and over 50 percent of its pulp, including almost 100 percent of Russia's cord pulp and over 50 percent of its viscose pulp. The regional share of the total volume of timber production in the Russian Federation increased from 12.5% in l994 to 15.3% in 1995. The largest enterprises are the Bratskkomplex holding, the Ust-llimsky concern, and the Baikalsk pulp factory. The region is one of the largest consumers of electrical and thermal energy in Siberia.

The Baikal area produces almost a quarter of Russian aluminum. Two large aluminum manufacturers are operating in the area, one in Jrkutsk and the other in Bratsk. Thirty-one percent of the regional oil production is produced by the Angarsk oil and chemical joint- stock company, which uses West-Siberian oil. The region produces around 70 percent of oil-derived products used in East Siberia. A considerable amount of product goes to the Far East. The enterprises Usoliekhimprom, Sayanskkhimprom and Angarskkhimreaktiv, and, partly, Angarsk and Bratsk Timber Industrial Complex, control the production of polymerized plastic, artificial fiber, and mineral fertilizers. The Irkutsk region accounts for more than half of the commercial chemical production of East Siberia.

The engineering, metal processing and consumer goods industries are less developed.

Along with natural resources and industrial potential, an important condition for dynamic development is political stability and "advancement." This issue has been pointed out by domestic and foreign observers (for instance, by the first secretary of the U.S. Embassy in Russia, Thomas Graham). Advancement is closely related to the rate of market economy changes. The Irkutsk region is numbered among the country's 12 regions with the most developed securities markets. In the Baikal area, around 700 joint-stock companies are operating, and these account for almost 74 percent of total production. Small and medium-sized businesses produce 17.7 percent of commercial production, a higher percentage than anywhere else in East Siberia. Non-ferrous metallurgy, wood processing, oil and chemicals, as well as infrastructure industries (communications and commerce) are quite attractive for foreign investors.

The situation in the regional economy is, however, ambiguious. Trends for industrial and financial stabilisation have been inconsistent. in 1996, tough government-imposed anti-inflation policies pushed the region, whose market structure was still rather undeveloped, into a recession. In 1996, the industries that continued to produce steadily were non-ferrous metallurgy (with a volume index of l03%), energy, and food. As a whole, production decreased by 11.9 percent in comparison with 1995. The decrease in the consumer goods industry was 42.3 percent, in the construction materials industry, 41.9 percent, and in the timber complex, 19.1 percent. The crisis was not helped by the agricultural sector, which is entirely situated in an area of risky agriculture.

The reduction of capital investment is continuing. The flow of financial resources into the financial sector and out of the production sector is growing, partly to cover the budget deficit. A non-payment crisis, inter-industry price disproportions, narrowing purchasing power of the population, and a world market situation unfavorable to some export positions brought about a serious worsening in the financial situation of enterprises. The resulting decrease in profits and increase in losses have in turn created a shrinking tax base.

A decrease in the budget income, in turn, aggravated the above- mentioned processes. The introduction of "currency band" in 1995 also played a negative role in the economy of the region, which is an export-oriented primary producer that depends only partly on macroeconomic factors of the developing situation in Russia. To maintain political stability and, at the same time, create conditions for dynamic economic development, specific regional problems need to be addressed.

One of these problems is the tolling scheme of operations that has been adopted by the major regional enterprises. The major taxpayers, primarily Angarsk Oil and Chemical (ANKhK) Company and Bratsk Aluminum Plant, changed their de facto owner (ON EXIM bank in the case of ANKhK and Trans World Group for BRAZ) and switched to processing raw materials without participating in selling the finished product. The tolling scheme allows the owner companies to keep jobs in large cities outside the region and retain a considerable amount of profit. This arrangement, however, provides minimal income to the regional budget. So, the flight of profits from energy-consuming enterprises outside of the region (in the case of Angarsk chemicals) or outside of the country (in the case of BRAZ) offsets the potential gain by the Irkutsk region from the availability of inexpensive energy.

The location of environmentally dangerous production facilities in the Irkutsk region according to the tolling scheme continues to reinforce the colonial nature of the area's economy. Along with macroeconomic factors, the tolling scheme blocks the renovation of obsolete technologies and sharpens the struggle for the access to raw materials in the export-oriented industnes.

Another "long-playing" problem is the dispute between the Irkutsk region and the federal government over the issues of ownership and rates in the power industry. Introducing the power plants on the Angara to the wholesale market may cause energy-consuming enterprises to close down, resulting in runaway unemployment. Whether or not another aluminum factory will be built in Ust-llimsk is dependent on the solution of this problem.

Another important energy-related question is whether the region's primary industry should be coal- or gas-oriented. On one hand, Vostsibugol, the largest regional coal producer, is a stable operation, and the cost of coal extraction in this region is among the lowest in Russia. On the other hand, depletion of old deposits necessitates placing new ones into operation. Additionally, an environmentally grave situation in the regional industrial centers (Baikalsk, Angarsk, Shelekhov, Bratsk, Usolie-Sibirskoye, Cheremkhovo, Irkutsk) can be improved by using natural gas instead of solid fuel in thermal power plants and boilers. So, which is better: investment in coal extraction or development of the condensed gas deposits in Kovykta? Either response will significantly influence the relationship between the "coal" and "oil-and-gas" teams of the regional elite.

Another problem worth mentioning is conflicts between strategic owners of the enterprises on which whole towns are dependent and urban communities (e.g., Menatep hank in Ust-llimsk). The conflicts result not only from a clash of interests, but also from bad management.

There are also strictly objective difficulties to economic growth in the region:

• high transportation costs resulting from the geographical location of the region in the center of Eurasia and its remoteness from "sea gates."
• a problematic climate for the development of an international travel industry.

On the positive side, international relations with the countries of the Pacific region, Korea, China and Japan hold potential for the region.

A public policy regarding regional interests is still non-existent, and, in our opinion, for a deeper reason than just experts' negligence. There is no such policy in place because as yet there is no true civil society, either in Russia as a whole or in the region. Only the realization of their interests by major social groups, the rise of developed political institutions, and the tradition of democracy will allow for shaping social demands to be addressed to the authorities and executed under public control. While these factors are absent, the regional leaders are very subjective in interpreting the will of the people and the notion of "regional interests." The "regional interest" often hides industrial lobbying and attempts to promote clan interests as public ones. The situation will take some time to change.

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© 1997 copyright by business net - irkutsk. april 03, 1998.

43 Facts About Bratsk

Written by Elvira Llamas

Modified & Updated: 29 May 2024

Reviewed by Jessica Corbett

• Industrial Center Facts
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Bratsk, a city located in the Irkutsk Oblast region of Russia, is a hidden gem worth exploring. With a rich history and a vibrant culture, Bratsk offers a unique experience to its visitors. From breathtaking natural landscapes to architectural wonders, there is something for everyone in this enchanting city.

In this article, we will uncover 43 fascinating facts about Bratsk that will pique your curiosity and make you want to pack your bags and embark on an adventure. Whether you are a history buff, nature enthusiast, or someone who appreciates art and culture , Bratsk has it all. So, let’s dive into this incredible city and discover what makes it so special!

Key Takeaways:

• Bratsk, a city in Russia, boasts a rich history, stunning landscapes, and a vibrant community, offering a unique experience for residents and visitors alike.
• With its impressive hydroelectric power station, beautiful natural reserves, and diverse cultural scene, Bratsk is a city poised for promising growth and development.

Bratsk is a city in Irkutsk Oblast, Russia.

Located in Siberia, Bratsk is situated on the Angara River and is known for its breathtaking natural landscapes.

The city of Bratsk was founded on August 26, 1947.

It was established as a residential settlement for the workers of the Bratsk hydroelectric power station.

Bratsk is home to one of the largest hydroelectric power plants in the world.

The Bratsk Hydroelectric Power Station has a capacity of 4,500 MW and plays a significant role in Russia’s energy production.

The population of Bratsk is approximately 246,000 people.

It is the third-largest city in Irkutsk Oblast, after Irkutsk and Angarsk.

The name “Bratsk” is derived from the word “brothers”.

It symbolizes the unity and cooperation of the workers who contributed to the construction of the city.

Bratsk experiences a continental climate with long, cold winters and short, warm summers.

The average temperature in January is around -19°C (-2°F), while in July , it reaches an average of 18°C (64°F).

The Bratsk Reservoir, created by the damming of the Angara River, is one of the largest artificial lakes in the world.

It covers an area of 5,470 square kilometers (2,110 square miles ) and provides opportunities for various water activities.

Bratsk is a major transportation hub in Siberia.

It has a well-developed railway system and is connected to other cities in the region through an extensive network of roads.

The city of Bratsk is known for its vibrant cultural scene.

It is home to several theaters, museums, and art galleries that showcase the rich history and traditions of the region.

Bratsk is surrounded by picturesque natural landscapes, including dense forests, mountains, and rivers.

The area offers opportunities for outdoor activities such as hiking, fishing , and wildlife watching.

The Bratsk Dam, which forms the Bratsk Reservoir, was completed in 1967.

It stands at a height of 124 meters (407 feet) and is an impressive engineering feat.

The construction of the Bratsk Hydroelectric Power Station required the relocation of several villages and towns.

Efforts were made to ensure the smooth transition and well-being of the affected residents.

Bratsk has a diverse economy, with industries including energy, metallurgy, forestry, and agriculture.

The city’s development is closely tied to the Bratsk Hydroelectric Power Station and the surrounding natural resources.

Bratsk is home to several educational institutions, including universities, colleges, and vocational schools.

It serves as an educational center for the region, attracting students from different parts of Siberia .

The people of Bratsk are known for their warm hospitality and welcoming nature.

Visitors to the city often praise the friendly atmosphere and genuine kindness of the locals.

Bratsk has a rich cultural heritage, with influences from various ethnic groups living in the area.

The city celebrates traditional festivals, music, and dance, reflecting the diversity of its population .

The Bratsk Fortress is an important historical landmark in the city.

It dates back to the 17th century and serves as a reminder of Bratsk’s significant role in the region’s history.

Bratsk is known for its delicious cuisine, which features traditional Siberian dishes as well as Russian favorites.

Visitors can enjoy hearty soups, smoked fish , and locally sourced berries and mushrooms.

The Bratsk Museum of Local Lore showcases the history, culture, and natural wonders of the region.

It is a must-visit for those interested in learning more about Bratsk and its surroundings.

Bratsk has a well-developed sports infrastructure and supports various athletic activities.

The city has produced many talented athletes who have competed at national and international levels.

Bratsk is surrounded by beautiful nature reserves and national parks.

These protected areas are home to a wide range of flora and fauna, offering breathtaking sights for nature enthusiasts.

The Bratskaya street, one of the main streets in the city, is lined with shops, restaurants, and cafes.

It is a popular spot for locals and tourists to stroll, shop, and enjoy a meal.

Bratsk has a well-developed healthcare system, with modern hospitals and clinics.

The city prioritizes the health and well-being of its residents by providing quality medical facilities.

The Bratsk Opera and Ballet Theater is a cultural hub in the city, hosting performances by talented artists.

It showcases ballets, operas, and other musical events , attracting audiences from near and far.

Bratsk has a vibrant music scene, with local bands and musicians performing a variety of genres.

Music lovers can enjoy live performances at venues throughout the city.

The annual Bratsk International Film Festival celebrates the art of cinema.

It attracts filmmakers, industry professionals, and film enthusiasts from around the world.

The Bratsk Circus is a popular entertainment venue, featuring thrilling acrobatic performances and animal shows.

It offers fun-filled experiences for both children and adults.

Bratsk has a strong sense of community, with various civic organizations and volunteer groups working towards the betterment of the city.

Citizens actively participate in initiatives aimed at improving the environment, education, and social welfare.

The beautiful Bratsk City Park is a favorite spot for leisurely walks, picnics, and outdoor activities.

It offers a tranquil escape from the bustling city life.

Bratsk is known for its stunning sunsets, which paint the sky with vibrant colors.

The breathtaking views make for memorable moments and great photo opportunities.

The local markets of Bratsk are vibrant hubs of trade, showcasing a variety of local produce and goods.

Visitors can explore the stalls and sample fresh fruits, vegetables, and handicrafts.

Bratsk is an important center for scientific research and innovation.

The city is home to various research institutes and laboratories that contribute to advancements in different fields.

The Bratsk State University offers a wide range of educational programs across various disciplines.

It attracts students not only from Bratsk but also from other parts of Russia and abroad.

Bratsk is a city that embraces technology and digital connectivity.

The city’s infrastructure is well-equipped to meet the demands of the digital age.

Bratsk hosts various cultural events throughout the year, including music festivals, art exhibitions, and theatrical performances.

The city’s calendar is filled with opportunities to immerse oneself in the vibrant cultural scene.

Bratsk is a city where old traditions and modernity coexist harmoniously.

While the city embraces progress, it also values and preserves its rich cultural heritage.

Bratsk is surrounded by vast forests, making it an ideal destination for nature lovers and outdoor enthusiasts.

Hiking, camping, and wildlife spotting are popular activities in the area.

The Bratsk Philharmonic Orchestra is renowned for its exceptional performances and talented musicians.

It enchants audiences with a diverse repertoire that includes classical, contemporary, and traditional pieces.

Bratsk takes pride in its strong educational system, which emphasizes the importance of knowledge and skills.

It prepares the younger generation for bright futures and successful careers.

Bratsk is a city that celebrates diversity and promotes inclusivity.

It values the contributions of people from different backgrounds and fosters a sense of unity among its residents.

The Bratsk Mosque is an important religious landmark in the city.

It serves as a place of worship for the Muslim community and represents the city’s religious tolerance.

Bratsk is a city with a strong sense of environmental consciousness.

Efforts are made to protect and preserve the natural resources and promote sustainable practices.

Bratsk is a city that holds great potential for growth and development.

With its rich resources, vibrant community, and forward-thinking outlook, it is poised for a promising future.

In conclusion, these 43 facts about Bratsk showcase the fascinating history, natural wonders, and cultural significance of this city. From being home to one of the world’s largest hydroelectric power stations to boasting stunning landscapes like Lake Baikal and the Taiga forests, Bratsk has something for everyone. Its rich history, with traces of ancient civilizations and Soviet-era industrial development, adds a unique charm to the city.Whether you’re interested in adventure tourism, exploring historical sites, or simply immersing yourself in the local culture, Bratsk offers a myriad of experiences. The city’s warm hospitality, friendly locals, and delicious local cuisine make it a memorable destination for travelers.Don’t miss the opportunity to witness the breathtaking beauty of Bratsk. Visit this city and unlock its hidden gems, unforgettable experiences, and the chance to create lifelong memories.

Q: When is the best time to visit Bratsk?

A: The best time to visit Bratsk is during the summer months of June to August when the weather is pleasant and outdoor activities are in full swing.

Q: How do I get to Bratsk?

A: Bratsk can be reached by air through the Bratsk Airport, which has regular flights from major cities in Russia. Alternatively, you can also travel by train or bus from neighboring cities.

Q: Are there any popular attractions in Bratsk?

A: Yes , Bratsk is known for its popular attractions such as the Bratsk Hydroelectric Power Station, Lake Baikal, Taiga forests, and the Bratsk Reservoir.

Q: Is Bratsk safe for tourists?

A: Yes, Bratsk is generally safe for tourists. However, it is always advisable to take necessary precautions and be aware of your surroundings, especially in crowded areas.

Q: What are some traditional dishes to try in Bratsk?

A: Some traditional dishes to try in Bratsk include Siberian pelmeni, omul fish, stroganina, and local berry desserts.

Bratsk's stunning landscapes beckon nature enthusiasts to explore the wonders of the taiga biome, where cold climates shape unique ecosystems. This Russian city shares its rich history and culture with other fascinating destinations like Orenburg, inviting travelers to discover the depth and diversity of Russia's urban tapestry. Bratsk's massive hydroelectric power plant stands as a testament to human ingenuity, harnessing the immense potential of flowing water to power homes and industries, showcasing the transformative impact of hydroelectric technology .

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