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Discussion
of Case Study Themes
Case
Study 1 -- St. Petersburg: Russia's Window on the
West
St.
Petersburg: A City of Russian and European Influences
St. Petersburg was established in 1703 in the place
where the low-lying delta of the Neva River meets
the Gulf of Finland. Peter the Great planned this
seaport to provide a link to the rest of the European
continent. In later years, this city that incubated
the Communist Revolution was renamed Leningrad and
saw its status as Russia's capital lost to Moscow.
Now the physical and social structure of the city
is in many ways a living artifact of socialist policies
practiced for more than seventy years.
As
the fourth most populous city west of the Ural Mountains
(behind Moscow, London, and Paris), St. Petersburg
is now open to the influence of Western ways and to
trade in goods from the rest of the European continent.
The city, once again called St. Petersburg, is reorienting
itself toward the West in the area of free market
real estate.
Location,
Location, Location
In a market economy approach to real estate valuation,
location is a key factor in setting prices for the
conversion of government-subsidized housing to private
ownership. Proximity to the historical center of the
city, the central business district, parks and recreation,
and mass transit plays a large role in this new equation.
Not only does the consideration of location and its
value occur within the city, but St. Petersburg's
international orientation and its potential comparative
advantage adds to market price estimates.
Old
and New Economic Systems Influence Family Space
The visit to the Goronov family shows socialism in
action. Under Soviet standards, only ninety-six square
feet (about nine square meters) of living space were
allotted per person. But sturdy, government-backed
buildings provided each family with its own individual
apartment at about two percent of the household income.
Such guarantees no longer exist for the Goronovs,
whose wages have not risen with the fall of communism.
The planned economy took care of citizens, albeit
modestly in terms of the "luxury" of space,
in a way the new free market does not.
Case
Study 2 -- Vologda: Russian Farming in Flux
Difficult
Physical Conditions Shape Activity in Vologda
The northern latitude and inland locations of both
the region and city of Vologda result in long, cold
winters. The region's continentality does not allow
for the moderating effects that ocean currents can
have on extreme temperatures. Vologda's winter low
temperature can drop to -4O°F.
Vologda's
location is far north of the "black earth zone"
where Russia's best soils are found. Due to the region's
northerly location and sandy and poor soils, the growing
season and the productivity of the land are severely
limited. Under these difficult physical conditions,
dairy farming is a logical specialization.
Natural
Resources are the Basis for Vologda's Economy
Vologda's northern position borders the boreal forest
zone. Seventy percent of Vologda's surface is forested,
and it has a timber industry that exports its products
to Sweden, Norway, Finland, and recently, France.
The area's resource stock and opportunities for timber
processing complement the short growing season for
crops and facilitates the area's adaptation to dairy
farming.
Value
is added to Vologda's forestry resources through local
processing.
Timber products such as industrial paper and cardboard
are shipped to foreign buyers and provide an essential
source of income for the region. As a result, issues
such as product quality and international trade are
now important to the management of Vologda's forestry
resource. The philosophy and production methods of
the market system are becoming ever more a part of
this region of Russia.
Transition to a Market System Changes the Use and
Meaning of Resources.
When sales were subsidized under the planned economy,
Russian farmers didn't have to worry about year-round
productivity or diversifying the use of their resource
base. During the Soviet era, farms and other collective
enterprises took care of housing for their employees.
Farms arranged services such as shops and schools;
the farm was actually more like a family village.
Employees
still live in the same houses, but, with privatization,
some of those houses have now become private property.
Under the new market system, people must find some
activity beyond farming to support themselves. Competition,
efficiency, and quality are not only new words but
new ways of thinking during the post-Communist transition.
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