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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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