There was a time when Russia had a very developed industry. After World War II, the country was turned into ashes and people had to work day and night to restore the economy. That time Russia didn’t have much experience in development of industrial manufacturing, because it had been an agricultural country for many centuries before the October Revolution. So development of the economy took a wrong turn. In the USSR all the factories and plants belonged to the state, and each year ministers introduced a centralized plan of economic development, including amount of goods that should be produced and their prices. That plan had a law status and factories should follow it strictly. The main attention was paid to the A – industries (producing means of production and consumer goods). The B-industries (producing consumer goods) were financed by a residual principal, that’s why there was a lack of merchandise in the Soviet Union. Factories and plants were interested only in the quantity of their production, but not in quality, because any goods were hard to get and they were in demand anyways. However, some plants had very good quality control systems in 1960-1970’s in Saratov, Yaroslavl and some other cities. The country had a highly developed heavy and weapon production industry.

The whole system of so called “scientific research institutes” and other scientific establishments worked for it. Many inventions were made by them: the first Atomic Electro Station in Obninsk in 1954, the first Atomic-Powered Vessel, Lenin in 1959, the first jet-propelled aircraft, TU-104 in 1956, the first earth satellite, Sputnik in 1957, and many others, especially in the sphere of weapons. The hydroelectric power stations, the biggest in the world, were built in Siberia. In 1961, the first space flight took place in the USSR. The country had a great economic growth but it was mostly extensive due to the building of new factories and plants. At the same time the production of labor was declining. People had pretty small wages and salaries and the amount of money they got depended mostly on their working length, not on their productivity. It was getting more and more difficult to get consumer goods. People had to stay in lines inside of shops for several hours a day. The government even had to buy the products abroad in other socialist countries through spending money from selling weapons and natural resources.

Russian consumer production started to lag behind the foreign ones because of a lack of finances. Great scientific and technological achievements were used mostly in A-industries. Eventually the country had to buy foreign patented technologies for producing cars, furniture and so on in Western Europe. For example, the most popular Russian car, the Lada, is an old model bought from the Italian company “FIAT”. The directive prices of goods were very cheep, close to their wholesale price that made their production unprofitable. All mentioned above led the country into an economic crises by the end of the 1980’s. That time its borders were opened for import and various foreign products that were better and more competitive than domestic ones, flooded the Russian market. Many domestic companies closed during that time and their workers became unemployed. In the beginning of the 1990’s, the government turned the bigger part of Russian industry into private property to make them more effective, but it didn’t help.

Today Russia is still facing many problems concerning production, structural and investment policy. The transitional period from the directive to the market economy is marked by negative factors: high inflation and unemployment, small businesses are levied by high taxes, and big enterprises have become bankrupt. The businesses can’t compete with foreign rivals because their technology is too old and they can’t afford anything new. Some economic laws don’t work right. Huge plants cover kilometers of Russian cities with empty old buildings that do not work. However the situation is getting better. The rates of inflation have been stabilized. We can see an economic growth in light and nutrition industries that produce a wide variety of goods now. Russia still has highly developed scientific and research system which is working for foreign customers nowadays (even for Japanese and German companies).

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