City of Chelyabinsk

This information below is provided by the Division of Wide Area Networking Technologies at Southern Ural State University and the Regional Center of FREEnet. For more information, please visit The City of Chelyabinsk at www.urc.ac.ru/~dl/

General Information

Chelyabinsk is the major industrial, scientific, and cultural center of the southern Urals. The city is located on the eastern slope of the Ural Mountains (55°03'-55°19' north latitude, 61°08'-61°17' east longitude) along the banks of the Miass River and bordered by pine forests to the west and to the north.

The city is slightly hilly in the west, gradually descending to the east and sectioned by the Miass River Valley, lakes, and marshes. The Miass flows past the Shershni reservoir, which lies in the southwest of the city, and its banks are lined by trees and shrubs. In addition to these bodies of water, Chelyabinsk is surrounded by three lakes: Pervoye to the northeast, and Smolino and Sineglazovo to the south.

As a result of Russian colonization of the southern Urals, Chelyabinsk first appeared as a military fortress in 1736. In 1781, Chelyabinsk gained status as a city, and in 1934 status as the capital of Chelyabinsk Oblast.

Chelyabinsk is one of the major industrial centers of Russia. Metal products made here are well-known in all regions of the former Soviet Union. They are purchased by about 100 countries throughout the world. This city produces nearly one-fifth of the Russian output of big-bore pipes, one-third of smelted ferroalloys and ball-bearing steel, over 60 per cent of stainless steel, and about 40 per cent of road-building machines. During World War II, famous Katyusha's and T-34 tanks were produced only in Chelyabinsk (which was named "Tankograd" at that time).

There are seven institutions of higher education, 169 schools, lyceums and community colleges and 14 music and art schools in Chelyabinsk. Approximately 35 thousand students study in the various institutes and universities (Southern Ural State University, the Agrotechnical University, the Medical Institute, the Pedagogical University, Chelyabinsk University, the Institute of Culture and Arts and the Institute of Physical Education).

Chelyabinsk has five state and four municipal theaters, a philharmonic hall, an organ hall, a municipal jazz center, a modern art center, an art gallery, several museums, several local television and radio stations and nineteen movie theaters.

Chelyabinsk is a major transport junction. It is crossed by the railway line Moscow - Samara - Irkutsk - Vladivostok. Highways connect the city to the Central Ural Region, the Bashkir Autonomous Republic and Kazakhstan.

The city's public transport system consists of trams (19 routes), trolleybuses (21 routes), and buses. A subway is currently under construction.

Economic History of Chelyabinsk

Chelyabinsk was primarily a merchant city until the 1917 Revolution. Four trade fairs per year passed through Chelyabinsk and there were functioning bazaars and shops. At the beginning of the twentieth century, Chelyabinsk was ranked second in the Russian Empire in the tea trade. The prominent Russian tea firms, Vyisotskyi and Co., A. Kyznetsov heir to Gybkin, and others operated in Chelyabinsk. Additionally, there was developed trade in grains, buckshots and agricultural equipment. Banks were also well represented in Chelyabinsk including the State, Russian Trading-Industrial, United, and Northern banks. Gold mining began to develop by the mid-nineteenth century.

Several factories were represented in industry. Among them, the major factories included V.G. Stell and Co., which produced plows and other agricultural equipment and Matinov's buckshot factory.

An upheaval in the economic structure of the city took place in the 1920s-1930s when major tractor, electrical-metallurgical, and machine-building plants were built here.

The industrial strength of Chelyabinsk grew even more with the onset of the Second World War and the opening of a metallurgical combine and a watch factory. Today, Chelyabinsk is one of the most important industrial centers in the Urals.

Pre-revolutionary transportation was primarily the horse and buggy. In 1925, buses were introduced; in 1932, trams; and in 1943, trolleybuses. A subway has been under construction since 1992.

International Programs

A number of programs sponsored by state organizations and private enterprises of the U.S. and Western Europe have been established in the Chelyabinsk Region. The American Business Center has been established in Chelyabinsk. Due to the high level of activity of the newly opened U.S. Consulate in Ekaterinburg as well as the American Business Center, enterprises, organizations and individuals can participate in the different programs funded by the U.S. Information Agency and the Agency of International Development via non-governmental foundations.

Various programs include the Edmund Muskie fellowship program, envisaging study in American universities leading to a Master's Degree; the Program of the Senior Staff Hands-on Training in the sphere of economic development of the National "Forum" Foundation; the program supporting the development of minor and medium enterprise sector, "Partnership" ("Business for Russia"); and the Kochran program of technical training of the personnel in agriculture, to name a few. Besides encouraging educational and cultural programs, there have been initiated strictly specialized research projects for scientists of both countries, in the realm of bio-medical research, in particular directed by the U.S. National Institute of Health.

Two projects in the energy sector have been implemented within the framework of the technical assistance to the CIS (TACIS), coordinated by the European Community. Recipients are the Joint Stock Company "Mechel" and the Producing Association "Uralautotrail". There also has been held a seminar on energy conservation with the participation of the German company "AGIPLAN".

At present, the following TACIS projects are being implemented in the region:

* Rendering of post-privatization assistance to the Ural region enterprises;

* technical assistance aimed at the establishment of a Network of Agencies of minor and medium-sized enterprises development;

* Model Farm Management on newly privatized farms.

The Ural Venture Fund aimed at attracting investments into minor and medium-sized enterprise development has been established by the fast evolving "Flemings" investment bank and the European Bank of Reconstruction and Development.

Investment Climate

The Russian economy in general and the economy of the Chelyabinsk Region in particular are in disarray. Lack of investment capital is one of the reasons for this. From 1992 to 1994 there was an a downturn of capital investment in economic development. The sum stipulated for industrial needs in 1994 amounted to 59% of the total volume of capital investments. A substantial portion was injected into the development of ventures with the mixed type of property (mixed private and government funding).

Of all inputs allotted for the public needs, municipal construction and health protection have been defined recently as priority sectors to receive investment. Internal funds of enterprises and organizations (73.6% of the total investment volume ) are the main source of capital investment in the economy of the region. Centralized resources are not very extensive (only 8.5%), and investments are mainly derived from the local budget.

The main objective of the small entrepreneurship policy at the regional level is to create the most favorable economic and organizational conditions for the establishment of attractive infrastructure, providing efficient growth for small business. From 1993, annually certain sums are allotted from the regional budget as financial incentive for contender entrepreneur projects identified as priority for the region, to be more precise - in consumer goods and foodstuffs, medical equipment and ecological reclamation.

In 1995 the Regional Administration adopted "The Program of state support for small entrepreneurs for the period of 1995-96." The Informational Analytical Center has been established in the region for providing and disseminating data available. "The Agency of Support for Entrepreneurship and Investment Attraction" has been founded in order to provide training and extensive consulting services, to make an examination of entrepreneur programs and projects, and to render assistance for small enterprises.

In addition, the Administration finances enterprise participation in various shows and presentations in Russia and abroad, and organizes seminars with competent professionals. To attract foreign investors the Administration of the Chelyabinsk Region shows a keen interest in organization and participation in seminars aimed at facilitating contacts between local and foreign businessmen. No efforts are spared by the Administration in attracting foreign investments into the economy of the region.

By January 1, 1997 in the Chelyabinsk Region there have been set up 520 enterprises with foreign investments, half of them are invested in production.

The Administration organizes presentations of the Chelyabinsk Region abroad to attract investors. Such Presentations have already been held in Vienna, Duesseldorf, Paris, Tel-Aviv and London. The conference "Investment Capacity of the Chelyabinsk Region" was held in Washington D.C. The delegation of the Chelyabinsk Region-the only one from Russia- took part in the Third World Congress of economic development in Madrid.

The most appealing investments for foreigners so far have been in ferrous metals enterprises, transport, trading, and telecommunications. Foreign investments are coming from many countries, but those from Germany, Canada, Switzerland and Great Britain predominate.

Ernst & Young recently conducted a study, "Investment Opportunities in the Chelyabinsk Region", and made recommendations on the region's economy.

According to the research "Regional Risks in Russia", carried out by the Bank of Austria in 1995, the Chelyabinsk Region is among the first five regions among 88 Russian regions with the most favorable investment climate for both domestic and foreign investors.

Investment Survey

On the territory of Chelyabinsk about 160 foreign investment enterprises are registered. This number includes 60 enterprises of the former USSR. The total output (goods and services) of foreign investment enterprises was 527 bn roubles. Of that sum 58 bn roubles (11%) was the output of enterprises using investment from parts of former USSR and 468 bn roubles (89%) from other foreign countries. About 392 tons of cargo were transported, the freight turn-over was about 2 mn. km. About 21 km of automobile roads with hard surface were put into commission. 56% of these enterprises worked in the sphere of trade and public catering, 14% - in industry, 8% - in construction. Industrial enterprises produced goods and services to the total sum of 290 bn roubles. Enterprises of ferrous metallurgy have the largest share in producing goods and services - 71%. The largest producer in the branch is the joint company "Taganai - Metall - Verke", which produced 140.000 tons of steel.

In 1996 foreign trade turn-over of joint and foreign companies was $21 mn. Enterprises using foreign investment have exported goods to the total sum of $9 mn. The general volume of export consists of: coke - 38%, ferrous metal - 87%, nitric fertilizers - 18%. The volume of enterprises using investment from nearest abroad was $1 mn. (9%), from other foreign countries $8 mn (91%). The greatest number of goods was exported to Turkey, GB, Germany. Joint and foreign companies imported goods and services to a total sum of $12 mn. That is the volume of goods imported by enterprises using investments from countries of CIS was $6 mn. (45%), from other foreign countries - $7 mn. (55%). Goods from far abroad had the greatest share (55%) in the total volume of import. Among the countries of CIS Belarus was the leader (78%). Joint and foreign companies sold goods to a total sum of 58 bn roubles. Turnover in the sphere of public catering was 2 bn roubles. The wholesale trade of goods having industrial and technical purpose - 362 bn roubles, consumer goods - 100 bn roubles. Average number of workers employed by joint and foreign enterprises is 4,517 people. Average monthly salary per one worker was increased to 1 mn roubles.r

Source: The following information was provided by official site of the City of Chelyabinsk. You can visit their web site at www.chelyabinsk.ru

A Tank Building Town

The high level of militarization of its economy won Chelyabinsk acclaim and the name of "Tankograd" (tank building town) during the Second World War. Within a month, we organized the manufacturing of the legendary T-34 tanks. Industrial output increased by a factor of six compared to the pre-war level of production. Our militarized economy has not liabilities, but assets nowadays. Our long-term orientation of turning out of hi-tech military hardware has lead to the selection and concentration of Russia's most highly trained personnel in Chelyabinsk and rendered them capable of filling any order on a competitive basis.

The availability of raw materials, fuel and power-producing basis, as well cheap but skilled manpower has drawn to Chelyabinsk the attention of Russian and foreign investors. The implementation of economic reforms has put the industry of Chelyabinsk and that of the Southern Urals in an extremely difficult situation. A decline in industrial output affected practically every industry, especially metallurgy, machine building, food production and the chemical industry. Production was also crippled by the severance of ties which for years had been established between enterprises, regions and republics of the former USSR. Inflation, ever-growing transportation costs and higher fuel prices add to the industrial crisis in the Urals. However, the high industrial potential of Chelyabinsk ensures its further development in the near future.

Political and economic changes have contributed to the emergence and rapid development of new forms of property in Chelyabinsk. According to experts of the Russian Government, privatization in Chelyabinsk is being implemented at a higher rate as compared to other regions. What the economy of Chelyabinsk needs most now and what will do the job is investments protected by law and close ties with Russia and foreign partners. This will facilitate industrial development of the city based on the utilization of up-to-date technologies and the manufacturing of goods competitive in the word market.r

Source: The following information was provided by official site of the City of Chelyabinsk. You can visit their web site at www.chelyabinsk.ru

Population and Demography

The first census of Chelyabinsk was taken at the end of 1739. At that time, 1,060 people lived in the fortress. By 1916 that number grew to 67,304; and by 1994, to over 1 million.

Right up to the 19th century, the population of the city was homogeneous for the most part, primarily Russian. With the inclusion of Chelyabinsk in the Samara-Zlatoust and trans-Siberian railroad lines, different ethnic groups, in significant numbers, began to settle here, including groups of Tatar-Bashkir, Polish and Jewish populations. The 1916 census recorded thirty different ethnic groups residing in Chelyabinsk. As of 1989, there were 100 ethnic groups were represented in the population.

Until the mid-19th century, Cossacks inhabited the city as well, but were resettled to outlying areas for economic reasons.

Nature Around Chelyabinsk

Mountains, lakes, forests. . .Perhaps, they are the most typical features of the South-Urals natural environment. The natural beauty is capable of winning everyone's heart.

There are more than 2000 lakes in Chelyabinsk Oblast. The Russian landscape of plains and ones bordered with mountains creates imposing and unforgettable pictures. Pearls of the region are lakes Turgoyak and Uvil'dy. Their water is warm down to a depth of 10-12 meters. You can reach them as well as other interesting and picturesque places in 1-2 hours by car from the city.

The most joyful and, at the same time, sorrowful thing is that nature is alive despite so much environmental abuse over the last 25-30 years.

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