Moscow: Processes of restructuring in the post-Soviet metropolitan periphery

Cities, Vol. 22, No. 2, p. 135–150, 2005

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Moscow: Processes ofrestructuring in the post-Sovietmetropolitan peripheryRobert Rudolph *, Isolde BradeLeibniz-Institut fur Landerkunde, Schongauerstr. 9, D-04299 Leipzig, Germany

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Available online 5 March 2005

During the 20th century, Moscow changed from being a one million person city in Russia tothe largest European urban agglomeration. The growth and urbanization processes were par-ticularly strong during the Soviet period. At the beginning of the 1990s, new forms of politicaland economic regulation were established, which were accompanied by new spatial structures.Moscow and its periphery were subjected to new tendencies of spatial differentiation andpolarization. The paper analyzes the new post-Soviet developments in the periphery of theMoscow metropolitan area.� 2005 Elsevier Ltd. All rights reserved.

Keywords: Regulation, spatial structures, polarization, metropolitan development, Russia

Basic features of urban development

In the 20th century, the functional dominance ofMoscow within the Russian urban system becamevery apparent. Moscow was not only the place wherepolitical, administrative and economic power was lo-cated, it was also a model of civilization for the wholecountry. This constellation led to a very pronouncedcentre-periphery antagonism, which can be visual-ized in the image of Moscow as the centre of thecountry, surrounded by a dependent periphery. Withthe onset of Stalinist industrialization from the late1920s onwards, theMoscow region was subject to tre-mendous processes of growth and urbanization. Theavailability of housing, and the development of infra-structure in Moscow, was insufficient to meet themassive population growth of the 1930s. At the endof the 1920s, the average annual population growthwas 6%, a figure equivalent to the growth rates ofthe megacities in developing countries today. Thefirst General Plan for the restructuring of Moscow,from 1935, marks the beginning of a systematic anddenser development of the city. Moscow was increas-ingly remodelled in accordance with the characteris-

nding author. Tel.: +49-0341-978-65-02; fax: +49-0341-e-mail: [email protected]

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tic formal elements of socialist urban development inits Stalin era variant, in that large neo-classical build-ings and boulevards, for instance, began to informthe image of the city. However, it was only in the1960s that the extensive expansion of the city, andthe construction of ever larger-scale housing devel-opments on the periphery of the city, and in thetowns of the urban hinterland, became the dominantfeatures of spatial development. Most of the exten-sive industrial zones on the fringes of the inner city,some of which dated from the 19th century, retainedtheir function, but in the periphery of Moscow and inthe surrounding towns, an ever increasing number oflarge new industrial sites, research and productioncomplexes, as well as their associated housing es-tates, were constructed.The development of the Moscow region into the

administrative, scientific and industrial centre ofthe country, as well as the huge influx of population,led to a rapid urbanization of the region, yet at thesame time there continued to be areas within the ur-ban region that were hardly urbanized at all. Plan-ners were continually attempting to limit thegrowth of the agglomeration, and transfer industryfrom the inner city to the periphery outside Moscow,but these efforts were unsuccessful in the main(Alden et al., 1998; Glushkova, 1999).

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Moscow: Robert Rudolph and Isolde Brade

The macro-structure of the Moscow urban region

A radial-concentric macro-structure that developedover long periods of time constitutes the underlyingpattern of urban growth in the region. The centrifu-gal expansion of the area of settlement since the1930s saw the extension of this characteristic ra-dial-concentric spatial pattern to the entire region(see Figure 1).

� The city centre: The most important structuralelement in the delimitation of the city centre ofMoscow is the inner ring road, known as the‘‘garden ring’’. However, the administrationdefines the central city as co-determinate withthe central municipal district, which extendsbeyond the garden ring.

� The compact city: Currently, a new motorwayorbital, dubbed the 3rd ring, and due forcompletion in 2005 is under construction withinMoscow (Argenbright, 2003). This ring encirclesthe entire city centre and most of the centralmunicipal district. The territory within the3rd ring basically comprises pre-1940s develop-ment, typically comparatively densely builtareas with a good transport infrastructure. Thearea within the 3rd ring is defined here as thecompact city within the wider urban region.Nonetheless, the compact city represents onlyabout 6% of the total administrative area ofMoscow city.

� The inner periphery: The areas that stretch fromthe edge of the compact city to the Moscowmotorway orbital (MKAD)1 form the innerperiphery of Moscow. Here, large areas, whichreach right up to the Moscow orbital, are givenover to industrial use, transport infrastructure,and mixed uses, and there are also extensivegreen spaces as well as huge, high-rise housingdevelopments, in which the majority of Musco-vites live.

� The outer periphery: The current administrativeboundary between Moscow and Moscow oblastfollows, for the most part, this motorway orbital,which was completed in the early 1960s and rep-resents a significant boundary of urban develop-ment. Originally, the Moscow orbital was tomark the definitive administrative boundary ofMoscow. The outer periphery of Moscow is com-posed of adjoining towns and districts (rayony) inMoscow oblast, which lie outside the MKAD.This zone has also been termed the ‘‘forest pro-tection zone’’ or ‘‘buffer zone’’ (Baburin et al.,1987), because according to the original plans,its function was to compensate for the pressuresof the Moscow agglomeration on the natural

1 In Russian: Moskovskaya kol�zovaya avtomobil�naya doroga.

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environment. Since then, however, large partsof the forest belt have been spoiled by over-development.

� The Moscow urban region: The city of Moscowand the adjoining belt of towns and districts inMoscow oblast form the Moscow urban region.This is the term used in this text. According tothe Russian national census in 2002, Moscowhad 10.1 million inhabitants, and the Moscowoblast approximately 6.62 million. The populationof the zone closest to the city (outer periphery)was about 1.8 million, that of the urban region(Moscow plus the outer periphery) was thusapproximately 11.9 million.

The massive territorial expansion of Moscow andthe urbanization of the region during the Soviet per-iod led to an increase in the residential population,and the formation of industrial agglomerations out-side the compact city. The development axes ofthe Stalin era, which tend to radiate outwards fromthe city centre, exhibit urban qualities that are lack-ing in later phases of urban development. This re-lates to building density, the compactness,functional mix and lavish styling of the buildings.The extensive growth of the Moscow region alteredthe nature of settlements located directly on the cityboundary, as these became the sites of large housingdevelopments and industrial zones.The towns adjoining Moscow are—in functional

terms and as regards urban development—directcontinuations of development axes originatingwithin the city. Some of these are highly specializedsettlements, where research-intensive and techno-logical industries, such as nuclear research, and avi-ation and aerospace technology, form the social andeconomic base. From the 1930s onwards, but mainlyafter the 2nd World War, a great number of whathave been termed ‘‘scientific towns’’ were estab-lished around Moscow. The manufacturing andresearch-intensive enterprises with their accompany-ing housing estates represented a particular form ofmonostructural town. In contrast, other towns of theMoscow urban region were pure ‘‘dormitory towns’’,from which the residents commuted daily to work inMoscow. The dramatic growth experienced by thetowns in the outer periphery of the urban regionduring the Soviet period was due, in particular, tostringent administrative restrictions (propiska) onmigration to Moscow.2 Those people, who workedin Moscow, but did not have the right to residethere, settled nearby in the urban field.As a whole, the outer periphery was characterized

by a combination of urbanized zones in the form ofsettlement and transport axes, recreation areas and

2Te propiska is still very important and leads to all sorts of ‘‘gray’’economic activity and rackets by �illegals�.

Figure 1 Moscow and its urban field: delimiting the city core and the periphery using administrative subdivisions andspatial categories relating to settlement structure.


summer house colonies, zones with primarily mili-tary usages, as well as extensive forests and ruralareas with traditional villages. Due to far-reachingprocesses of deconcentration, the high populationdensity of the compact city was in continual declineduring the second half of the 20th century, falling toaround 10,000 inhabitants per km2 in 1992 (Mos-gorkomstat, 2001). At the same time, a concentra-tion of the population in the periphery occurred.The inner and outer periphery of Moscow, the

so-called suburban area, was characterized as fol-lows: from the 1970s, the areas with the greatest

population density were no longer to be found inthe centre but in the high-rise housing develop-ments on the edge of the city, i.e., in the innerperiphery (Lappo, 1997). The growth of the hugehigh-rise housing developments in the peripherywas due, in part, to intra-urban migration fromthe compact city but was especially attributableto high levels of migration from other parts ofthe Soviet Union. Despite strict controls onmigration, it proved impossible to stem the flowof migration to Moscow permanently, or effec-tively limit the growth of the agglomeration. The

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provision of services and infrastructure for thelarge, high-rise housing estates was insufficientand transport routes to the centre were underde-veloped and overstretched. Although the suburbanstructures of Moscow�s urban field differ consider-ably from the belts of detached, semi-detachedand terraced housing found in the urban regionsof Western Europe, the dacha—a garden or sum-mer house outside the city—plays an importantrole in the consciousness of Muscovites as a sym-bol of collective affluence. The intensity withwhich, and the scale of which, the unrestrictedconstruction of seasonal settlements occurredwithin the urban field over a period of severaldecades, permits us to speak of a specifically‘‘socialist suburbanization’’, which differs signifi-cantly from Western-style suburbanization (Bradeand Nefedova, 1998; Nefedova et al., 2001).

Figure 2 The distribution of investment in property byward 1995–2000. Source: (Mosgorkomstat, 2001), authors�own calculations.

The post-Soviet periphery of Moscow—a new phaseof development?

The transformation of the economy and society, aswell as the increasing integration of Russia into theglobal economy, have far-reaching and complex con-sequences for the development of the entire urbanregion: thus both structural continuities and whollynew forms of regulation can be observed that areconnected to the emergence of new spatial structures(Argenbright, 1999; Rudolph, 2002). The varyingeconomic processes and growth rates in the constitu-ent parts of the urban region led in the first instanceto polarization processes between the centre and theperiphery. The limited investment capability of theRussian economy, coupled with the uncertainmacro-economic environment of the 1990s, meantthat the majority of investment was confined to justa few selected spheres. Property in the centre of Mos-cow, where the return on capital invested in officespace exceeded 20%, was one of such areas (Ru-dolph, 2001; Jones Lang LaSalle, 2002a).The concentration of international, and economi-

cally successful Russian concerns in Moscow, whichforms the basis for a business community that is glo-bal in orientation, was associated with large-scaleinvestment that brought about the redevelopmentof locations and entire districts in the compact city.The reconfiguration of spatial and functional struc-tures in the city centre, which had begun in Soviettimes, accelerated. The population continued to de-cline, simple supply functions were displaced fromthe city centre, and usages typical of the central busi-ness district began to take over. Statistics indicatethat between 1995 and 2000, approximately 67% ofall investment in the city was made in the centralmunicipal district (Figure 2). The official figure fortotal employment in the compact city (central muni-cipal district) rose by 21% between 1991 and 2000,whilst for the inner periphery it declined by 13%(Mosgorkomstat, 2001).

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At the end of the 1990s, between 650,000 and700,000 people from the Moscow oblast were com-muting to work in Moscow every day, mainly onthe suburban railways, while 200,000 Muscoviteswere commuting in the opposite direction (Figure2). Today there are huge spatial disparities in thedistribution of jobs. In Moscow, the number of jobsby far exceeds the available labour force, making theMoscow labour market very attractive, not just with-in Russia but beyond the national borders as well(Rudolph, 2002). In contrast, the labour market inMoscow oblast provides limited opportunities, withsubstantial variation between localities. This resultsin long distance centripetal commuter flows. WithinMoscow, there is a massive surplus of jobs in thecompact city, where 26% of all jobs in Moscowand 23% of all jobs in the urban region are to befound.

Factors and processes influencing developmentsin the periphery

The administrative framework and actors regulating

Local and regional power structures in Russia arebased on a presidential-authoritarian model, inwhich the governor or the respective head of the lo-cal administration is assigned an especially impor-tant role. During the 1990s, the city of Moscowadministration, under the leadership of a powerful


mayor with architectural ambitions and grand plansfor urban development, Yuri Luzhkov, managed toassert its political power to great effect against thestate institutions, and thus to exert a strong influenceon the privatization of state assets. The mayor ofMoscow�s drive for influence on a national scaleexemplifies the conflict that results from the histori-cal understanding that the ruler of Moscow is the ru-ler of Russia. The mayor used urban development toenhance his political powers. He personally inter-vened in spectacular projects, e.g., the reconstruc-tion of the cathedral Christ the Redeemer, thepompous subterranean mall at the Manege squareand the new retail and business centre ‘‘MoscowCity’’. The planning regulations and urban develop-ment controls, including construction and architec-tural details, are very strict.The administration is much more powerful than

the legislature, and there is no independent adminis-trative court, so it is difficult to hold the administra-tion effectively to account. The merging of theinterests of political actors (administration and localauthority) and economic counterparts is typical ofthe power structure at the regional and local level.Amongst the most important actors involved ininvestment activities in both Moscow and Moscowoblast are certain finance and industrial groups,including oil and gas concerns, construction firmsand banking consortiums, which determine thestructure of the built environment in their capacityas strategic investors. Other groups, such as variousassociations, the military and large agriculturalenterprises, also attempt to stamp their own inter-ests on space.The policy objective of the city administration,

that Moscow should become a ‘‘global city’’ withan internationally oriented business infrastructure,is reflected in the new General Plan for Moscow(Kuzmin, 2001). The 1999 General Plan is a long-term plan for urban development that should remainvalid until 2020. The planning guidelines containedin the document apply to the entire urban region,and so also affect the adjoining towns and districtsof Moscow oblast. A traditionally very sector-ori-ented style of planning has been replaced by inte-grated, cross-sectional planning, in which limits ongrowth, the sustainability of development, the moreintensive use of space in housing developments, therelocation of industry to the periphery, and the def-inition of higher and lower order centres within theurban region are all key strategic elements. This rep-resents a rejection of the previous principle of exten-sive urban development. The city centre is to bestrengthened in its role as a political, economicand cultural centre, and as the capital�s ‘‘historic cit-adel’’ through the preservation of the historic build-ings, and the development of the service sector andmanagement functions. Nine municipal districts (ok-rugi), which are in turn subdivided into 123 wards,make up the local authority level in the city of Mos-

cow. The administrations of the municipal districtsare merely executive instruments of the city admin-istration. The prefects are appointed by the mayor.In Moscow oblast, territory is organized administra-tively into districts and towns that are districts intheir own right, which also perform the functionsof local self-government. In the early 1990s, thetowns and districts in the oblast began, for the firsttime, to establish their own structures of local self-government. In Moscow oblast, many towns optedout of the administrative control of the districts,and are directly subordinate to the oblast adminis-tration. Whilst the towns that remain under the con-trol of the district administrations have a ‘‘towncouncil’’ (gorsovet), they have neither their ownbudget nor do they possess any assets. On the wholehowever, the districts of Moscow oblast have rela-tively little influence on local economic develop-ment, because major economic actors operate atthe level of the governor, thus strategic investorsnegotiate in the first instance with the governor ofMoscow oblast.There are pronounced tensions and conflicts be-

tween the city of Moscow and Moscow oblast overthe use of resources in the urban field, for exampleover control of the airports. The potential for con-flict also exists with respect to new industrial loca-tions in certain towns and districts that adjoin thecity of Moscow, that is in those local authorities thatprofit the most from the forceful attraction of theMoscow economy. This conflict potential relates pri-marily to territorial issues regarding the administra-tive boundary between the two federal subjects onthe motorway orbital (MKAD), which has becomean increasingly dynamic investment zone since thelate 1990s.It is very clear that the objectives of the General

Plan have been undermined by local interests. Thisapplies in particular to housing construction, whichcontinues unabated in the urban field. Furthermore,new residential developments are also encroachingon the green axes within Moscow, especially in thewestern and southwestern parts. Large new develop-ments are planned in areas that, according to theGeneral Plan, should actually be reserved for con-servation. Due to the ability of interest groups to as-sert themselves within the administration, as well asthe non-transparency and limited contestability ofadministrative decisions, the General Plan has, de-spite its forward-looking objectives, proved to be adocument of relatively little binding force that is eas-ily ignored or modified by the administration.

Social processes

The Moscow urban region is the preferred destina-tion for migration within Russia. From the 1980s on-wards, there was a decline in the numbers ofstatistically recordable inhabitants because of nega-tive natural increase, but since 2000 the population

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has been on the increase again. In particular, the dis-tricts and towns of Moscow oblast that adjoin thecity show substantial inflows of migration, since thestrictly policed policy of compulsory registration(propiska) makes it difficult to settle within the cityboundaries. The sought-after Moscow labour marketis within easy reach of the towns in the urban field.The strong attraction of Moscow for migrants, cou-pled with the administrative barriers to settlement,mean that a large amount of migration takes placein an unregulated and informal sphere. A significantfactor behind recent developments on the peripheryis the post-Soviet processes of social polarization.Although average incomes in Moscow are the high-est in the Russian Federation by far, this masksenormous differences in income within the popula-tion of Moscow. The polarization of incomes has in-creased steadily over the last few years.3 Oneconsequence of social polarization along the linesof income and the property relations is the increas-ing differentiation of social space. A direct resultof social polarization in Moscow region is the emer-gence of an expensively priced segment in the hous-ing market, and the ‘‘elite living’’ category hasbecome a permanent feature of the housing market.Demand for flats in the most expensive price cate-gory, which are located in pre-revolutionary build-ings in the prestigious central districts, comes fromthe new Russian elite and foreign business people.In the periphery also, especially in the clean andlandscaped western part, new, completely fencedoff, self-contained residential complexes with theirown infrastructure and security services are emerg-ing. These gated communities are not an entirelynew phenomenon: in Soviet Moscow privilegedgroups, such as high-ranking party or state officials,the academic and technical elite, or artists, oftenlived in special residential complexes. The post-So-viet gated communities represent the continuity ofsuch residential forms, albeit with inhabitantsbelonging to different social groups (see Figure 3).During the 1990s, settlement growth in the Moscowregion was based, above all, on the unplannedexpansion of the summer house colonies (dachi).In the early 1990s, the ‘‘dachniki’’ were given theopportunity to acquire user rights for the land onwhich their summer houses stood—in spite of theuncertain legal position regarding land rights. Inaddition, land use restrictions were eased or simply

3 In Russia, the Gini-coefficient, a measure of income distribution,is, at 0.4, closer to the figure for the Latin American countries(0.5–0.6 = greater inequality) than that for Western Europe (0.25).In December 2001, the average nominal income in the Federationamounted to 4000 Roubles (approx. US $138), whereas inMoscow, the figure was 16,600 Roubles (US $572) (Golovachev,2002). However, it can be assumed that hidden incomes are farhigher due to the fact that informal economic relations represent asignificant source of income.

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no longer observed. This led not just to the expan-sion of the existing colonies, but to the developmentof new ones too. In the course of the last decade, anew and very exclusive variant of the summer housecolony, the kottedzhi development, has appeared inthe area around Moscow (Brade and Nefedova,1998; Ioffe and Nefedova, 2000). The kottedzhi dif-fer in appearance from the standard dachi in termsof their size and style. Through their sheer size,the most extravagant variants have become symbolicof the rise of the new elite. The most expensive loca-tions for the kottedzhi are also to be found in wes-tern areas of the urban field, close to the city.Thesocial differentiation of post-Soviet society is beingvisibly reproduced in the spatial structures of Mos-cow�s periphery. Suburbanization processes of theWestern type, whereby broad sections of the popula-tion shift their main place of residence and life focusfrom the city to the surrounding countryside, havenot been observed to a significant degree. In addi-tion to the underdeveloped infrastructure of theperiphery, the loss of privileges and of high socialstatus that being a Muscovite affords represents amajor psychological barrier to moving outside thecity boundaries (Novomlinskaya, 1997).The 1999General Plan envisages a transition from an exten-sive to an intensive use of space, where the use offurther territory is avoided, and the developmentof the Moscow urban region occurs in a manner thatconserves resources. But these planning goals areundermined by processes at the local level that eventhe authorities in Moscow cannot control. In fact,there has been an extraordinary acceleration of theprocesses of urban sprawl in the area around the cityduring the course of the 1990s, which has furtherfrustrated several decades worth of efforts to limitsettlement growth.

Economic factors—characteristics of the ‘‘economyunder transformation’’

The economic development of the Moscow regionduring the 1990s has been informed by massive dein-dustrialization, rapid tertiarization, and the extre-mely dynamic development of the small businesssector (Kolossov et al., 2002; Gritsai and van derWusten, 2000). Within just 6 years, total industrialoutput shrank to 37% and 43% of the 1990 levelsin Moscow and Moscow oblast, respectively(Goskomstat Rossii, 1999, 2000). Unlike in most re-gions of Russia, investment and the economy in theMoscow urban region were already showing signs ofsuccessful development just a few years after thestart of liberalization. The rapid growth of smallbusinesses in the 1990s was mainly due to the effectof ‘‘informal’’ economic relations on the micro-level,because there was not yet a political framework forthe regulation of the economy and market economyinstitutions were absent. Structural change from anindustrial to a tertiary economy was accompanied

Figure 3 The spatial differentiation of apartment prices in Moscow in 1999. Source: Monitoring rynka nedvizhimosti 1999,No. 1.


by processes of differentiation within the tertiarysector. A significant portion of the newly establishedsmall businesses had only a low level of investment.The quick ‘‘improvization’’ of ‘‘capitalism withoutcapital’’ (‘‘low-level sector’’) represented a survivalstrategy for many people, at a time when systemsfor the provision of social welfare were breakingdown. The emerging structures of small businessmade a crucial contribution to constituting a newsystem for regulating the economy on the local andregional level. Many of the new small businessesemerged out of large industrial enterprises, and have

themselves begun to shape urban space and formtheir own particular structures.Since the late 1990s, a ‘‘high-level’’ tertiary sector

has emerged in Moscow, tied into the global eco-nomic context to a much greater degree and associ-ated with much higher levels of investment. Therapidly growing banking sector, the expansion ofcompanies in the finance and services industries,the financially strong Russian concerns from the pri-mary sector, as well as international companies ac-tive in Moscow, started to determine investmentactivity in the capital, which had lasting effects on

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the spatial structure of the urban region. In respectof regulatory policy, there have been notable devel-opments in the last few years, relating to the estab-lishment of a solid legal framework for economicactivity and the emergence of the institutions of amarket economy. The development of the capacityfor investment in recent years supports the transfor-mation of the ‘‘low-level sector’’ on the micro-level,as well as the integration of the ‘‘informal’’ into the‘‘formal’’ sector. Altered mechanisms of spatialstructuring have also prevailed, whereby ‘‘location’’,due to the privatization of the property sector,increasingly constitutes a factor in market processesand has been given monetary value. Thus, there areindications that a spatial diffusion of high-levelinvestment, which was concentrated in the compactcity during the 1990s, is occurring, and structuralpatterns, which resemble international models, cannow be discerned in the periphery as well. Thesestructures are, as yet, hardly comparable to thegrowth zones in the peripheries of Western urban re-gions, but nonetheless dynamic economic growthcan be observed at particular locations in theperiphery.

4The large oil and gas concerns, which were in a relatively stablesituation even at times of severe economic crisis, are amongst themost important investors in office and retail real estate in theMoscow region.

New processes of spatial differentiation in theperiphery

The inner periphery

The majority of the population of Moscow lives inlarge high-rise housing developments outside thecompact city, in the inner periphery where thereare also a large number of industrial zones. The spa-tial distribution of these zones imposes a sectoralpattern on the concentric macro-structure of the re-gion, leading to significant local differentiation with-in the periphery. Whilst hardly any industrialenterprises are located in the western and south-western sector, and this area is a desirable residen-tial area and a popular place for leisure andrecreation, in the eastern and southeastern sectormost of the territory is given over to industrial uses.Within this general characterization, the southernand northern sectors occupy an intermediary posi-tion, there simple residential functions, as well asindustrial and research complexes are dominant. Inthese sectors, the share of research institutes andindustrial enterprises connected to the armamentsindustry is especially high.The economic development of the inner periphery

during transformation was mainly characterized by afall in the output of industrial enterprises, a massivedecline in manufacturing employment, and phenom-ena of capital decay. The legal status of industrialsites, particularly those used by large enterprises of‘‘national importance’’ (armaments producers), re-mains unresolved. It is these particular sites thatare the subject of wrangling between federal institu-tions and the Moscow administration. Many of these

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enterprises are in dire economic straits and cannotbe salvaged, but their production spaces are fre-quently rented by the new small businesses, whichoften represent the only source of income for thelarge industrial enterprises. The large industrialareas of the inner industrial belt are an impedimentto future urban development. The deindustrializa-tion of the Moscow urban region, which is a neces-sary component of structural change, leaves manyindustrial sites of the previous century as ‘‘brown-field locations’’. The development of the remainingold industrial space in the compact city and innerperiphery into ‘‘business and services zones’’ is a sta-ted aim of the 1999 General Plan (Figure 4). Accord-ing to planning predictions, the ‘‘inner periphery’’ isto become the main focus for construction and infra-structural projects in the medium term, with theredevelopment of old industrial sites receiving par-ticular attention. One massive project to developan office district (Moskva City) on a former indus-trial site is located on the western fringes of the com-pact city. When completed in 2015, this developmentshould provide 2.5 million sq. metres of floor spacefor offices, retailing, hotels and leisure facilities.The industrial upturn at the end of the 1990s has

led, however, to only a partial rejuvenation of oldindustrial locations. The preferred locations fornew industrial plants, especially those constructedwith foreign capital, are greenfield sites. WithinMoscow, there is still sufficient space for new manu-facturing locations, particularly on the outer fringesof the inner periphery. Successful conversion of oldindustrial sites into office and commercial centrestends to be limited to smaller works with good trans-port connections, located close to the compact city.To date however, examples of such promising diver-sification and conversion projects have been few andfar between (see Figure 5).The spread of new business services companies

has led to the intensified sectoral differentiation ofthe various axes within the periphery, although cer-tain structural prerequisites for territorial specializa-tion have developed over a longer period. In thedevelopment axes initiated during the Stalin era,new commercial and office functions are occupyingexisting buildings. Some of the large Russian banks,and oil and gas concerns, have established theirheadquarters in the south western district.4 The mostimportant factors behind their locational preferencefor the southwest are the relatively good ecologicalconditions and the high prestige afforded to thesouthwestern district by the high concentration ofeducational and research establishments, which

Figure 4 Planned restructuring of industrial sites in Moscow according to the General Plan. Source: General Plan for theCity of Moscow 1999, cited after (Kuzmin, 2001).


arose during the Soviet period. The entire westernpart of Moscow is the preferred area for not onlyelite residential developments but also for certainprestige projects planned by the city, such as leisurefacilities and theme parks. The processes of eco-nomic growth in the periphery during the 1990s re-sulted mainly from the ‘‘spontaneous’’ proliferationof small business structures belonging to the retailand services sectors. The ‘‘bazaarization’’ of Mos-cow was the main agent of structural change duringthe first phase of transformation. Quickly erectedopen air and covered markets were oriented spa-tially towards people flows; the preferred locationsbeing on major transportation routes and at metro

stations especially. They lead the way towards con-sumption-oriented tertiarization. On large expansesof open space in the large, high-rise residential areasof the periphery, huge kiosk markets, and open airmarkets selling groceries and other goods, appeared.This ‘‘belated’’ urbanization of the periphery oc-curred in a context of high economic risk. Retailstructures adapted to this situation by keeping thelevel of investment low, choosing locations that re-quired only a low level of investment. Due to the ra-pid proliferation of such structures, the pronouncedshortage of retail space was quickly eliminated, de-spite the general lack of investment. The openair markets, stands and kiosks reacted extremely

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Figure 5 This former textile factory by a metro station in the northern municipal district has become a modern complex, inwhich offices and studios have been filled by small computing companies. The business centre provides office andproduction space, and consists of 11 buildings with a total floor space of about 30,000 m2. The investors are drawn from themanagement of the textile factory. Once rents yield sufficient funds, further buildings are modernized. Photo: (Brade,2001).


flexibly to changing locational conditions. Markettrading was also a primary means for the accumula-tion of capital.In the second half of the 1990s, new forms of

retailing began to develop very dynamically. Rus-sian retail concerns were established that startedto build up networks of branches. In contrast theshare of marketing trading has declined since1998 (Figure 6). At the end of the decade, though,malls, car show rooms and supermarkets had

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spread in increasing numbers to the periphery.The Moscow administration pursued a repressivepolicy towards the open air markets, with theobjective of gradually transforming them into more‘‘civilized’’ forms of retailing that would be morecompatible with the ideal of Moscow as a ‘‘globalcity’’ (Averbukh et al., 2000). The opening of shop-ping centres in the periphery is one of the mostsignificant trends in retail development since1999, and both Russian and international retailers

Figure 6 The development of the sales space of open airmarkets in Moscow 1992–2001 in 1000 m2. Source: (JonesLang LaSalle, 2002a).


were actively involved in the development of newretail locations in the periphery of Moscow. Atthe end of the 1990s, the following types oflarge-scale retail location dominated the Moscowperiphery:

� Open air and kiosk markets: much of the activityin these markets should be classified as part of theinformal sector, and they are often controlled bydifferent ethnic groups.

� Covered markets with stands in converted build-ings (production sheds and sports centres). Theseare often closely linked to nearby open air mar-kets (Figure 7).

� Specialist trade centres (torgovye centry) in pur-pose-built facilities. The precursors of these tradecentres were often kiosk markets, the owners ofwhich gradually began to construct premises, inwhich they leased shops.

� New arcades with individual, and mainly high-sta-tus outlets. Originally, this type was confined tothe compact city, and started to spread to theperiphery only after 1999.

� Large-scale Western-style retail complexes(supermarkets, car showrooms).

The Moscow Motorway Orbital (MKAD) and theouter periphery

With the construction of the first large Western-stylefurnishing house in the spring of 2000, the prolifera-tion of large scale retail premises (big boxes) reachedMoscow oblast. To an even greater extent than thenew malls and shopping centres, the premises of thelarge international retailers tend to be located closeto the Moscow orbital, which, within the space of justa few years, has become the most important invest-ment zone outside the compact city. Although by

the late 1990s some large, exclusively Russian ownedfurniture and furnishing stores (GRAND, TVOIDOM and TRI KITA) were already present in theMoscow periphery, from 2000 onwards investmentactivity was increasingly determined by Westerncompanies (IKEA, METRO and AUCHAN). Atthe same time though, the rate of investment by Rus-sian companies did not slow (Figure 8).At the start of this transformation, the emer-

gence of trade based on a low level of investmentcould also be observed in areas close to themotorway orbital. In particular, open air marketsfor construction goods, and used cars, as well aswholesale markets are still the characteristic tradestructures at the intersections of the MKAD withradial transport axes. The siting of trade at theselocations was mostly unplanned, but the furthercommercial development of these locations wasnonetheless determined, in part by their previousfunctions, albeit on a much larger scale. Theinvestment upturn after 2000 led to a change inthe nature of trade concentration in the vicinityof the motorway orbital. In particular, the conver-sion of the basic markets into more capital-inten-sive business forms is a significant developmentof the past two years. This primarily concernsthe large retail centres, new supermarkets, DIYstores and builders� merchants, car showrooms,furnishing stores and malls. However, open airmarkets continue to open close to the motorwayorbital, mainly due to their displacement fromthe compact city (Figure 9).The upturn in retail investment during the past

few years has several causes:

� In addition to the noticeable macro-economicconsolidation since the financial crisis of 1998,the improved regulatory framework, and theabove average increase in real incomes in the cap-ital, during the 1990s Moscow developed into themarket place for the whole country. Moscowaccounted for 5.8% of the population but almost30% of retail turnover in Russia in 2000(Goskomstat Rossii, 2001). This concentration isattributable in part to traders from the Russianregions purchasing their wares in Moscow (Schu-lze et al., 2002).

� Due to the lack of trust in the banking sectorin the wake of several financial crises, the sav-ings level of the population is extraordinarilylow. A comparatively large share of incomeis used for consumption. Flats and detachedhouses (kottedzhi) are of particularly great sig-nificance as relatively safe capital investments.This is manifested in the rampant proliferationof housing development in the urban field, aphenomenon from which all the construction-related industries have profited, experiencingan unparalleled boom during the last fewyears.

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Figure 7 The Konkovo trading centre in the south west of Moscow was established in 1993, and was one of the first openair markets to be converted into a covered market. Photo: (Rudolph, 2000).

Figure 8 The development of sales space in ‘‘modern’’retail (locations with a high-level of investment: arcades,malls, supermarkets, superstores, hypermarkets etc.) in1000 m2 1996–2002 (2002 projected level). Source: (JonesLang LaSalle, 2002a).


� The rapidly increasing levels of car ownershipalso encourage location in the periphery, particu-larly in view of the chronic congestion within thecity. Between 1991 and 2000 the number of carsper 100 inhabitants in Moscow increased from11 to 28 (Argumenty i fakty, No. 45/2001).

The global expansion strategies of the large inter-national retail concerns represent a further factor.

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During the second half of the 1990s large-scale retailagglomerations sprung up in a relatively short spaceof time in the periphery of various East and CentralEuropean capitals. Currently, investment in the �bigboxes� is shifting to cities in the more easterly post-socialist states, including Moscow. The success ofthe first Western furnishing house (IKEA), whereturnover in the first year of its operation exceededexpectations twice over, may have contributed tothis investment boom (Figure 10; Lukyanova andHasbiev, 2001).Commercial activity is also concentrated along the

national trunk roads that radiate from the city. Inthe extensive residential axes especially, first signsof new commercial developments can be observed.In the urban field too, the sites of huge Soviet indus-trial works have been leased by a multitude of smallretail and haulage concerns, as well as manufactur-ing companies. The disintegration of large industrialorganizations and the colonization of their locationsby small businesses is an expression of the spontane-ous structuring of the post-Soviet economy. The up-turn in investment in recent years mainly concernedthe processing industries, such as the food processingand building materials industries. A series of largeinvestments by foreign investors in new industrialplants on greenfield sites in certain towns of Moscowoblast are a significant factor behind the growth ofthe manufacturing sector since the late 1990s. Thequick access to Moscow is an important locationalfactor for companies, as are the lower costs of locat-ing in Moscow oblast, and the more direct access tothe administration.

Figure 9 The concentration of trade around the Moscow Motorway Orbital 2000. Map: (Rudolph, 1999–2002).


In the highly specialized industrial and scientifictowns of Moscow oblast, the problem of industrialdecline has an additional dimension. The develop-ment of many such towns was formerly the responsi-bility of centralized state ministries, now these townsare being forced to adapt to local development con-ditions. Spatial location, i.e. ‘‘hard’’ locational fac-tors, has attained a new significance for thesetowns. All in all, the towns of the Moscow urbanregion are subject to very varied developmentimpulses. The large industrial and research organiza-tions, especially those affiliated to the armamentsindustry, remain part of state structures. Many ofthe formerly privileged research and technologycomplexes are facing the question of their economicsurvival in view of chronic underfunding, while oth-ers have managed to establish international linksand partnerships, enabling them to thrive undermarket economy conditions. In Fryasino, a formerscientific town in the north west of the Moscow ur-ban region, a total of 28,500 people were employedin four large research and production complexesspecializing in electronics, radio and laser technol-ogy at the start of the 1990s, but by 1999 this figurehad dropped to just 5900 or so. More than a third ofthe working population commuted daily to Moscow

and other towns in 2000. In the second half of the1990s, a number of new companies located facilitiesin the town. The food processing industry and vege-table wholesaling, i.e., primarily import substitutingbranches of industry, were the preferred focus forinvestment (Interview with Georgiy Rovenskiy,press office of the Fryasino Administration, March2000).It is existing structures, developed in the Soviet

period, that are the focus for a process of ‘‘additive’’commercial development in the outer periphery ofthe Moscow urban region. Trunk roads are the pre-ferred areas to locate for car-oriented retailing andwholesaling, plus the haulage business, and newsmall enterprises also locate on the sites of the lar-gely bankrupt industrial enterprises. Capital fromthe oil and gas industry was invested in the modern-ization of the existing locations of this industry inMoscow oblast, in the form of the construction ofnew office complexes. Close to the international air-port, Sheremetevo, 15 km north west of the MKAD,several trading estates with preferential tax statuswere established, and this special economic zone,known as ‘‘sherryzone’’, covers a total area of 165ha. On the whole, the lack of infrastructure in theouter periphery of Moscow means that new

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Figure 10 The development of large-scale retailing in the periphery. A new furniture store on the Leningrad highroad(Khimki) in direct proximity to the motorway orbital. Photo: (Rudolph, 1999).


commercial development is oriented towards exist-ing structures, while access to the core city remainsone of the principal criteria for location decisionmaking.

Conclusions: The post-Soviet structure of theMoscow periphery

Current developments in the Moscow periphery andtheir spatial structure can be explained from a trans-formation perspective, which not only considers spe-cifically political systemic change as a core aspect,but also views the ruptures and changes in Russiansociety as part of an overarching process of globalintegration. A major feature of transformation isthe collapse of old and the concurrent emergenceof new organizational structures and modes of regu-lation, as well as the formation of hybrid structuresthat are apparent in the periphery, as well as in therest of the urban region. The rapid proliferation oflow-level locations, that is, new service sector loca-tions with a low level of investment and a high de-gree of informal economic activity, was the resultof the collapse of the state-controlled production,distribution and supply systems in the absence of sta-ble market economy institutions to replace them.The spread of high-level locations that are basedon extensive, strategic investment by large concerns,rather than the activities of small kiosk traders, sug-gests that a more stable regulatory framework isdeveloping. Consequently, one of the specific as-pects of post-socialist change, the economics of tran-sition, has declined in significance. Rather, universaleconomic mechanisms and strategies with global ef-fects are starting to shape the Moscow periphery. To

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this day however, the periphery is marked by the co-existence of ‘‘improvised’’ and new, investment-intensive locations modelled on global standards,although the significance of the former is decliningin favour of the latter.Lentz (2002) points out that many of the pro-

cesses currently occurring in Moscow, such as thedeindustrialization and the tertiarization of theeconomy, have their roots in the Soviet period,and that, in international comparison, the urbandevelopment of Moscow exhibits many parallelswith other metropolises. Nonetheless, these pro-cesses experienced an extraordinary accelerationunder the conditions of transformation. Speedydeindustrialization left the inner periphery, in par-ticular, with extensive disused old industrial sites.On some of these, new commercial structures areemerging, that are associated with the more flexi-ble commercial use of space by small businesseson the sites of large enterprises. Until now, sophis-ticated commercial developments located on oldindustrial sites have been sporadic, and their distri-bution within the inner periphery tends to be rel-atively dispersed, with present projects displayingdefinite spatial preferences for the compact city.The sectoral differences within the inner peri-phery, already apparent in Soviet times, arebecoming more important. The western and south-western sectors are developing into the preferredlocations for high status residential complexes, lei-sure facilities, and the headquarters of large Rus-sian concerns (Figure 11).The increased development of capital-intensive

retail and services locations in the vicinity of themotorway orbital and in the outer periphery can

Figure 11 Moscow: new centres and perspective growth zones in the periphery. Source: (Burdack et al., 2001).


be interpreted as evidence of convergence withdevelopment with Western urban regions, howeverhybrid structures, i.e., the combination of low andhigh-level locations, remain characteristic for the en-tire periphery of the urban region. The currentphase of the ‘‘saturation’’ of the periphery with Wes-tern-style extensive retail structures is proceedingwith great vigour. Spatial agglomerations of com-mercial activity are oriented towards existing infra-structure, especially the motorway, trunk roads andairports, as is particularly evident around the Lenin-grad highroad in the northwestern axis of the city.Despite these concentrations of commercial activity,no established growth zones can be identified. Theexistence of an extensive high-performance infra-structure, which guarantees quick access not just tothe compact city but also to global interfaces (inter-national airports), is the prerequisite for a deterrito-rialization of production, which will form the

potential basis for the development of dynamicnew centres and growth zones in the periphery.These new economic developments have been ob-

served for a short period in historical terms. In the1990s, the hypertrophic growth of the Moscow urbanregion continued as a result of uncontrolled develop-ment in the urban field. Economic growth zones can-not, at present, be unambiguously delimited in theouter periphery. The concentration of the technologysector around Moscow provides the first signs of atechnology-oriented development process in the fu-ture, which could lead to spatial agglomeration ofthe respective enterprises and a specific form of eco-nomic and social regionalization. However, such con-siderations are still very much hypothetical at themoment, since the principal processes affecting thetechnology sector during the 1990s have been relatedto disinvestment, and to date, relatively few ‘‘eco-nomic beacons’’ are to be found in Moscow oblast.

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Moscow: Processes of restructuring in the post-Soviet metropolitan periphery

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