The Smolensk oblast is one of the industrial regions of the Central Russia. The industry of the oblast forms 29% of the regional gross product. In the territorial structure there have been formed the industrial centres of Smolensk and Desnogorsk and of 6 industrial rayons: Vyazemsky, Gagarinsky, Dorogobuzhsky, Safonovsky, Roslavlsky, Yartsevsky. They produce more than 90% of the total industrial output of the oblast.

The rest 19 rayons of the oblast are agricultural ones. The agricultural complex of the Smolensk oblast is typical for non-black-soil zone of Central Russia. One of the main agricultural specializations is stock-raising, having a definitely marked dairy-and-meat direction. In plant-growing grey bread is characteristic, mainly winter rye and traditional spring barley and oats.

In the Russian Federation Smolensk oblast steadily rates among the regions with the average level of development.

Gross regional product

The gross regional product of the Smolensk oblast in 2004 was 57340.2 mln. rub.

In formation of the general structure of regional gross product the proportion of economic branches has the following distribution:
• industry - 29%;
• agriculture - 12%;
• construction - 5%;
• public catering - 15%;
• transport and communication - 12%;

City of Smolensk in the regional economy

Smolensk, the administartive, industrial and cultural centre of Smolensk region, is one of the oldest cities in Russia.

One third of the population of Smolensk region lives in the regional centre. As of December 1, 2005 the permanent population of Smolensk was 318,0 thousand people.

Smolensk is situated close to the western border of the Russian Federation and is its western land gates. The city lies on the way of freight and passenger traffics from the countries of Western Europe, the Baltic States and Belarus, it has good railway and motor communications with Moscow and Saint-Petersburg.

The financial resources of Smolensk region are made up in the greater part by the enterprises of the city - Smolensk ensures 67% of the turnover in the retail trade, 46% of the volume of shipped goods of domestic production, services provided by own means in the basic branches of economy (mining operations, processing industry, production and distribution of energy, gas and water), 23% of investment into the basic capital and over 65% of new housing. Now the city functions in new economic conditions of today's Russia and seeks to fill in its economic niche and determine its role in future.

Macroeconomic factors have influenced the development of the city, which has conditioned positive dynamics of basic social and economic indicators. In 2005 the volume of the shipped goods of domestic production manufactured by industrial enterprises which belong, according to the statictic records, to the three basic types of economic activity (mining, processing enterprises, production and distribution of energy, gas and water) reached 32.7 bn rubles or 108,3 % as compared to the previous year in the established prices. The said enterprises provide jobs for 36,3 % of the employed working at large-scale and medium enterprises, their part in the profit is over 50%, in the tax payments to the budgets of all levels - over 30 %.

In 2005 the total volume of investment into the development of the economy and social sphere of Smolensk, all sources of finance included, reached 3.3 bn rubles, i.e. 4 times as much as in 2000. There is an increase in the share of investment into the residential construction. E.g. for the last six months the living area put into operation has amounted to 856.5 thousand sq. m. In the residential construction some modern technologies are applied: individual heating, installation of roof and adjoining boiler-rooms, hot/cold water supply system with the use of polypropylene pipes. Besides, road-building and other activities are performed to increase the welfare of the city. The following large facilities have been reconstructed and put into operation: Pyatnitzky overbridge, the bridge over the Dnieper, the memorial complex "Katyn", the central street - Bolshaya Sovetskaya, the railroad station, the cinema "Sovremennik".

The consumer market is characterised by a high level of product saturation, an increase in the growth rate of the retail turnover, strengthening of the formal market. The retail turnover was on a stable increase and in 2005 amounted to 163 %, in goods mass, as compared to the level of 2000.

Effectiveness of enterprises and improvement in their finantial situation stimulated the growth in the tax payments into the consolidated budget. The total amount of tax proceeds that the economic entities registered on the territory of the city transferred to the budgetary system of the Russian Federation in 2005 increased by 29 % as compared to 2004 and amounted to 6.4 bn rubles.

There are three commercial banks on the territory of Smolensk: CB "Smolensky bank" Ltd, JSC "SKA-Bank", JSC Bank "Ascold" and 16 bank affiliates, the headquaters of which are situated in other cities of the Russian Federation. There are over 20 communication statements in Smolensk that provide telephone, radio-telephone, individual and electronic communications services, mail services, space and cable television broadcating services, departmental telephone communication services as well as special communication services. The largest communication statement in the city is Smolensk affiliate of JSC "CentrTelecom". The tempo of installation of telephones in Smolensk is higher than in such regional centres as Kaluga, Oryol, Tula.

Smolensk is an important scientific and educational centre. There are over 30 institutions of higher education and their affiliates. Sientific research and development are carried out in 22 organisations. A number of organisations in Smolensk are engaged in scientific and engineering research that is unique in Russia and related to the fundamental research. E.g. JSC "IM "KristaH" - the biggest diamonds manufacturer - carries out research in the field of crystallography, development of processing equipment for diamonds that have no analogues in the world. The Centre of plasmic technologies within the aircraft plant in Smolensk develops and manufactures the best plasmic cutting tools in the world and plasmic scalpels and plasmatrons for physiologic procedures that have no analogues. Smolensk plant-breeders have achieved interesting results during experiments with irradiation of seeds of various cultures by means of plasmatrons. 2005 was the year when the scientific research institute of "Antimicrobial chemotherapy" - a unique SRI in Russia, began to function. It has been decided to construct a diagnostic medical centre in Smolensk fitted out with the latest equipment.

The historical and cultural heritage of Smolensk and its geographical position create great prospects for tourism of all kinds: sightseeing and cognitive tourism, amateur tourism, social tourism, event tourism, holiday and festival tourism, therapeutic and recreational tourism, sporting tourism, tourism for children as well as tarnsit, motor and railway tourism.Today there are 52 travel agencies in Smolensk which specialize mainly in exit tourism. In Smolensk and close neighbourhood there are 19 hotels and tourist complexes that can simultanuously accomodate 2423 people.

There are 492 historical and cultural monuments of federal and local importance. On the territory of Smolensk region there is a great number of nobility estates (over 150) many of whish belonged to outstanding russian people: M.I. Glinka, A.S. Griboedov, soil scientist V.V. Dokuchaev, the famous traveller N.M. Przhevalsky, outstanding statemen of the time of Catherine II G.A. Potyomkin-Tavrichesky, N.I. Panin, admiral P.S. Nahimov, Decembrists P.I Pestel, P.G. Kahovsky, V.K. Kyuhelbecker and many others. Smolensk region is the birth-place of A.T. Tvardovsky, Y.A. Gagarin.

The strategic objective of social and economic development of Smolensk consists in improving the standards of living of the citizens on the basis of complex and balanced economic development.

The Head of the city of Smolensk (mayor) is elected by the city's population on the basis of the general, equal and direct right to vote by secret vote for the term of 5 years in the manner set up by federal and local laws. December 7, 2003 Vladislav Nikolayevich Khaletzky was elected mayor of the city.

The elected representative body of the local government is the municipal Counsil of Smolensk which consists of 25 deputies elected by the citizens on the basis of the general, equal and direct right to vote by secret vote for the term of 5 years. The President of the municipal Counsil of Smolensk is Sergey Alexandrovich Lebedev.