The report has three main chaptersdiscussing modernization, diversification andcompetitiveness. The chapters examine problems and barriersfacing households, private firms and public agencies toachieving these objectives, and then identify theinstruments that can help Russia achieve the necessaryspatial transformation of its economy. Russia's longhistory as one of Europe's leading nations, and itsmore recent past as a superpower, give it grounds forgreater aspirations. To realize them will requiresignificant improvements across all aspects of the economy.Russia's economy faces many challenges, some of whichare a persistent legacy from its tumultuous history in thetwentieth century of civil war, two world wars and a longperiod of communism. But as the largest country in theworld, it is not surprising that many of Russia'sproblems relate to its economic geography, which is thefocus of this report.