V.R. GEVORKOV, A.A. LIOUTY, A.G. KHROPOV Outlying Areas of Russia: Problems and Prospects While studying the phenomenon of the country's outlying areas and determining prospects and ways of development, it is impossible to ignore the fact that Russia was a permanently expanding state since its formation. The reverse process began only eight years ago (and develops by poorly studied and hardly understandable scenario). Nowadays, Russia became the world's northernmost country with 75 percent of the area pertaining to the extreme north or regions considered equal to it. It manifests their remoteness (from the country's economically developed centres), severeness of the natural and climatic conditions, and dispersed population. In spite of the calls getting more frequent "to throw off as many of economically inactive or slightly active areas as possible and become a normal European state by size," Russia is still and, we believe, will be forever a huge, spatially extended country with different natural, climatic, traffic-geographic, geoeconomic conditions and other factors that predetermine search of strategy and issues of the state strong regional policy along with search of sources, instruments, and incentives of regional endogene development. Increasing traffic expenses and lack of state price control make the general situation more complicated while localising of regional markets, in the Far East in particular, replacing internal interregional traffic-economic relations by international ones, and fragmenting the state economic area. Moreover, higher expenses for delivery of fuel, foodstuffs, and other goods to outlying northern or considered equal areas put many of them on the verge of the catastrophe. Thus, the basic industry of the Kuril Islands - fish and marine products manufacture, which is of great potential for internal and external markets, appeared to be on the verge of bankruptcy (only traffic * Institute of Geography, Russian Academy of Sciences, Moscow. Social Scientist, Vol. 29, Nos. 7 - 8, July-August 2000