Economic Factors- end of the Cold War
- Created by: Georgia Ivy
- Created on: 18-04-15 15:04
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- Economic factors
- Stagnant Soviet Economy
- command economy lacked flexibility
- ineffective central planning methods
- couldn't adapt to collapsing economy. Instead stuck to plan which was unsuccessful
- unrealistic production targets of 5 yr plans
- couldn't adapt to collapsing economy. Instead stuck to plan which was unsuccessful
- unrealistic production targets of 5 yr plans
- growth of industry only 2% in 1980
- fallen since 5%+ in 1967
- USA Strengths
- 50% larger economy
- technologically more advanced and produced higher quality products
- Arms Race
- because USSR weaker economic position worsened
- Mid 1980s military spending 40% state budget
- 20% GDP far higher than USA 7% GDP
- Technological backwardness
- Trade embargo (ban) in 1970s
- 1974 sale of PCs banned
- only 50,000 PCs in USSR and 30M in USA (early 80s)
- Energy and Oil
- USSR reliant on export of oil and gas
- hit by fall in prices- 1970 oil was 15.6% of soviet exports.
- By 1984 this was 54% but oil value fell by 90%
- Gas production 9.5M to 156M cubic meters but value fell 50% in 1980s
- hit by fall in prices- 1970 oil was 15.6% of soviet exports.
- USSR reliant on export of oil and gas
- Impact
- Eastern Europe
- caused popular discontent- poor living standards, unemployment and high prices
- argue it led to the fall of USSR due to the growing desire for capitalism
- Prompted New thinking
- needed urgent reform to raise living standards
- wanted to reduce escalating cost of nuclear arms race
- needed space and undivided attention to reform the centralised state economic planning
- Eastern Europe
- Stagnant Soviet Economy
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