Why the Economy declined
- Created by: Ananna
- Created on: 04-05-13 17:08
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- Reasons why the economy Declined
- use of outdated technology / still relied on a labour intensive workforce
- conservative leader, more focus on the defense side, not much focus anywhere else
- the central planning system which has been in place for the past 25 years was severely flawed
- Gorbachev was completely crazy in that he wanted the rewards and outcomes of a free market economy with the system of a central planning one
- use of outdated technology / still relied on a labour intensive workforce
- conservative leader, more focus on the defense side, not much focus anywhere else
- the central planning system which has been in place for the past 25 years was severely flawed
- Gorbachev was completely crazy in that he wanted the rewards and outcomes of a free market economy with the system of a central planning one
- the central planning system which has been in place for the past 25 years was severely flawed
- conservative leader, more focus on the defense side, not much focus anywhere else
- the central planning system which has been in place for the past 25 years was severely flawed
- conservative leader, more focus on the defense side, not much focus anywhere else
- none of the leaders which made reforms were economists so they didn't know what they were doing
- when leaders were given some form of advice they just ignored it and went about whatever it was they did
- Inflation and collapse of the Rouble
- There were several economic policy making bodies and each were competing with eachother
- Reforms caused major confusion the administration
- arbitrary decisions were made really suddenly without consulting others first
- January 1991 PM Pavlov suddenly withdrew all high denomination banknotes from circulation; people weren't given enough time to convert their money and savings became worthless overnight
- Impact of perestroika
- Reforms caused major confusion the administration
- the lack of co-ordination enabled enterprises to ignore demand
- this confusion further allowed enterprises to take the **** in what they were doing and lied about their production, number of people on their payroll etc
- the party lost much of its power
- Reforms over the years were not well throught out
- EG THE VIIRGIN LAND SCHEME WAS REALLY BADLY THOUGHT OUT
- Their was increasing unrest in the workforce
- The Republics started to get fiesty and indulged in protectionism and created Customs barriers against each other which disrupted trade
- Ukrainian mines could no longer get supplies of timber needed
- The Republics started to get fiesty and indulged in protectionism and created Customs barriers against each other which disrupted trade
- Gorbachev inherited rather costly projects
- Afgahinstan war
- Commitmrnt tyo match US defence spending
- Gorbachev inherited rather costly projects
- Afgahinstan war
- Gorbachev inherited rather costly projects
- use of outdated technology / still relied on a labour intensive workforce
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