What explains the fall of the USSR, c1985-91

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How important were economic weaknesses in bringing about the fall of the USSR?

Long-term economic weaknesses

  • Weaknesses highlighted in Novobirsk Report of 1983 - inefficiency and inflexibility
  • Report given to politburo - Gorbachev only member to recognise reform was needed
  • Solution unclear - tried with trial and error which sent economy into chaos

Gorbachev's initial economic reforms: discipline and acceleration

  • Reformers brought into party and conservatives dismissed - Yeltsin promoted
  • Attacks on alcohol - drinking age raised, cost of vodka tripled
  • Tax revenues fell - fiscal deficit
  • Illegal alcohol produced which was unhygenic

Twelfth 5-year plan

  • Focus on investement and central planning:
  • Investment sweked towards construction - led to more spending which used more investment
  • Equipment inefficient and broke down
  • Industry slow to adapt to new technology
  • Technological imports expensive
  • Agriculture using lots of investment but making little progress
  • Focus on quantity over quality
  • Gorbachev unable to alter fundamental problems - faced too much opposition within party
  • Tried to centralise resources and reduce waste with 'superministries' - unsuccessful
  • Implemented by priveledged who didn't want to give up power
  • Resistance from military - wanted all investment so other sectors suffered
  • Went into deficit to solve this - didn't work just made Gorbachev look worse

Economic perestroika

  • Restructuring of the economy - more elements of private enterprise:
  • Encourgement of joint ventures, January 1987 - Foreign firms could establish business in USSR - Hoped it would make USSR more open to foreign technology
  • Law on State Enterprises, June 1987 - Loosening of state control over wages and production
  • Co-operatives were legalised in 1988 - Small-scale businesses established

Impact of perestroika

  • Food production increased a little but still not enough
  • Enterprises still subject to state intervention - state decided allocation of resources
  • Products diverted from state shops to co-operatives (where prices were higher) - caused inflation and impacted poor people
  • Poorer cities left devoid of adequate food and supplies
  • High profits meant corrupt officials demande bribes for permission to operate
  • Uncertainty led to hoarding - rationing introduced
  • Power to managers led to increase in wages
  • Bureasucracy made foreign investment a slow process
  • Reforms undermined by officials
  • The fall in price of oil had significant impact as was Russia's main export
  • Weakened system without providing a replacement
  • Gorbachev's failure undermined his political power

State Commision on Economic Reform

  • July 1989 - report commisoned saying a radical solution needed - a market-led economy
  • Split party - reformers in favour but conservatives not
  • 500 days programme suggested - rejected by Soviet government, accepted by Russian Parliment
  • Division between Party Leadership and national republics caused chaos
  • Economy collapsed

How significant were the failures of Gorbachev's political reforms?

Glasnost and the need to reform the party

  • Apparatus of state was huge and unmanageable - wasteful, corrupt etc.
  • Relations between central planning and regions poor
  • Glasnost was opening up party to public for new ideas

The impact of glasnost

  • Became an open attack on the party:
  • Complaints about housing were popular
  • Investigations revealed details of Stalin's terror, the famine and…

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