Russian Reform And Economics Essay Research Paper

Russian Reform And Economics Essay, Research Paper

Russian Reform and Economics: The Last Quarter of the 20th Century—–Outline—–Thesis: As the reformation of the USSR was becoming a reality, Russia’s economy wascrumbling beneath it. Russia began its economic challenge of perestroika in the 1980’s.The Russian people wanted economic security and freedom, while the government wastrying to obtain democracy. The previous management styles needed to be changed alongwith the way that most businesses in Russia operated. I. Reformation of USSR A. The change from communism to democracy. B. The change in government has had a great effect on the Russian people and workers. C. The reformation left the Russian economy upside down. II. Post-Reform economy versus Pre-Reform economy. A. There were many steps in the reformation of the economy. B. What are some of the effects of a reforming economy. C. There are many changes that are still needed in order for the Russian economy to grow. III. What will be the future of Russia’s Economy.Main Body As the reformation of the USSR was becoming a reality, Russia’s economy wascrumbling beneath it. Russia began its economic challenge of perestroika in the 1980’s.The Russian people wanted economic security and freedom, while the government wastrying to obtain democracy. The previous management styles needed to be changed alongwith the way that most businesses in Russia operated. The Russian Federation consists of 17,075,400 square km, which is roughly 76.2percent of the former USSR, and covers about 12 percent of the earth’s land surface. TheRussian Federation’s population in 1991 was 147.3 million (Smith, A., 7). During the 1980’s the Russian government started a reformation process called”perestroika,” meaning restructuring (Aganbegyan, 1). Perestroika signifies qualitativechanges and transformation in the government and in the economy. The four stages ofperestroika are the “Preliminary stage (March 1985-February 1986),” the “Stabilizing stage(March 1986 – January 1987),” the “Expansive stage (January – November 1987),” and the”Regrouping stage (November 1987 onwards)” (Hill & Dellenbrant, 140). The governmentalso identified two other processes. “Glasnost,” which means openness, supported thestrong economic reform (Aganbegyan, 1; Hill & Dellenbrant, 54). The acceleration ofeconomic reform was called “uskorenie” (Aganbegyan, 1). Many changes took place during the years contained in each of the stages ofperestroika. This changes ranged from government policies and structure to industrialproduction procedures to economic policies. The major change came in 1991 with thebreakup of USSR. This freed the individual states and allowed them to becomeindependent countries. All of these new countries went through radical governmentchanges. Many of them, including Russia, chose to implement democracy. This changefrom a central military based structure into democracy effected all of the former sovietstates’ centralized economic departments. The assets were owned by the people and were distributed by the state during thecommunist reign in Russia. All of the resources were also distributed by the state for thebetterment of the people. The government ran all state budgeted enterprises. All of theprivate enterprises, that marketed consumer goods, were taxed by the government andwere also closely regulated. Before the democratic government, Russian workers received the same pay whetherthey worked hard or not, causing wages to be low and work conditions to be very poor.Russian workers would steal from the government in order to supplement their low wages.The Russian theory was that people were motivated by their collective interests. Thisproved to be very wrong. The actual growth for national income in 1987 was 1.6 percentless than what the government had predicted (Hill & Dellenbrant, 106). With all of the changes going on in each of the stages of perestroika there was a lotof political, bureaucratic, managerial, and intellectual opposition to what the leaders wereestablishing. This goes to show that people will always resist change. Perestroika identified many problems with the existing government, economics, andliving conditions of the people. The lack of overall government regulations likeunemployment insurance, a decent taxation system, and a centralized market caused manyof the conditions. Another problem was the lack of legal infrastructure and protectedproperty rights. The old factories in Russia couldn’t keep up with the new technology of theInformation Age. In 1987 Russia had less than 200,000 computers compared to the UnitedStates’ 25,000,000 (Smith, H., 239). Innovation in Russia was looked at as a disruption ofthe flow of production even though technological modernization was needed badly. Theidea of quantity overruled quality in most of the factories. Many pieces of machinery werebuilt but not the parts to replace broken ones, millions of shoes produced in the odd sizes,and exploding TV’s were common place under this idea. Russia had a total economic collapse in 1990-1991 causing total imports to fall under1988’s 135.9 billion roubles and exports down from 1988’s 102.5 billion roubles (Smith, A.,199-200). Russia exported 76 percent of USSR’s total exports and imported 68.4 percent(204). In 1988, Russia’s produced 569 million tons of oil, 590 million cubic meters of naturalgas, and 425 million tons of coal (206). Industrial output was down 13 percent in t