Gorbachev and the ending of the Cold War (copy)

pressures on and significance of Gorbachev as Soviet leader; new thinking and practicalities: the importance of Soviet economic problems;

How much were the Soviets spending on military between 1964-82?

approx 25% of Soviet GNP spent on military supplies

Economic problems associated with Brezhnev era

* Brezhnev initially tried to introduce reforms that would promote market forces but was blocked by hardliners who feared shift to capitalism
* morale and productivity declined as living standards stagnated
* poor grain harvest in 1975, exacerbated economic distress

Factors that undermined Soviet economic growth

* **alcoholism** - led to worker absenteeism and workplace injuries
* **lack of foreign investment** - stifled growth and innovation
* **state controlled businesses** - no recognition of consumer demand
* **inflation and worker discontent** - workers’ wage rarely stayed in line with inflation

What was Gorbachev’s initial response to economic problems of the Soviet Union?

saw direct link between Soviet Union’s economic performance and its ability to maintain its superpower position globally

Gorbachev’s New Thinking

‘we can’t go on like this’

* **glasnost** - meaning openness
* **perestroika** - meaning restructuring

Perestroika

**designed to improve performance of economy**

* decentralised planning (Law on State Enterprises 1988)
* would allow managers to implement economic changes without waiting for GOSPLAN
* ended state price controls
* Law on Joint Ventures = allowed foreign investment up to 49%

maintain command system within market economy

Glasnost

1986 = challenges and necessity of reform became apparent

* Chernobyl, release of dissident Andrei Sakharov

**re-examination of Soviet history and open debate on past govt actions from 1988**

Economic effects of Soviet foreign policy

* Carter’s imposition of sanctions, embargoes and boycott of 1980 Moscow Olympics furthered Soviet economic deterioration
* led to increase of military spending
* Soviets could not continue cheap exports to eastern Europe
* alienated and pushed them closer to Western capitalism
* **June 1988: European Commission set up trade and cooperation agreements with individual Comecon members**, first Hungary
* allowed countries in Soviet orbit to make own trade agreements, making trade w SU less likely and obsolescence of Comecon

social and political significance of Gorbachev’s economic policies

* perestroika led to decreased standard of living
* partly due to removal of subsidised necessities
* Soviets made 61 joint-venture agreements with Western companies by 1988, bringing in much needed capital and technological advancements
* alcohol policies cost 100b roubles in taxes lost due to drop in consumption
* transformation of large, corrupt bureaucracy allowed public to choose their representatives

**= hastened collapse of USSR**

When did Gorbachev come into power?

March 1985 (until resignation in Aug 1991)

Difference between USSR and PRC reforms

Both USSR and PRC had economic reforms, however China did not implement glasnost and maintained repressive which allowed them to survive whilst USSR did not

Chernobyl, April 1986

nuclear reactor in Ukraine exploded

* Gorbachev authorised cover story, but eventually told the truth about scale of disaster

**= led to glasnost as it revealed ‘the sickness of our system’**

Gorbachev’s approach to foreign policy

* extricate USSR from Afghan quagmire
* needed to formulate response to Reagan