Causes of the USSR's collapse- ECONOMIC

EXAMPLE OF GORB’S REFORMS:

Tackling Alcoholism

(what did he do)

• legal age of consumption was raised to 21

• no. shops where alcohol could be bought was reduced

• the price tripled()

EXAMPLE OF GOB’S REFORMS:

Acceleration

• 12th five year plan= sucuumbed to the old Soveit method of heavy investment to try and accelerate econ growth + productivity (focussed on agri, construction and engineering) ( increased investment in these areas, but some argue wasting money on investment into businesses that ultimately failed- ussr didnt have sufficient funds/strong enough econ to risk doing this)

• 1986= ‘worker collectives’ so workers can elect their managers

EXAMPLE OF GORB’S REFORMS:

Perestroika

• (economic restructuring)

• loosened the tight control of GOSPLAN to grow the econ

• introduced more market mechanisms→ co-operatives legalised (1988),, The encouragement of foreign joint ventures- Jan 1987( gorb wanted to make the ussr an attractive place to invest, he wanted to encourage foreign b’s to set up here (but many= hesistant as this=RISKY)

• Many comms saw these ‘market mechanisms’ as introducing capitalism into the econ- hated this

RESULT OF GORB’S ALCOHOLISM REFORMS

-by mid 1980s= alcohol accounted for around 15% of all household spending meaning gov lost A LOT of tax revenue (around 10% of the GDP in total)

• moonshine liquor- a household made alcohol) began to be produced in large quantities(often unhygennic and lots of people were dying)

IMPACT OF GORB’S ACCELERATION REFORMS

• investments drained more money than intended from an already collapsing economy

• war and arms race was still taking 15% of GDP→ this money could’ve been invested in ind

• even in areas where productivity did increase, quality was mostly poor and sometimes unusable

• process of acceleration meant the sov deficient went from 2.4% of GDPin 1985 to 6.2% in 1986

• agri investment didnt improve productivity—> 20% OF SOV UNION’S FOODSTUFFS WAS STILL IMPORTED

IMPACTS OF PERESTROIKA

• food prices increased→ led to hoarding→ led to food rationing to control the situation (1988 meat was rationed in 26/55 regions of russia

• by end of 1990s, there were nearly 3000 joint foreign ventures in ussr BUT most= small-scale and had little impact on economy (big b’s=deterred by bureacracy and slow progress)

• reforms seriously w_____ the a______ of the State P_____ Committee (GOSPLAN) BUT provided very l____ to replace it

• soviet output declined by___% between 1990-91

• critics said perestroika had led to c______ (an economic catastrophe)

• deficit climbed to ____ rubles by 1988 as i________ investment, the d____ budget and the a___-d____ campaign

• in october 19_ one of gorbachev’s e____ advisors put forward the __ Days P____ which recommended a rapid m___ to a m___ economy (accepted by russian parliament but rejected by sov gov)

• reforms seriously weakened the aapparatus of state planning committee but provided very little to replace it

• sov output declined by 20%

• catastroik

• 93 rubles as: inefficient investment, anti-drinking campaign and defence budget)

• 1988, economic,, the 500 Days Programme,, rapid move to a market economy

WHAT AND WHEN WAS THE NOVOSIBIRSK REPORT??

1983

• drew attention to the growing crisis in agricaused by state inefficiency and inflexibility

IT SAID THE REASONS FOR INEFFICIENCY WERE:

• alcoholism→ amount drank by workers= affected productivity and cost of healthcare

• lack of incentive→ workers by 1980s had a far more negative view of comms and hard work resulted in little/no increase in material wealth

• conservative centralisation→ central planning agencies could effectively regulate the hugue and increasingly sophisticated econ(as light econ increased) + quantity> quality meant millions of products every year= unusable