Outline
-
Intro
-
1st p
o
Aims
§ Khrushchev
· 1)
Raise living standards for Soviet citizens
o
i) Raise grain production
o
ii) Switch focus from heavy industry
to consumer industry
· 2)
Decentralize government power and economy. Khrushchev sought to limit
government control by making the state “wither away”
§ Gorbachev
· Overcome
economic stagnation by modernising the system
· Reduce
detailed centralised planning with more self-management at local enterprise
level
· Reducing
the power of the CPSU and the Soviet state industrial ministers in Moscow over
the economy
-
2nd p
o Policies
§ Khrushchev
· Agriculture
o Increased
the amount that they state paid for grain and reduced some quotas as well as
the taxes on farming profits from private plots
o Merged
many collectives into larger state farms over which the government had greater
control to where experts were sent from Moscow to advise on more modern methods
o Virgin
Lands January 1954
§ Idea
was to farm land that had not previously been used for agriculture
· Industry
o May
1956
§ Khrushchev
establishes 105 regional ministries based on the existing administrative structures
o Feb-Mar
1957
§ Abolished
most of the All-Union economic ministries in Moscow and reformed Gosplan
o 1957
§ Seven-Year
Plan to concentrate on consumer production, light industry, chemicals and
plastics, as well as mineral resources
o In
total 40% of investments were directed to the relatively neglected eastern
regions of the Soviet Union as Khrushchev wanted to focus on regional development
in an attempt to create a more balanced soviet economy
§ Gorbachev
· Perestroika
o Reduction
of centralised planning with more self-management at local enterprise level
§ Factory
and farm manager were given a greater say in what they produced and whom they
employed
§ Self-financing
was phased in
· Enterprises
paid for their own operating costs out of their profits
o Ended
subsidised prices
o The
policy became effectively a partial re-privatisation in agriculture and service
industry
§ Nov
1986 Law on Individual Labour Activity
· Allowed
individuals in the service sector to start private enterprises
o Reduced
the number of industrial ministries
o Dec
1986 Law on Joint Enterprises
§ Supposed
to encourage foreign companies to invest in joint schemes in the USSR
o Reducing
state control
§ Jan
1988 Law on State Enterprises
· 60%
of state enterprises were shifted from tight central control to control by
their managers
· 1989
the remaining 40% of state enterprises were similarly released from state
control
§ May
1988 Law on Co-operative
· Allowed
small and medium sized private co-operative enterprises to operate in the
service sector and in manufacturing and foreign trade
· Workers’
co-operative and small private businesses could be set up
§ From
1988 the agriculture continued to move towards privatisation
· Extending
the private plots that peasants already had
· Peasants
and farmers were now allowed to take out long-term leases on land belonging to
the collective (the ownership of the land would therefore still belong to the
state)
-
3rd p
o Outcome
§ Khrushchev
· Agriculture
o Virgin
Lands
§ In
the first year 2.4 million hectares were ploughed but many of the new farms
failed because people did not understand the local weather conditions and there
were often shortages of fertiliser to rejuvenate the quickly exhausted soil
o Despite
record harvest in 1962, which did however fall short in many places of the
target, the harvest in 1963 was disastrous. Grain production dropped by nearly
30% creating a serious shortage in animal feed. This led to large quantities of
North American and Australian grain that had to be bought
o Historians
John Keep and Peter Kenez have also pointed out that despite some sound
attempts to improve agriculture the underlying problems still remained.
· Industry
o By
1965 the gross national income had grown by 58%, industrial output by 84% and
consumer goods by 60%
§ Gorbachev
· In
1987 there was reported a decline in economic growth, which resulted in a large
and increasing budget deficit. In 1985 it was 3% of the national income and by
1989 it was 14%
· The
end of subsidies prices led to an increase in prices and unemployment
o In
1990 25% of Soviet citizens were below the poverty line
o Products
were often scarce
o By
the end of 1988 rationing had to brought in for certain foods in some areas
· Labour
unrested occurred from 1989 to 1991
· The
reduced party and state control of the economy meant that the government/party
was increasingly unable to take strong actions to solve the problems. This led
to further unemployment and an increasing economic slowdown
-
Conclusion
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