economic and social developments Flashcards
What was the conditon of the Russian economy prior to 1860
- agarian population
- immobile workforce
- Half of Budget on army
Who was Mikhael Von Reutern
Finance Minister of the Russian Empire from 1862 to 1878
What reforms did Mikhael Von Reutern introduce
- Tax system reformed to include more indirect taxation
- Bank and credit facilities expanded e.g. Satate Bank 1860, minicipal banks in 62 and savings bank in 69
- Subsidies for railways
- FDI encouraged with government guaranteed dividend
What were new industrial developments under Von Reutern
- OIl extraction in Baku in 1871
- Ironworks in Donetsk in 1872 and Kirvoi Rog
- 1879 Naptha Extraction company
What were the impacts of Von Reuterns Policies
- Subsidies encouraged enterprise e.g. expansion of railway
- Annual growth rate of 6%
EVALUATION
- ⅓ of al gov. expenditure went to repayment of debt
- Rouble was very volatile
- 66% of gov. revenue came from indirect taxation
Who was Ivan Vyshnegradsky and what were his aims
Russian Finance minister from 1887 to 1892 to balance the budget while financing enterprise
What did Ivan Vyshnegradsky do
- 1887 30% import tariff; designed to boost domestic market
- Loan from France in 1188
- Increased indirect tax
What impact did Ivan Vyshnegradsky’s policies have on agriculture
- 1881-1891 russian grain exports increased by 18%
- By 1892 the budget was in surplus
EVALUATION
- Grains requisitioned by state
- Increased tax burden
- Little crop reserves
- Worsened the 1891-2 Great Famine
- Little crop reserves
What was the 1891-2 Great Famine and its impacts
- Affected 17/39 provinces
- Over 350,000 people died
- Reduce potential GDP; loss of able bodied workers
- Outbreak of Cholera and Typhus
- Forced Vyshnegradsky to resign
called the ‘defining event of the decade’
Who was Sergei Witte
- Minister of Finance from 1892 to 1903
- Well known as an expert on railway administration
- Outsider to Russian autocracy in many respects
- Recognised need of Russian modernisation to curb revolutionary ideas
- Growing up in Caucaus made him contrast with slow bureaucracy
- Recognised need of Russian modernisation to curb revolutionary ideas
What was Witte’s thesis behind his policies
- Continued with protective tariffs, heavy taxation and forced exports to generate capital
- Feared Russia would run the risk of becoming a colony to Western nations
e.g. ‘generously providing them with the cheap products of her soil and buying dearly the products of their labour’ - in 1899, in a secret memorandum to the Tsar Nicholas II
What were Witte’s policies
- Home industries were protected against foreign competition with high import duties
- Foreign investors were encouraged to invest in Russian Industry, especially French and Belgian
- New rouble introduced in 1897 linked to the gold standard- fixed against other currencies and made freely convertible to gold
- Indirect taxes raised to achieve a reserve of gold
- Railways introduced to provide easier access to raw materials and to markets for finished goods
e.g. Witte’s defining achievement was the Trans-Siberian Railway, connecting Moscow and Vladivostok with a distance of 6000km encouraging economic development in Siberia making it an important supplier of grain, meat and butter for Europe
What were the positive effects of Witte’s Policy on industry
- Increased foreign investment; rising from 26% in 1890 to 41% by 1915
- Railways stimulated the economy and lowered costs e.g. 2200 km in 1861 to 63,600 km in 1906
- Development of Industry such as: heavy metallurgical industry in Ukraine, development of oil wells in Azerbaijan
- Russia’s annual growth rate was higher than that of any other industrial country by the 1890s (distorted by lower base)
What were the Negative Impacts of Witte’s policies on Industry
- Increase in taxes and duties worsened the already low standards following the great famine
- by 1900 20% of budget was used to service the debt, ten times as spent on education
- Number of foreign companies rose from 16 in 1888 to 269 in 1900
- Workers were protected and sometimes had medical care but still had a miserable existence
- Foreman had power to pay, punish ,discipline and sack his workers; making them bitter
- Workers were crowded together in wooden barracks with little ventilation or light.
What was Witte’s view on the negative impacts of his policies
- Utilised lower wages to crush Western Competitors
- Betted that industrilisation would eventually lead to better conditions
‘we are fifty or a hundred years behind the advanced countries. We must make good this lag in ten years. Either we do so or they crush us.’
