Economic developments Flashcards
How did Russia’s economy develop from 1855-1874
R was a poor, backward agricultural country
depended on the weather and harvests for agricultural output
relied on imports
started producing more weapons to catch up with the W
1860s R economy = state-run factories producing
Economic Policies of Mikhail von Reuten (1862-78)
tax farming was abolished + tax system reformed to include indirect taxes
established the municipal bank in 1862
foreign investment was encouraged
gov subsidies were offered to enable private entrepreneurs to dev railways
Successes of Mikhail von Reuten
Von Reuten’s reforms forced former tax farmers to look elsewhere to invest
gov subsidies encouraged enterprise
this saw a marked dev in the railway expansion + industrial expansion as there were more ppl investing
annual average growth rate of 6% during his term in office
new dev in oil extraction at the Caspian Sea port in 1871
Overall impact of Mikhail von Reuten
However, despite these improvements, R economy remain comparatively weak
1/3 of gov expenditure went on repayments of debt
the new taxation system left 66% of gov revenue coming from indirect tax
this kept the peasantry poor and the domestic market small
Economic Policies of Vshnegradsky (1887-92)
raised tariffs –> a prohibitive import tariff of 30% the value of raw materials was introduced
designed to boost home production + considerably helped the iron industry
negotiated valuable loans from the French in 1888
increased indirect tax + mounted a drive to increase grain exports
Successes of Vshnegradsky
on the surface, Vshnegradsky’s policy appeared successful
1881-91 = grain exports increased by 18%
1892 R budget was in surplus
there was an overall increase in agricultural production in the 1880s due to the kulaks who responded positively to Vyshnegradsky’s export drive
Limitations of Vshnegradsky
however, this export drive was at the expense of the peasants who paid the taxes + saw their grain requisitioned
they were left with no stores for winter
as a result of this policy bad harvest lead to widespread famine in 1891-92
Vshnegradsky was dismissed 1892 due to this disaster
Overall impact of Vshnegradsky
he successfully reduced the budget deficit but only because of his harsh measure and the sacrifice of the peasants
Economic Policies of Sergi Witte (1892-1903)
he was committed to economic modernisation as a means of curbing rev activity
he believe the only way forward was to continue with protective tariffs, heavy taxation and forced exports
this meant less money flowed out of R
Witte’s foreign loans and expertise
Witte was able to increase foreign investment considerably
1900 = 1/3 of capital was invested by foreigners
investment went into mining, oil, metal + banking
encouraged growth in private enterprise –> new class of R industrialists, entrepreneurs + businessmen emerged
raised taxation so peasants were forced to sell more grain which meant Witte could export more grain
encouraged engineers + managers from the W to oversee industrial dev which led to a huge expansion in the railway network
1897 = became the worlds 4th largest industrial economy
this growth helped to increase R exports and foreign trade
Witte’s taxation
raised taxation so peasants were forced to sell more grain which meant Witte could export more grain
Limitations of Witte
foreign investment rates were high + 20% of the budget was used to pay it off
(this was 10x more than they spent on ed)
Witte neglected the agricultural industry which suffered from under-investment
he prioritised ID over the welfare of ppl
rapid industrialisation –> appalling working + living conditions
Overall impact of Witte
although Witte did transform the Reconomy, there were many limitations
1900, 1/3 of Rcapital was foreign investment which was good for the economy as it meant money could be invested into railways
however = dangerous + risky as R relied on foreign loans + interest rates were very high using up 20% of Rbudget
this took away from the ppl of R
Bunge
Bunge
1883 - Peasant land bank
1885 - noble land bank
reducing the redemption payments and abolishing the poll tax
1882-90
laws passed to restrict child labour + women night hours
factory inspector to monitor living + working conditions
although measures were taken to improve lives they had little impact
