Economic Perestroika Flashcards
By what year had Gorbachev decided that a more fundamental restructuring of the Soviet economy was needed?
1987
Gorbachev tried to use methods ________________ when he decided more fundamental restructuring was needed
Outside the state
Because state apparatus was the obstacle to reform
Where did Gorbachev launch his proposal for economic perestroika?
January 1987 Plenum of the Central Committee
Gorbachev hoped that by introducing____________ and allowing an element of __________ the economy could be revitalised
(Perestroika)
Market mechanisms (practices of capitalist economy eg supply and demand of goods to determine prices rather than the state)
Private enterprise
Market mechanisms and private enterprise would
Put in place a series of incentives that would encourage production
Give greater flexibility than the central command economy in meeting the needs of the population
PERESTROIKA The encouragement of joint ventures
January 1987
Allowed foreign firms to establish businesses in the Soviet Union, usually in joint enterprises with the state
Moscow got its first McDonald’s 1990
Gorbachev hoped it would open the USSR yo more modern technology
Moscow got its first McDonald’s in
1990
PERESTROIKA The Law on State Enterprises
June 1987
This allowed a loosening of state control over wages and prices and, as a consequence, weakened the authority of Gosplan
Also allowed an element of election in the choice of managers
Factories given the right to produce what they liked once the targets set by the state had bee met
PERESTROIKA co-operatives legalised
1988
This allowed small scale private enterprises to be established— could set their own prices
Flourishing sector in cafes, restaurants and small shops quickly developed
“Coop” appealed to conservatives in party who feared dismantling of socialism— G could partially disguise the move to a more market based economy
1986 Soviet economic growth rates by %
National income utilised
Industrial production
Agricultural production
1987 growth rate
National income utilised— 1.6
Industrial production— 4.6
Agricultural production— -1.4
1988 growth rate
National income utilised— 4.4
Industrial production— 6.3
Agricultural production— 2.5
1989 growth rate
National income utilised— 2.5
Industrial production— 0.4
Agricultural production— 1.7
Soviet economic growth rate 1990
National income utilised— -4.0
Industrial production— -1.2
Agricultural production— -2.3
Soviet economic growth rages 1981-85 average
National income utilised— 3.2
Industrial production— 3.9
Agricultural production— 1.0
