economic reform under Witte 1893-1903

Question 1

what was the great spurt?

Answer 1

• the spread of industry and the increase of production that occurred in the 1890s.
• a major reason for the exceptional growth was the increase in the output of coal in Ukraine and of oil in the Caucasus.
• although this was the result of private enterprise, it was sustained by deliberate government policy.
• the economic expansion attracted the tsar and his ministers because it was a means of improving the strength of Russian armed forces- a growing industry would produce more and better guns, equipment, and ships.
• Witte wanted to modernise the Russian economy to compete with the nations of the West and invited foreign experts and workers to Russia to advise on industrial planning.

Question 2

what was state capitalism?

Answer 2

• Witte considered that modernisation could be achieved only through state capitalism.
• its greatest need was to acquire capital for investment in industry.
• to raise this, he negotiated large loans and investment from abroad, while imposing heavy taxes and high interests rates at home.
• Witte limited the import of foreign goods
• protective tariffs were set up as a means of safeguarding Russia’s domestic industries, such as steel production.
• Russia’s currency was put on the gold standard in hopes to create financial stability and encourage international investment in Russia.
• the aim was largely successful but customers at home had to pay the higher prices that traders introduced and prices tended to rise as a result of tariffs making goods scarcer.

Question 3

what was the importance of the railways?

Answer 3

• much of the foreign capital that Witte raised was directly invested in railways.
• he believed that modernisation of the Russian economy ultimately depended on developing an effective railway.
• Witte’s special project was the Trans-Siberian railway which stretched for 5770 miles intended to connect the remoter regions of the central and eastern empire with the industrial West and encourage the migration of workers in areas they were needed most.
• however, sections were still incomplete and did not improve east-west migration.
• his hopes was that major improvements in transport would boost exports and foreign trade.

Question 4

what were Witte’s problems?

Answer 4

• Witte made Russia too dependent on foreign loans and investment.
• Witte neglected vital areas such as light engineering.
• Witte paid no attention to Russia’s agricultural needs.
• the demands of military commanders too often interfered with his plans for railway construction and the building of the new industrial plant.
• his freedom was restricted by the resistance to change from the court and government.
• he was disliked by the royal court and government which seldom his support.
• he was not easy to get along with.