Economic Weakness

Question 1

The Twelfth Five-Year Plan (1986-1990)

Answer 1

Short-term growth: first 2 years national income, industrial and agricultural production all increased
But by 1990 entire economy in full recession, leading to economic collapse
Twelfth Five Year Plan failed to tackle long-term economic problems in Soviet economy

Question 2

7 Limits to Economic Growth

Answer 2

Opposition of conservative Politburo
Diverted resources to industrial-military complex
War in Afghanistan (1979-89
Growing Financial deficit
Outdated industrial equipment
Inefficiency of agricultural sector
Gosplan and targets = quantity over quality

Question 3

Economic Perestroika

Answer 3

Launched perestroika in 1987
Joint Ventures, January 1987 (Allowed foreign firms to open businesses in the USSR, but with the state as a partner. First McDonald’s in Moscow in 1990)
Co-operates legalised, 1988
(Small-scale private businesses could be set up and control their own prices: growth in restaurants, cafes and small shops)
Law on State Enterprises, June 1987
(Factories control prices, wages and elect managers. Could also produce whatever they wanted once state targets had been met)

Question 4

The Impact of Perestroika

Answer 4

Food production increased 1% - still import one-fifth of all food
State-shops run low on supplies as food diverted to co-operatives who sold it for much bigger profit and moved to wealthier areas, lack of supply in poor
Poor supply of food led to rationing: by 1988 26 out of 55 regions of Russia rationed meat
Profits of co-operatives attracted corrupt
CP officials who extorted bribes in return
for permission to continue operating

Question 5

500 Day Programme

Answer 5

Gorbachev backed the 500 Day Programme to switch to capitalism economy
Politburo rejected it; Russian Congress accepted it
Communist Party split and caused chaos; industrial output slumped by one-fifth in 1990-91
Known as ‘catastroika’ – economic catastrophe!

Question 6

Western historians

Answer 6

Western historians believe that Communist economies were inherently weak as
State not able to supply needs of the people – only free market can create growth
Therefore Western historians claim that collapse of Soviet economy inevitable

Question 7

Left-wing historians

Answer 7

They judge Gorbachev’s attempt at reform more positively

They suggest non-economic factors such as war and politics undermined economic reform