Sample Essays on Features of Russia’s Economy during Different Periods

Features of Russia’s Economy during Different Periods

Russia’s economy has exhibited varying features since the early years of industrialization. Most of these features were distinct from those of its neighbors. While some of these features were progressive, others were blamed for hampering the country’s development efforts. This paper provides a comparative analysis of the general features of Russia’s economy to that of its neighbors during different historical periods.

Stalin’s Industrialization

Under the leadership of Stalin, the Russian government developed an economic policy plan that was to transform Russia from an agricultural and peasant-based economy into a modern industrial power in the shortest time possible. To achieve this, Stalin initiated five-year economic plans, where the first one was implemented between 1928 and 1932. Under the first plan, the Soviet government embarked on the nationwide collectivization of agriculture. The collectivization efforts involved grouping together smaller, privately owned peasant farms into larger farms that averaged around 1000 acres apiece. The aim was to promote the production and distribution of agricultural food supplies to the emerging industrial sector. The use of farming machines in the collectivized farms was expected to free labor, which was to be utilized in the industries. However, Russia’s agricultural production declined considerably after the end of the first five-year plan. The declining production was attributed to low levels of motivation by a majority of the Russians because the government controlled agricultural production in most of the lands. While the consumer goods and services performed poorly, the heavy industrial sectors exceeded its planned target.

The second five-year plan enacted in 1933 enhanced Russia’s industrialization efforts. The plan’s main objective was to reduce the country’s imports and improve its self-sufficiency. Industrialization efforts in the second plan were concentrated in the far eastern regions of Russia, modernizing the region for the first time. Lead, copper, iron, and coal mining activities were opened up in these areas, thereby resulting in the creation of more railway tracks throughout Russia.

In the third five-year plan of 1938-1942, the Russian economy increased its war production. More resources were increasingly devoted to the military sector, mainly as a reaction to the rise of the Nazi Germany. The Russian government was forced to abandon its five-year plans when it was invaded by the Nazi in 1941, and instead concentrated all resources towards supporting the military sector. Russia relocated most of its industrial production capacity eastwards to the Urals and Central Asia from the European Russia region to secure its economic health from further damage. Russia’s fourth five-year plan (1946-1950) was mainly dedicated to reconstructing the country after the war.

It is evident that Stalin’s industrialization efforts were focused on enhancing the industrial growth through the shifting of resources from other sectors of the economy to the heavy industrial sector. The planning process during this era gave Russian consumers little priority. This can be confirmed by the fact that Russia’s household consumption in 1950 was just slightly higher than that of 1928 when the plan was initiated.

Khrushchev’s Agricultural Reforms

Khrushchev became the new Russian leader after Stalin’s death, and ruled between 1954and 1963. He had established himself as an agricultural specialist during Stalin’s era. Having noticed several weaknesses in Stalin’s economic policies, particularly in agriculture, Khrushchev initiated extensive economic reforms mainly through increasing consumption in the Russian economy by increasing food supply. He was more concerned with the miserable conditions of the peasant farmers and their alienation from the agricultural production. In his agricultural reforms, Khrushchev provided peasant farmers with more control over the agricultural production process. Under his leadership, peasant farmers were paid more for their grain production. Taxes imposed on the peasants were reduced significantly to enable them to increase their savings and investment in agricultural food production. The amount of grain requisitioned by the government was reduced, thus leaving the peasant farmers with more grains to sell to increase their profits from agricultural production.

Apart from encouraging the peasant farmers’ participation, Khrushchev also sought to increase efficiency in the agricultural sector. He achieved this by disbanding the tractor stations established by Stalin’s administration during the collectivization efforts. These tractors were then sold to state farms. Hardworking peasants were able to purchase tractors for their farms, thereby providing them greater incentive to increase agricultural food production and profits. Khrushchev also created large collective farms by combining those that had been established during Stalin’s era, basing on the principle of economies to scale.

Finally, Khrushchev extended food production into new lands. Under this plan, which was commonly known as the “Virgin land scheme”, the Russians were able to cultivate approximately 36 million hectares using over 100,000 tractors provided by the government.

The success of Khrushchev agricultural reforms was evident, as the country’s agricultural output between 1954 and 1958 had increased to 110 million tonnes, compared to 80 million tonnes of agricultural out realized between 1949 and 1953. Khrushchev invested heavily into the agricultural sector, while ignoring other supportive industries, for instance, those manufacturing agricultural inputs such as fertilizers, pesticides, and agricultural machines like tractors. With little investment in agricultural machinery, efficiency was not significantly increased. Introduction of new grains, such as maize, to unsuitable soils resulted in reduced production and failure to sustain improved output.

Brezhnev’s Stagnation

When Brezhnev ascended to power in the Soviet Union in 1964 following a bloodless coup against Khrushchev, the country was already industrialized, and with greater military and technological power. However, the Russian economy had failed to produce adequate consumer goods and agricultural supplies, especially food. The country had started experiencing stagnation as the standards of living that had been increasing during the previous two regimes started falling again. The government had diverted more resources to military and space development programs. His reform efforts of increasing production of consumer goods and agriculture using market forces were prevented, as they were perceived to be inclined towards capitalism. However, he attempted to lift the country out of economic stagnation by allowing farmers to work on state-owned farms. This move motivated farmers to produce more since they were permitted to keep or sell the surplus. These efforts were fruitless because production continued to decrease during this stagnation period characterized by deterioration in the standards of living.

Brezhnev’s efforts to increase production of consumer goods and agriculture shifted resources from the heavy industrial production that was developed during Stalin’s era. Brezhnev’s decision to terminate all reforms initiated by Khrushchev resulted in severe shortages of many goods. Under his leadership, the country changed from being the worlds’ leading exporter of food to the leading importer.

Brezhnev is blamed for the stagnation as he failed to modernize the Russian economy, especially in relation to imports and exports, human resource development, and foreign policy. Brezhnev had diverted more resources towards strengthening the military and space program at the expense of increasing production of consumer goods. This is attributed to the Cold War tensions. His administration discouraged importation of consumer goods that were readily available in the neighboring capitalist countries. Finally, his administration failed to transform Russia’s labor force through education and other development trainings, considering that the global economy was changing from manufacturing to knowledge-based economies. He died in 1982 after an 18-year rule. Brezhnev’s policies did not only cause stagnation, but also contributed to the collapse of the Soviet Union.

Gorbachev’s Crisis

After the selection of Gorbachev as new Soviet leader in March 1985, the Stalinist rule began to decline.  He was tasked with lifting the Russian economy out the stagnation. His main goals were to free up the Russian economy and widen the popular base of his much-criticized regime. His initiatives began as a call for increased economic efficiency of Russian enterprises. Gorbachev’s thorough reform initiatives were expanded to the renewal of the socialist system that had “increased transparency of social life and openness about societal ills” (Shevchenko 15). His reform initiatives were ineffective as they were not only partial and inconsistent, but existed when the country was experiencing intensifying shortages of food and consumer goods, interethnic tensions, and deepening tensions within the ruling party.  The partial reforms undertaken by Gorbachev’s administration proved incapable of ameliorating the stagnation and the declining popularity of socialist projects undertaken by his regime as the Soviet Union collapsed.

Yeltsin’s Market Reforms

Gorbachev lost his public influence to a group of democratic reformers, who expressed extensive and appealing radical political and economic agenda. Among these democratic reformers was the pro-capitalist Boris Yeltsin. Yeltsin assumed the leadership of Russia after a power struggle with Gorbachev. Yeltsin initiated several macroeconomic policy measures to stabilize the country’s economy. His policies demanded considerable reductions in government expenditures, particularly in public investment initiatives, military, and subsidies to producers and consumers. The program’s objective was to reduce the widening government budget deficit. Yeltsin’s administration set new taxes and enhanced the country’s tax collection systems to increase state revenues. The Russian Central bank was required to subsidize credits to enterprises, while also restricting the growth in money supply and curbing inflation. Initial outcomes were contrary to the expected. Government spending did not reduce significantly, and the central bank increase money supply after the economy experienced a financial crisis. Yeltsin’s economic restructuring strategy included the lifting of price controls of most consumer goods. However, his administration raised, but controlled energy and staple food prices. The main objective of these measures was to establish a realistic relationship between production and consumption, a critical economic component that lacked in the central planning system. Finally, Yeltsin’s market reforms focused on the privatization of state firms. The aim was to encourage the development of the private sector. However, the privatization program was tarnished by corruption scandals, giving it a negative reputation amongst ordinary Russians.

The economic results of Yeltsin’s market reforms remained poor until 1998. This was largely attributed to the severe damage caused the long communist rule, compounded by the irresponsible fiscal policy. His reforms were flawed because they increased income inequalities, financial crime, and corruption. Privatization was quite successful, though most profits were sent abroad instead of being invested in Russia. Despite these challenges, he managed to establish a foundation that promised better economic development in the future. Russia’s economy began to improve in 1999 when the world oil prices increased. Its economic pillars were further strengthened when the country adopted a fiscal and monetary policy that was more conservative.

Putin’s Economic Stabilization

Putin was endorsed by Yeltsin to advance his economic stabilization efforts. Since his election as Russia’s president in 2000, Putin has been credited for stabilizing Russia’s economy. After his eight-year rule that ended in 2008, the living standards had doubled, and the country’s total output (Gross Domestic Product) had increased by 20 percent. Under his leadership, Russia became the seventh largest economy, up from the 20th global ranking. Increased revenues generated from the rising oil prices encouraged more domestic consumer spending that was largely satisfied by imports, yet they failed to stimulate the recovery of Russia’s agricultural and manufacturing sectors. Putin’s administration also increased spending on the military.

Under Putin’s presidency, the state gained more control over crucial industrial corporations, particularly those in the oil sector, resulting in a state-led capitalist economy. Putin has always sought to diversify Russia’s economy, and further build its technological and human capital. The country has continued to attract foreign investors as partners in energy projects, but on a minority basis. Although Russia’s economy has experienced rapid growth during Putin’s era, problems of economic inequalities are still persistent. Economic development is unevenly distributed across Russia, and income inequalities have increased amongst its population.

Why the Soviet Union Fell Apart

The main factors that contributed to the collapse of the Soviet Union include economic inefficiency, ethnic unrest, improved democracy, and the Cold War. The Soviet Union’s centrally planned economic system was highly inefficient in meeting domestic demands of its people. The Soviet Union’s economic policies were largely inclined towards transforming the nation into an industrialized economy. The Soviet government had wrong economic priorities, thus initiated economic reforms that had little impact on the member states of the Union. The government’s incompetency in prioritizing economic policies was evident in its constant shifting of resources towards the development of heavy manufacturing and mining industries at the expense of those producing consumer goods and services. This contributed to the Union’s economic stagnation situation that was responsible for its people’s declining standards of living. The problem was compounded by the isolationist nature of the country’s economic system as it discouraged importation of consumer goods in shortage from its neighboring countries that had surplus supply. The persistence of such problems made the union’s members prefer the capitalist economic system that was perceived to be more progressive. This motivated the union members to push for their independence to facilitate efficient management of the economies.

Ethnic fragmentation and unrest also played a critical role in the collapse of the Soviet Union. While Russia appeared to be the favored and dominant state in the union, other member states felt largely oppressed by the union’s political and economic inequalities. Since the larger proportion of the Union’s population belonged to non-Russian ethnic groups, they exerted considerable pressure for the Union’s disintegration into new independent states. Apart from the growing resistance from anti-communist insurgents in most member republics, the declining public perception of the soviet government and their growing local nationalism strengthened their independence ambitions, thus the eventual disintegration of the union.

The Cold War significantly affected the Soviet Union’s foreign and domestic policies. With the increasing military tension, the Soviet Union was lost in an arms race as it directed most of its resources towards strengthening its military capabilities, while focusing less on the productive sectors of the economy, such as agriculture and manufacture of consumer goods, thus resulting in economic stagnation and pressure for economic autonomy of the member republics. The Soviet Union focused more on spreading its communism ideology overseas, while it ignored most of its domestic challenges, for instance, the growing ethnic political differences between individual republics and their independence ambitions.

Finally, Gorbachev reform policies that called for increased transparency of social life and openness about societal ills enabled the Soviet people express their dissatisfaction with the communist regime. This encouraged the emergence and spread of anti-communist movements within the member republics who pushed for independence as a means of attaining economic stability.


 Environmental Degradations in Russia and Other Newly Independent States (NIS)

Environmental degradations in Russia and other Newly Independent States can be traced back to the Soviet Union era. The main causes of environmental degradation in Russia and other NIS include erosion, deforestation, climate change, industrialization, increased urbanization, poor agricultural practices, and lack of appropriate environmental policies that encourage conservation of nature.

The intensive use chemical fertilizers in agriculture have resulted in the contamination of agricultural lands. The leaching of synthetic compounds used in agricultural production, such as herbicides and chemical fertilizers into surface and underground water bodies has resulted in the pollution of these resources. The discharging of untreated industrial and urban sewage wastes into water bodies is the main cause of water resource degradation. For instance, the Volga River of Russia is considered as one of the most polluted rivers in Europe because if industrial and domestic waste discharges into the river. The impact of this pollution has been the ecological collapse of the Caspian Sea that receives most of its fresh water from the Volga River (Henry and Douhovnikoff 444). The overuse of water by industrial plants and for agricultural purposes, for instance, irrigation, has also affected the aquatic ecosystems. In Kazakhstan, the Aral Sea dried up after two of its main rivers that flowed into it were diverted for irrigation purposes. The resulting land was highly degraded as it contained a layer of harmful chemical pesticides and natural salts, which are frequently dispersed to other areas by windstorms.

Nuclear waste and accidents have also caused environmental degradation in Russia and other NIS. The adverse environmental impacts of Ukraine’s Chernobyl nuclear accident of 1986 are well documented. The radioactive materials from the explosion have continued to affect the ecological balance of the nearby ecosystems. Ukraine’s Red Forest that was adversely affected by the accident’s radioactive materials has remained one of the world’s most contaminated terrestrial habitats.

Environmental degradations in Russia and other NIS have been worsened by increased rates of deforestation through extensive logging and wildfires. Foreign logging operations have increased the deforestation rates in Russia’s Usurri region, which is located in the country’s far eastern boundary. Sulfur dioxide particles emitted by copper, cobalt, and nickel smelters in the Siberian city of Norilsk have damaged large forested areas in the Kuznetsk Basin and southern Urals. Climate change as a causal factor of environmental degradation has resulted in increased surface temperatures in Russia and other NIS. Global warming has turned Russia’s arctic tundra shrubs into trees. The extensive ice landscape is being replaced by ocean due to the melting of ice. Climate change has contributed to the desertification processes evident in Tajikistan, especially in the dry climate of Pamir. Temperature increases in the Pamir region have resulted in species loss, while also threatening other indigenous species such as Androsace bryomorpha.

Finally, the environmental laws of Russia and other NIS have hampered environmental conservation efforts. For instance, Russia’s first compressive law that was passed in 1991 contains numerous general statements regarding environmental rights of citizens, but does not set any specific goals. Lack of proper implementation and enforcement of environmental laws have failed to regulate environmental degradation in Russia and other former Soviet member republics.

Works cited

Henry, Laura A., and Vladimir Douhovnikoff. “Environmental issues in Russia.”Annual review of environment and resources 33 (2008): 437-460. Print.

Shevchenko, Olga. Crisis and the Everyday in Postsocialist Moscow. Bloomington: Indiana University Press, 2008. Print.