Russias Economic Transition :: Russian History Historical Communism Essays

Russia Economic TransitionIn August of 1991, the collapse of the communist system in the USSR andits close republics occurred. Out of the smoke emerged fifteen naked as a jaybirdrepublics and a union known as the Commonwealth of Independent States. These newregimes faced formidable obstacles. The collapse brought gigantic inflation whichin turn forced the economy into a spiraling decline and a state of almostworthless value. Many people were rapid to point the finger at their communistpast, and even more eager to lay blame. Traditional communist ideology was toprovide for every individual an tinct amount of goods and services, thuscreating a state of equality amongst the populous (Leveler, 16). Many peoplefelt as if their current hardships could be blamed on the communists and their frugal policies, specifically their Core-Periphery plan.The communist sponsored Core-Periphery economic policy that wasevident in Russia was quite simplistic in nature. The theory, traditionally mak e use ofdto describe inter-continental trading and production, was adapted for use in theRussian economic zones. The theory was as follows Areas which surround thecapital (core region), usually rich in one material or another, would be employfor the extraction of raw materials. These materials would then be shipped backto the capital in order to be manufactured into goods. From there, themanufactured products would be shipped back to the surrounding regions(periphery region) for resale. The citizens of Russia were endure on thissystem, but barely. The Core-Periphery policy was not efficient, nor effective,for usually a product needed on one side of the federation, was produced at theother end. Factors such as transportation costs and adequate use of humanresources was very inefficient and cost-consuming. Strong influences from theworld urged Russia to make the transition into the market-oriented economy. Thisseemed tempting, for the market-oriented economy preached individual weal th andprosperity. eyesight no better solution to their current economic woes, Russianpolicy-makers took the plunge.By 1995, 4 years since the beginning of the transition into a market-oriented economy, no adapted economic improvment had taken form.Productivity in many states such as Turkmenistan and Belarus continued to fall(Table 2), and inflation was still at high levels. Many new Russian capitalistsin the regions chose to exploit what had already been exploited in the past rawmaterials. Looking to make a fast income, these new Russian capitalists sellwhatever they could get their hands on, for practically no cost at all (Co-Existence, 146). Expropriation of state property, shady deals, and corruptionwere rampant. Productivity in industries such as agriculture declined as farmersdid not want to take care of their land (Co-Existence, 146).