Economy Flashcards
Gorbachev’s initial economic reforms discipline and acceleration
Period of trial and error- Campaign to attack rampant alcoholism
By the mid-1980s how much of all household spending did alcohol account for
15%
Some of the measures introduced by the government to curb drinking
The legal age for the consumption of alcohol was raised to 21, the number of retail outlets where alcohol could be bought were reduced, the cost of vodka in the shops tripled.
Was the campaign against rampant alcoholism successful
At first but the tax revenues that the government gain from alcohol fell markedly and caused a serious shortfall in the budget also illegal Moonshine liquor was produced in large quantities and often in unhygienic conditions. Did not solve the underlying problems of the Soviet economy
12th five year plan
Increasing investment controlled by central planning to push the economy to greater production and accelerate growth. Focus of the investment would be science and research especially in engineering
Some weaknesses of the 12th five-year plan
Focus on quantity over quality, agricultural sector swallowing vast sums of investment with no improvements, slow to use new technology, old equipment that broke down so unproductive, the investment was heavily skewed skewed towards construction products but these led to overspends and sucked in more investment than originally intended
What was part of the reason the policy of acceleration did little to address the fundamental weaknesses of the Soviet economy that could suggest Gorbachev was not to blame
The level of opposition to any real change in the fact that most of this opposition came from the party and state economic planning apparatus
What was Gorbachev’s aim under the 12th five-year plan
To streamline the state apparatus in an attempt to avoid waste through duplication and to cut rivalry by competing interests for available resources
What was set up instead of economic decision-making being decentralised
Rather than decentralised economic decision-making, ‘superministries’ were set up to achieve better coordination of economic activity and reduce waste, however they were unable to bring about the changes
Obstacle to reforms could suggest it wasn’t Gorbachev’s fault
Implemented by the people who is privileged position to reforms were trying to reduce.
Changes to investment priorities came up against resistance from the military. What did the fact they pushed for new investment in military technology mean for the Soviet Union
Industrial and military investment could only be increased in other sectors suffered and this pose a great threat to the government’s ability to maintain goods for the general public to consume. So they were forced into deficit, a short-term remedy that could not be sustained
Between 1985 and 1986 the Soviet economy deficit rose from
2.4% of GDP to 6.2%
What was the situation made worse by
Star Wars program the USA’s plan to develop it, war in Afghanistan
