Economy Of Russia Essay, Research Paper
The phase in the business cycle that Russia is in is Prosperity.
Prosperity is the high point of the business cycle. The Gross Domestic
Product is 796 billion dollars. Russia is partners with Germany in
exporting and importing. The number of imports is 33 billion and the
number of exports are 66 billion. The National Budget is 56.6 billion
dollars. They have 1 radio per 2.9 people. They also have 1 Telephone per
5.9 people. Russia s education is free and compulsory through ages 7 to
17. The unemployment rate is 8 percent. The inflation rate is 85 percent
and possibly more if monetary policy is relaxed. Russia was mostly an
agricultural country until the late 19th century, when industrialization
began, in European Russia. Economic development was then interrupted
by World War 1 and the Civil War that followed. Modern development
was initiated by Stalin, whose frantic industrialization drive in the 1930 s
made the Soviet Union an industrial giant. Under Stalin and his
successors, the less settled frontier regions of Central Asia and Siberia were
developed. Several of the world s largest dams were built on in the former
Soviet Union, and the world s first atomic station was opened in 1954. By
the 1980 s about 40 nuclear reactors were operating in the Soviet Union.
In the late 1970 s the economic backwardness of the Soviet Union had
become so self evident that no amount of political propaganda could
obscure it. Western developed countries began to enter the Information
Age, introducing new communication technologies and electronic links
among institutions and individuals. The Soviet Union still relied on the
rigid planning and pervasive controls, leaving no room for initiative and
inventiveness. When Mikhail Gorbachev became head of the party in
1985, the huge country began to move. Gorbachev surrounded himself
with a number of reform-minded economists and soon formulated the
main pillars of economic restructuring called perestroika. The major goals
of perestrioka were to make Soviet enterprises more self-governing and to
give them more freedom, while at the same time, more responsibility for
their performance. In the planned economy before perestroika, all
enterprises were totally dependent on central planners, who determined
where to buy materials, what to produce, and where to sell it. This system
encouraged inefficiency, because the companies did not have to compete
with any other companies. In addition since the workers could not be
fired , they did not work very hard. A number of new laws were made to
proclaim that it was possible for individuals or small groups to start their
own enterprises. Restaurants, taxis, recycling centers and repair shops
were opened in many places, but party bureaucrats often hampered these
new initiatives. Another goal of peresroika was to fight against cheap
products. Better quality control was introduced in many companies, but
it was often resented by workers and led to drops in production (Which
would be recession.)