Economic Reform in Russia Essay - 1265 Words

Economic Reform in Russia Formerly the preeminent republic of the Union of Soviet Socialist Republics, Russia has been an independent nation since the dissolution of the Soviet Union in 1991. Because of its great size, its natural resources, and its political domination, the Russian Federation played a leading role in the economy of the Soviet Union. In the years preceding the disintegration of the union in 1991, the economy of Russia and the union as a whole was in decline. In 1992, immediately after the separation, the Russian government implemented a series of radical reforms. Price controls were abolished as the beginning of a transition from a centrally controlled economy to a market economy. An immediate series of sharp†¦show more content†¦Almost an article of faith for Russian reformers and their Western supporters, an assumption made was that Russias salvation lay in tight monetary discipline, rapid economic liberalization and a massive privatization program. According to Richard E. Rawles, head of the Russian Psychology Research Unit, in University College London, western financial institutions were unaware of â€Å"the cultural traditions of Russia and complicated interactions of psychologies and mentalities with social structures† that had been largely ignored. E. Wayne Merry, who was head of the political section from 1991 to 1994, sent a telegram early 1994 which criticized Americas evangelical attempt to remold Russian society in its own image. Just as Rawles had argued that Russia was physiologically and culturally unprepared for a free market so suddenly, Merry argued that such efforts would almost certainly fail because Russia -- unlike Eastern European countries such as Poland and the Czech Republic -- had little tradition of free markets or the rule of law. The United States, in Merrys view, would end up getting blamed for the failure of â€Å"shock therapy†. Reformers were well aware of the risks -- unemployment, social discontent, and opportunities for corruption. Nevertheless, foreign investors disregarded these handicaps and invested in the Russian stock market toShow MoreRelatedEssay The Effectiveness of Wittes Economic Reform in Russia528 Words   |  3 PagesThe Effectiveness of Wittes Economic Reform in Russia When Sergei Witte became minister of finance in Russia in 1892 he recognised that the economy had to be modernised if Russia was to become a world power on a par with the west. The Industrial Revolution that had taken place in the west had led to its massive economic growth and an increase in power and Empire building. 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