The increase in military spending is another argument that caused stagnation in the Soviet Union during the period. Brezhnev spent huge amount of money in the defense sector and according to Blanchard & Froot et al. (1994) the share of defense spending in GNP was 12% in 1960-70, and increased by 4% in 1975-80 to 16%, even though the country was is deep economic crisis. Brezhnev increased military spending each year; even as the country needed the spending in other “important” sectors, to boots the growth of the country, and caused low-level of economic development. Brezhnev increased the spending specifically on nuclear materials production plants, compared to weapons. During this time in history both the superpower, USA and Soviet Union had developed nuclear weapons. Soviet Union wanted to limit the possible war with the USA and the two countries came to an agreement on arms limitations in 1972 (IB Guide, 2014). In the period of 1965-1976 the growth of country spending was between 4-5 % per year on defense, but between 1977-1982 it declined the spending on defense to 2% (Strode, 2009). Brezhnev also spent huge and increase amount of money on the nation’s space programme during his time in office. The General funded generously both the space stations and Soviet Shuttle (Launius and Logsdon et al., 2000), as he wanted to keep up with the Americans progress in the field.
General Brezhnev also increased spending on the agricultural sector during his time in office. He transformed collective farms in to state farms, meaning the farmers were now allowed to work on state owned farms in the country. Soviet Union used large sums of all of its investment into its highly ineffective agricultural sector (IB Guide, 2014). Brezhnev tried to m...
... middle of paper ...
...nation, when needed. In 2013 the new forecasted growth rate over the next two decades has been estimated to be 2.5% instead of the 4%, and the BRICKS’ growth rate has been estimated to be at 5.2% (Best News, 2013). Putin aims to the country to be by the top five economies in the world by the end of the next decade (Best News, 2013). Still Russia is highly corrupted has it was under the Brezhnev era, making it little or no environment for small and medium size business, as they will be outperformed or acquired by larger ones. Russia is today a marked economy, but is an emerging market in the world, they have learned from the past of the disadvantageous of planned economy. Russia is a growing country, in terms of world power and world economy, the lessons from the stagnation era, will help Russia in the future about how to coop with the issues, and how to avoid them.
The first five-year plan, approved in 1929, proposed that state and collective farms provide 15 percent of agriculture output. The predominance of private farming seemed assured, as many farmers resisted collectivization. By late 1929, Stalin moved abruptly to break peasant resistance and secure the resources required for industrialization. He saw that voluntary collectivism had failed, and many “Soviet economists doubted that the first plan could even be implimented.”1 Stalin may have viewed collectivization as a means to win support from younger party leaders, rather than from the peasants and Lenin’s men. “Privately he advocated, industrializing the country with the help of internal accumulation” 2 Once the peasantry had been split, Stalin believed that the rural proletarians would embrace collectivization . Before this idea had a chance to work, a grain shortage induced the Politburo to support Stalin’s sudden decision for immediate, massive collectivization.
During the twentieth century, China developed the strongest economy throughout the world. The mass population of the Chinese people helped in the production in goods which in tailed helped China’s economy grow. Russia was not far behind China after the Industrial revolution, Russia needed a plan if they were going to catch up to China. China was relying on the exporting of goods and long term goals for profit. Russia focused on Five-Year Plans, “the form of economy worked for communism, consistently appealing to the intellectuals of developing countries in Asia” (Paul Craig Roberts 2). The Industrial Revolution had helped the growth of both China and Russia’s economy throughout the Twentieth
...began spending more on the military than the Soviet Union. This was the first time that this thing happened. The Soviet Union could not keep up with American defense spending, nor could they keep up with the technology. The Soviet Union tried to keep up with the spending, but it may be a reason for the eventual collapse of the system. Eventually the Soviet Union and Gorbachev were forced to sign new arms treaties.
Before the Stalin, the Soviet Union was backward, medieval type country full of unmade roads and people who lived without electricity in wooden homes. The Five Year Plans changed thi...
“His plans were in 5 year intervals in which the government took control over all businesses and industries, focused mainly on factory output/transportation and to implement quota systems” (Greatneck). “The Soviet Union needed to become a top tier area in the global market, but their insufficient funds were what stopped from becoming types of governments such as communist, socialist and capitalist” (StudentPulse). Banks ceased to bail out industrial enterprises. The civilian administrative system, which was already creaking under wartime strains, started to collapse.
These subsidies prevented the USSR from internal reforms or modernizing their economy and eventually the subsidies were not enough to hold the bloc together. Another lost lasting problem was agricultural stagnation, which had existed since Stalin collectivized. Little was accomplished to improve the agricultural situation, despite evidence from Hungary in 1970s that modern American technology could revive communist agriculture (Friedmann 225). Declining food production led the USSR to begin importing more and more food from the West. “In 1972 the USSR increased its grain and soy imports from 8.3 to 22.8 million tons” (Friedmann 225). This created an interesting relationship where the USSR was trying to compete with US as a superpower, yet was receiving food aid. Simultaneously, as USSR could afford less and less to subsidize the Eastern bloc, it had turned to the West for help. “It was difficult for the Soviets to insist on bloc loyalty […] when the USSR was making its own deals with the West” (Friedmann 220). This led to stronger economic ties between communism and capitalism, which underscored the failure of communist autarky. It
Russia, spanning 11 time zones and serving as home to about 150 million people, possesses tremendous natural and human resources. Demand today for imported consumer goods, capital equipment, and services remains remarkably strong, with imports representing an unusually large percentage of the national market. Despite outstanding long-term market potential, Russia continues to be an extremely difficult country in which to do business.
In the early 1980s prior to Gorbachev’s presidency, the soviet economy was wracked by chronic shortages of food and consumer items. These shortages were in part due because of Leonid Brezhnev leadership being inefficient at directing the soviet economy. It was against this backdrop of economic decline and political instability that Mikhail Gorbachev came to power. Gorbachev came from a peasant family and this humble background played a large role in his political thinking and gave him a strong humanitarian sympathy. His separation from the old regime gave him greater freedoms to move away from old thinking and enact policies grounded in a new way of thinking. Gorbachev was under different circumstances than past leaders because people at around this time wanted the country to move in different directions and at the same time, this led to Gorb...
As the Soviet Union approaches Berlin from the East, the allied forces invade from the west. Hitler’s German war-machine was crumbling. The United States had to make an enormous decision. Should they attack the Red Army of the Soviet Union? Should they keep the increasingly shaky alliance with the Russians and end the war in Europe? America chose to remain allies, resulting in a decision that affected the world for the next 46 years. World War 2 had concluded but now there was a new enemy, the Soviet Communist.
Russia is the largest country in the world in terms of area and the world’s ninth most populous nation with 143 million people. Due to its large area the country is situated in 4 different climate zones and has vast natural resources. Russia also has a unique geographic position with the 14 border countries, bounded by 3 out of 4 world oceans, facilitating the build of international and domestic supply chains. Russia is one of the most technologically advanced economies in the world with a very big and well-educated work force and one of the largest consumer markets. The Russian economy is commodity-driven and is the world’s largest producer of oil (12%), natural gas (18%) and nickel (20%).
Also, the Soviet Union’s quest to remain a world superpower cost it dearly, as they were hard pressed to keep up with US defense spending under Ronald Reagan. The “Soviet Union was spending a large percentage of its GNP on the military because of the expansion of US spending” (p.3.fsmitha.com). Th...
Upon taking office in 1981, Ronald Reagan began to implement a simple strategy to win the war against the Soviets: he would outspend them in an arms race and force them to the negotiating table. Over the course of this erratic arms build-up the president spent a total of $2 trillion on the military alone. The most notorious of these programs was the Strategic Defense Initiative; also know as Star Wars, in which the president authorized billions to be spent to research a program that could defend America against a possible nuclear attack by blowing in an incoming nuke out of the sky. A vast majority of the scientific community thought such a program to be absurd and implausible, but Reagan pushed on. His belligerence in this arms race only provoked the Kremlin, and increased tensions. This massive military funding only led Russia to assume that the United States was planning to attack, and undercut efforts of peace. Also, in order to maintain such large military growth hundreds of ...
After their defeat in the Crimean war (1853-1856), Russia’s leaders realized they were falling behind much of Europe in terms of modernisation and industrialisation. Alexander II took control of the empire and made the first steps towards radically improving the country’s infrastructure. Transcontinental railways were built and the government strengthened Russia’s economy by promoting industrialisation with the construction of factory complexes throughout...
The term “Era of Stagnation” itself was born when Mikhail Gorbachev blamed Leonid Brezhnev for the economic issues that appeared in 1964. The main reasons of stagnation were increased expenditures. The spending increased firstly on military consumer goods and slowly went to economic issues such as work inefficiency. However, author of: ”Revolution from Above: The Demise of the Soviet System” David Michael Kotz argues that militarization could not cause significant changes within Soviet economy as military spending has historically been high. One of the most important events in the history of 20th century of course was expedition to the Moon and that also was something that required a serious amount of resources. ...
Third world countries became the perfect battleground for cold war proxy battles during the early 1940’s to late 1990’s. United States wanted to flex its political muscle and try to curtail the spread of Soviet Communism in the developing nations. Most of the nations in developed world had already made their political and socio-economic stand regarding the form of governance and leadership pursued. Underdeveloped nations in Asia, Latin America and Africa were still vulnerable and easily influenced in terms of ideologies and political direction. Most nations in Latin America like Chile were recovering from colonialism and thus logistic, economic and political aid from powerful nations to propel their economies which made it easy for Americans and Russians to act as their “saviors’”. The quest for global dominance had intensified between United States and USSR and the shift was focused to developing nations like Chile. Both Americans and Russians used different mechanisms to enhance their propaganda and support the regimes which were friendly to them and used any means necessary to topple hostile regimes. CIA used covert operations in Chile and most of the Latin nations to plant their puppet leaders in order to safeguard their foreign policy interests and maintain dominance. Military coups and social unrests were planned, orchestrated and executed with the assistance of CIA. The research paper tries to critical analyze the impact of the cold war on Chile and influence of United States.