Economic Policies of Russia
Since the breakup of the Soviet Unio
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Since the breakup of the Soviet Union into individual nations, the region's economies have undergone severe changes. Centralized planning and state ownership of nearly all factors of production has given way to increased privatization. The region has witnessed some individuals who have made sizable profits as a result of the new policies, while other individuals have seen their standards of living decrease. The result is that the various nations are scrambling to establish monetary and fiscal policies that can help the various nations emerge from the 70 years of socialism and centralized planning into a new era. In the early years of the 1990s, the region witnessed high levels of inflation, economic disruption and upheaval, and increased scrutiny by outside economic forces, including the International Monetary Fund (IMF). This research examines one country, Russia, and considers the economic policies that have been put into place since its separation from the Soviet Union as a whole.Overview of Current Situation in Russia Russia is the largest of the former Soviet Republics, both in population and in territory. By 1991, the country had assumed responsibility for all Soviet external debt, a move which satisfied foreign creditors, since Russia was in the most favorable position to repay the debt, but a move which placed severe limitations on the ability of the new nation's economy to grow because of high debt service costs. All former Soviet ministries,
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At that time, there was a 25 percent ceiling on bank lending rates. In 1992, as part of the massive reforms that Gaidar put into place, the Central Bank rate was increased to 20 percent, while ceilings were removed. Refinancing rates increased to 50 percent in April of that year, and 80 percent in May.
Another area of economic policy is that of foreign trade. As part of the reforms instituted in January 1992, foreign trade opened up. Import tariffs were eliminated, although there were still quotas placed on exports and strict licensing requirements.
Exports to other former Soviet republics represented approximately 70 percent of Russia's total exports in 1990. Exports to other country feel from 1990 to 1991 (as did exports to other former Soviet republics), but the export strategy was helped by the conversion of the ruble to a convertible currency internally. Exports fell by 35 percent during the first three quarters of 1992; imports declined by 17 percent during the same period.
However, the foreign trade situation for the nation improved during 1993: the nation posted a $20 billion trade surplus for the year and wages increased (in constant dollars) from an average monthly rate of $8 in January 1992 to $100 at the e
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Approximate Word count = 2916
Approximate Pages = 12 (250 words per page)
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