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Russia Case Study

Case Study on Russia

1. Introduction
In this paper I am going to present my research results regarding development of Russian economy from Stalin times till present moment. I will cover the following periods: Stalin’s industrialization, Khrushchev’s agricultural reforms, Brezhnev’s stagnation, Gorbachev’s crisis, market reforms of Yeltsin, Putin’s economic growth and finally contemporary Medvedev’s recession.

In the second part of my paper I will analyze the general features of the North Eastern Eurasia climate. And in the final part of the paper I am going to describe comparatively features of the climate and life forms in tundra, taiga and step.

2. From Stalin to Medvedev
2.1 Stalin’s industrialization
It is impossible to underestimate Stalin’s impact on the economy of the Soviet Union. People, who presented different political parties interpret and analyze his action from different sides. During his government, he conducted a series of economic improvements, industrialization, which raised economy of the country to previously unknown heights. He held agricultural reforms, decreased the level of criminality, and under his government the Great Patriotic War was won. On the other hand, millions of common people were called “public enemies”, sent to disciplinary camps, hundreds of thousands were physically wiped out, and tortures thrived.

In the middle of 1920s Stalin claimed that industrialization was the only way of socialistic development of the society and the economy of the country.

1927 was the year that demanded dramatic changes in the structure of country’s economy. Government understood not only the necessity of industrialization, but also acknowledged the need of high speed for its introduction and realization. Crisis at the grain storage market was viewed by Stalin as the critical time to switch from private households to large collective households. In his public speeches Stalin insisted on the creation of collective and state farms.

As a result, in 1928 the first five year plan saw the light. There were two versions of it- “minimal”, for the start, and “maximal” or optimum, which rates were higher for 20%. The second maximal version was adopted. The plan specified that during next five years the industrial products output should increase 180%, means of production for 230%, agricultural production for 55%, and net national product for 108%. The question was about stunningly rapid progress that had no analogues in the history of global economy. Some absolute rates were set as well: 10 million tones of cast iron, 75 million tones of coal, and 8 million tones of chemical fertilizers should have been produced. This national idea of rapid economic growth was envisioned from the point of view to sacrifice everything for the sake of national wealth accumulation. Expected hardships were connected with the negotiation of internal and external order, stipulated primarily by the tension of the plan itself. Many economists discovered many inconsistencies in the set goals, but they were considered too skeptic and pessimistic (Sakwa 54).

In spring, 1929, Stalin introduced new slogan: “Five year plan in four years!” His new goal was to increase the rate of industrialization, regardless the fact, the plan was seemed almost impossible to fulfill.

It is essential to mention that for USSR the middle of 1930s was marked by a great result: industrialization was becoming the real fact. In terms of gross output in 1937, USSR became the second country in the world: it was a little bit less then in USA and was much greater then that of any European country. The Soviet large-scale industry was born, and what was much more important- it was working effectively.

The second five year plan was more realistic then the first one and it was as important to industrialization as the first one. The second plan was more balanced and there were no attempts to diminish time for plan realization. Investment rate was high, but during first several years they were directed to completion of already started constructions, and later, new industrial construction started in larger scales. Additionally, more then 4500 large enterprises were found, including prominent Uralmash, plants for plant construction, metallurgic plants and other enterprises of heavy industry. According to Soviet statistical data, for the five year period industrial production increased 120%. The second five year plan was much more successful according to the results then the first one, at least in the heavy industry. In 1937 17,7 million tones of steel, 128 million of tones of coal, 28, 5 million of tones of oil, 48,5 thousands of machine units were produced in the USSR (Tucher 12, 34-36) .

The situation with agricultural sector was worse, due to inability to supply enterprises with raw materials. The situation could be also explained with the fact that there were almost no light industry plants built during the first five years of industrialization, as all forces were thrown to the heavy industry sector.

Much attention was paid also to the primary industry. Generally speaking, industrialization was a dramatic shoot forward for USSR and a forward on a completely new way without foreign investments, without revenues of private enterprises, but for the single name of collective interests, though formulated as a will of governmental institutions. Up to the end of the second five year period all industry in the USSR was state owned. The whole territory of Soviet Union was covered with the wave of proactive transformations and profitably distinguished country against the backdrop of global crisis.

2.2 Khrushchev’s agricultural reforms
There were two periods in Khrushchev’s government with different economic outcomes. The first period that lasted from 1953 till 1958 is referred as positive, and the second from 1959 till his removal in 1964, the one with dominating negative results. Starting with the second half of 1953 till the end of 1950s, Khrushchev conducted reforms that had a positive impact on the national economy’s rate of development, as well as on the overall well-being of people. The main reason for the success of those reforms lied in the fact that they revived economical methods of national economy government and started with agricultural industry, and therefore obtained a great support from the side of common people. The main reason for the defeat of the reforms – they were not adequately supported with the democratization of political system. Although the repressive system was broken, its basis- command and administration system was left without any changes. Therefore, in several years, many reforms began to “congeal” with the efforts of reformers themselves.

First changes concern the smallest individual lots of collective farmers. Policy of easing the tax burden was held: taxes were decreased almost twice and debts were written down.

After a failure crop of 1953 the situation became so severe that peasants began to arrive to the big cities to buy bread. Immediate changes were not possible due to need of fertilizers, installation of irrigation systems, techniques, things that could not be created in one day. Therefore, Khrushchev and his team decided to initiate the production tillable lands in the semiarid region on the east of the country that were not used (Siberia, Kazakhstan, etc.) Clearing put away revival of old-arable cultivated area of Russian land. But still the initial phase of clearing will remain in the history of the USSR as a genuine labor epic, as a realistic flare of enthusiasm when country was going to the historical turn of XX party convention (Kellen 43).

Country was living with renovation. Numerous meetings were held with industrial workers, workers of construction and transportation industries. This fact itself was new – as before all important decisions were made behind the closed doors. It is obvious that a lot of labor force was needed for clearing that should have been delivered from other regions. Fiscal measures were made to motivate whole families to move to virgin lands, but their living conditions there were extremely poor.

Prices for agricultural products were really low and did not cover all expenses. Crisis was inevitable. As a result, in 1961 Ministry of Agriculture of USSR was reorganized and transformed into consulting institution. Though, it was not efficient. People from villages were moving to the bigger cities to earn for live.

In 1962 government decided to stimulate cattle breeding be increasing prices for meat by1,5 times. New prices did not increase the amount of meat, but increased public disturbance. Of course, there were a lot of wealthy households in the country, but they were more exception then the rule. There were more and more difficulties in the agricultural sector. Next year brought interruption in deliveries not just of meat, milk and butter, but also with bread. There were long lines to bakeries, and people had to stand up at night to buy some bread. Then the anti-crisis decision was found- to buy grain from the USA. This stop-gap measure became organic part of the government up to USSR dissolution. USSR economy supported development of US agriculture, when its own farming enterprises were constantly suppressed. As a result, 7 year old plan of national economy development (1959-1965) failed with 15% growth instead of planned 70%.

2.3 Brezhnev’s stagnation
The period or the epoch of stagnation is generally referred to as almost 20-year period in the history of USSR from 1964 till 1982. It is also frequently called the epoch of developed socialism.

In 1965 the decision to carry out economic reform was made. It was expected that reform would correct all existent mistakes in the economy of the country. New government was oriented on stability. Stability could have been achieved only by refusing from the political course of previous years, from ‘destalinization’ policy and reforms. The new economic reform was the following: to decrease plan rates, to create foundation of fiscal stimulation at the enterprises, to introduce agricultural tax in kind in industry, to credit industrial construction, etc. At first, economic growth increased. But by the early 1970s so many corrections were made, that it literally stopped its activity. It was impossible to introduce economic reform without introduction of democratization in political sphere, which appeared to be the main reason for reform failure.

Insufficient social levels of village citizens, as well as liquidation of “unpromising villages” lead to dramatic “outflow” of citizens from villages to cities. For the period of stagnation annual rate of outflow was about 700 thousand people per year. Import of agricultural products did not resolve the problem of product shortage. In the middle of 1980s food coupons were introduced to population – food shortage problem became very sharp. By the end of 1980s agricultural industry of USSR was in critical state.

2.4 Gorbachev’s crisis
The name of Mikhail Gorbachev is associated with the period of perestroika (1985-1991).

Gorbachev was appointed Secretary General in 1985. In April of the same year at the Plenum of Central Committee he reported the plans of wide reforms, directed on the comprehensive society recovery with the main idea to speed up social and economic development of the country. He was also emphasizing on the human factor in his planned transformation and issued resolution concerning debauchery and alcoholism. During 1985-1986 production of alcohol shorted twice and state budget also felt the shortage of 6 billions of rubles. Finally, in 1988 antialcoholic campaign failed.

Society was ready for changes and enthusiastically accepted the “New Deal” of the government.

Many people did not acknowledge to the full extent reasons and the character of crisis of soviet society. The main idea lied in the fact that Gorbachev along with his environment persuaded society that there was no other way to go. In such a manner, they were going to break down to totalitarian order. A new broom sweeps clean- personnel in the government was changing very quickly.

Economic results of perestroika were not very promising. Budget deficit in 1985 was 17-18 billions of rubles. Next year this index tripled. Gorbachev put the responsibility for the deficit on previous governments, but it was obvious that he has chosen wrong priorities for country’s development.

Political system reform in USSR was held in 1987-1990. The emphasis was put on the democratization of soviet society, improvement of soviet electoral system, as well as free speech. On the December, 1 1988 Supreme Soviet of USSR adopted two laws: “About changes and amendments to Constitution (the Main Law) of the USSR” and “About election of members of parliament of the USSR”.

The start of the USSR breakup happened in March, 1990 when Gorbachev was elected as the President of the USSR. It was the beginning of the liquidation of state system of Soviet power, as the position of the President was not covered there (Kelly 76).
Peak of Gorbachev’s crisis was August putsch that resulted in USSR breakup.

2.5 Yeltsin’s market reforms
When Boris Yeltsin came to power, he immediately started to carry out economical reforms in the country. One of the major Yeltsin’s achievements is adoption of the new democratic Constitution (December, 12 1993).

In the early 1990s, Yeltsin started the process of privatization, campaign of conveyance of state property to the population. Each citizen was given a privatization cheque (voucher) for his share in the state property. At that time period frauds and gangsters thrived. The beginning of 1990s was marked with the formation and development of numerous criminal groups.

In spite of the privatization failure, country was constantly turning to new economic system with private property, as its basis. From the very beginning Yeltsin shaped his course on market economy. Due to economic reforms, each person gained an offing to carry on business. Each gained an offing to evaluate his labor. The situation in the country significantly improved- lines in groceries disappeared; the market became competitive and people got the choice to choose (Desai 17).

On the other hand, transformation to market economy resulted in a series of negative events in the society. At first, it was unemployment and social insecurity of such social classes, as budget sphere, army and retirees. In 1998 the situation resulted in the economic and financial crisis. The problem of depopulation was very sharp.

2.6 Putin’s economic growth
Putin’s main goal was to increase economic independence of Russian Federation. Putin was very accurate in his economic policies, as he had to solve four main problems of the country – reform the taxation system, agricultural sector, develop industry and micro-entrepreneurship (Sakwa 89).

During Putin’s government economic situation in the country greatly improved. Russia stopped making irresponsible borrowings and started to get out of the debt pit. As a result, external debt decreased with a speed of $10 billion per year. He conducted very responsible budget policy that resulted in budget net surplus. The situation in Russia stabilized.

Putin also initiated a reform of natural monopolies of MPS and Gazprom, as well as reform of bank system.

2.7 Contemporary Medvedev’s recession
The present situation in Russia is stabilizing. Due to world economic crisis it is difficult to evaluate Medvedev’s government. The world society still has an impression that he is just a marionette in the Putin’s hands. Outcomes of economic crisis for Russia are very harsh, as its economy extremely depends on the oil prices. Agricultural sector of economy is not suffering significant losses, and at the same time industry had fallen almost to14%. National currency of Russia is stable. Russia is expected to get out of crisis in the third quarter of this year.

3. Climate of North Eastern Eurasia
Climate of North Eastern Eurasia is extremely continental. Many factors influence its formation. There is irregular receipt of the sun, as the territory is very vast. North East is located in three lateral climatic zones: arctic, subarctic and moderate. The main part of the territory is situated in subarctic zone.

Structure of the terrain and surrounding cold water areas determine free penetration of cold continental arctic air masses of Arctic Ocean. Pacific Ocean delivered sea air of moderate zones, which delivers the main amount of precipitates, but its entrance on the territory is restricted with littoral crests.

Climate of North Eastern Eurasia is also influence by Asian maximum, the Aleutian Low, circulation systems, generated above Arctic, as well as their seasonal change (Lengyel 111).

4. Tundra, Taiga and Steppe

Tundra is the country of eternal frost, long winter dark and short polar summer with nonsetting barely warming sun. Such climate conditions are not favorable for plants. The amount of sun heat is twice as little as in moderate climate. The period for plant development is very short- 2-3 months. Winter lasts for about 8 months. The most favorable tundra part for plants is Kolsky peninsula. Climate is more severe to the east – lower temperatures, less precipitations, summer is shorter. Severe winds blow in tundra, in winter wind speed can reach 30-40 m per second. Soil is always cold and has bad permeability.

Fauna of tundra is very poor, though very original. Most of the wild animals migrate during winter period, but there are some exceptions- lemmings, who not just continue to build their tunnels under snow, but also propagate during tundra’s severe winter.

Taiga is the zone of conifer forests, located in the moderate zone of north hemisphere. In Eurasia it occupies more then 500 million hectares.

Following trees prevail in taiga: fir-tree, silver fir, cedar, larch and pine.

Taiga’s fauna is more diverse then in tundra, though still rather poor when taking into consideration its huge area. Among taiga’s fauna it is possible to differentiate: flying squirrel, squirrel, ground squirrel, weasel, sable, lynx, elk, wolf, fox, black-cock, Siberian jay, etc.

Steppe in North Eastern Eurasia is the region of high atmosphere pressure. From west to east average annual temperature changes from +90 to -5, 70 ºC (the length of frost-free period decreases from 300 to 100 days). The climate is becoming more continental that is stipulated with Siberian anticyclone influence. Steppe is very arid zone, not just due to small amount of precipitations, but also because the main part of them die and plants are not able to assimilate it because of high insolation.

There are not many forests in steppe zone. In steppe prevails desert vegetation and grassland and shrubs. Crop cultivation is almost impossible in this zone (Mote 66, 78).

The wildlife flourishes in steppe in spite of an extreme climate. It is possible to see wild camel, wild ass, Gobi bear and black-tailed gazelle, furry marmot and rare saiga antilope, wild boar, etc. Speaking of bird, there are warblers, sand grouses, houbara bustards and saxaul sparrows, finches and the cinereous vultures, grey demoiselle cranes, hoopoes, odd eagle, steppe eagle, saker falcon, black kite, etc.

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