Question

With reference to the break-up of the USSR, answer the following questions :
To what extent was the failure of Mikhail Gorbachev’s economic reforms responsible for the end of the Soviet Union?

Answer 1

Though Mikhail Gorbachev’s economic policy was positive in all aspects, it failed to bring about changes in society. The stagnant economic growth in 1988 and 1989 and the previous years disillusioned the people. The national income fell in 1990 and continued to fall by about 15% in 1991.

The major cause of the crisis is said to be the Law on State Enterprises. The wages were dependent on output, and as output was measured by their value in roubles, the factories were not interested in increasing overall output. It concentrated on the production of more expensive goods and reduced output of cheaper goods.

This increased wages and the government was forced to print more money. This led to inflation and deficit in the government budget. Production of essentials goods reduced was in short supply and the queues in the towns for it was endless. The workers in the biggest coal mining area in the USSR went on strike as they did not even have soaps to wash. They were disciplined and well-organized and put forward their demands, which included better living and working conditions, proper and adequate supply of food, share in profits, and more local control over the mines.

The government considered many of their demands and made a promise to reorganize the industrial sector.

However, the economic situation was so grave that by early 1990, about a quarter of the population was living below the poverty line. The large families, the unemployed and the pensioners were worst affected. The economic crisis was one of the major reasons for the break down of the Soviet Union.