Russia' Economic Transition
In August of 1991, the collapse of the communist system in the USSR and
it's neighboring republics occurred. Out of the smoke emerged fifteen new
republics and a union known as the Commonwealth of Independent States. These new
regimes faced formidable obstacles. The collapse brought massive inflation which
in turn forced the economy into a spiraling decline and a state of almost
worthless value. Many people were quick to point the finger at their communist
past, and even more eager to lay blame. Traditional communist ideology was to
"provide for every individual an equal amount of goods and services, thus
creating a state of equality amongst the populous" (Leveler, 16). Many people
felt as if their current hardships could be blamed on the communists and their
economic policies, specifically their "Core-Periphery" plan.
The communist sponsored "Core-Periphery" economic policy that was
evident in Russia was quite simplistic in nature. The theory, traditionally used
to describe inter-continental trading and production, was adapted for use in the
Russian economic zones. The theory was as follows; Areas which surround the
capital (core region), usually rich in one material or another, would be used
for the extraction of raw materials. These materials would then be shipped back
to the capital in order to be manufactured into goods. From there, the
manufactured products would be shipped back to the surrounding regions
(periphery region) for resale. The citizens of Russia were surviving on this
system, but barely. The Core-Periphery policy was not efficient, nor effective,
for usually a product needed on one side of the federation, was produced at the
other end. Factors such as transportation costs and adequate use of human
resources was very inefficient and cost-consuming. Strong influences from the
world urged Russia to make the transition into the market-oriented economy. This
seemed tempting, for the market-oriented... [continues]
In August of 1991, the collapse of the communist system in the USSR and
it's neighboring republics occurred. Out of the smoke emerged fifteen new
republics and a union known as the Commonwealth of Independent States. These new
regimes faced formidable obstacles. The collapse brought massive inflation which
in turn forced the economy into a spiraling decline and a state of almost
worthless value. Many people were quick to point the finger at their communist
past, and even more eager to lay blame. Traditional communist ideology was to
"provide for every individual an equal amount of goods and services, thus
creating a state of equality amongst the populous" (Leveler, 16). Many people
felt as if their current hardships could be blamed on the communists and their
economic policies, specifically their "Core-Periphery" plan.
The communist sponsored "Core-Periphery" economic policy that was
evident in Russia was quite simplistic in nature. The theory, traditionally used
to describe inter-continental trading and production, was adapted for use in the
Russian economic zones. The theory was as follows; Areas which surround the
capital (core region), usually rich in one material or another, would be used
for the extraction of raw materials. These materials would then be shipped back
to the capital in order to be manufactured into goods. From there, the
manufactured products would be shipped back to the surrounding regions
(periphery region) for resale. The citizens of Russia were surviving on this
system, but barely. The Core-Periphery policy was not efficient, nor effective,
for usually a product needed on one side of the federation, was produced at the
other end. Factors such as transportation costs and adequate use of human
resources was very inefficient and cost-consuming. Strong influences from the
world urged Russia to make the transition into the market-oriented economy. This
seemed tempting, for the market-oriented... [continues]
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