gorby2_111011-e1320853264262Soviet Union, in its last years, was abundant with (economic) problems. Center planned, industrial Soviet economy just could not keep up with, as Charles Ziegler in his book “The History of Russia” puts it, dynamic computer and information-driven economies of Europe, the United States and East Asia. Gross national product was not expanding as expected (only 0.5-2 % annually) and the “underground” economic activity comprised one fifth of total output. Other problems that the Soviet economy was experiencing were its wastefulness (it needed much more raw materials for production then Western economies) therefore it was not environmental friendly and goods were poor quality. The only real earnings were raw materials (oil, natural gas…) and military weapons. Anyhow, Soviet economy succeeded to improve living standard, but on the other hand, people’s expectations as consumers did not match modest improvement. It was time for some kind of change, reform.

After having a career as Party First Secretary for the Stavropol region and membership in the Politburo, in 1985 Michael Gorbachev was appointed General Secretary of the USSR’s Communist Party. It may be assumed that first thought of his name was (and maybe still is) a word “reform” (Perestroika and Glasnost). Relatively young Gorbachev recruited young, reform-minded officials and policy makers, simultaneously retired “old” ones. As Ziegler states, precondition for developing and then implementing any of the reforms was gaining stronger support in the Kremlin. This was an issue because there were many conservative officials who were reluctant to adopt reform plans.

According to Ziegler, Perestroika could be defined as restructuring of the Soviet economy. To be little more specific, that was an attempt to modernize the economy by modifying some of its features (failures), but to keep the basic structure intact. On concrete level, some one of the aim was acceleration of economic performance. Beyond economic measures Gorbachev launched anti-alcohol campaign due to the fact that alcoholism and its repercussions were negatively affecting workers’ productivity and, of course, the productivity of the whole economy. Reduction of shop hours (for alcohol), raising prices, destroying vineyards and other measures showed disastrous results (e.g. the government lost about 10 billion rubles in tax revenues annually). However, Gorbachev continued with Perestroika. In 1986 he presented twelfth Five-Year Plan with some changes such as: legalization of cooperatives (small private businesses), foreign trade liberalization, loosed central control of state enterprises etc. Allowing cooperatives to operate legally automatically meant smaller share of “underground” economy. State enterprises were more independent from the central ministries and were required to cover their costs through sales. In this context, planning meant guidance, not strict provisions on quotas. The role and social status of workers was more emphasized: workers elected their managers, government became sensible about workers’ morale… Gorbachev idea was combination of decentralization and bureaucratic consolidation. However, the presence of state bureaucracies in production and trade system often distorted cooperation between new private businesses and state enterprises (e.g. the only way lumber could be obtained was through the Ministry of Timber).

Due to liberalization of trade, the “reformed” regime hoped for influx of new sophisticated technology. Besides that, there was intention to participate in international economic organizations (WTO, IMF, World Bank). Gorbachev and other “reform-minded” officials accepted the need for market as a main principle of regulation in economic system. The next, maybe crucial, step was to broaden the idea of market to population and also conservative officials. Simple logic assumes that this was a very ambitious venture due to the fact Soviet propaganda have been presenting ideas of market as a regulative mechanism and market economy in general as inefficient and, more important, as exploitative. Gorbachev tried to “soften” that legacy in population’s mind through another big reform project called Glasnost. Glasnost was imagined as a provider of conditions for effective economic transition. It was concentrated on issues like corruption, freedom of press. Another important part of the whole reform process was foreign policy. New foreign policy minister, Eduard Shevardnadze, developed view on national security and foreign policy interests. Relations with USA, China and Western Europe were improved. Soviet reformers were then speaking of human values, European home, end of enemy image and negative propaganda, reduction of military spending and forces.

Despite good ideas and intentions, we all know what happened with the USSR – it collapsed. Ziegler states that Gorbachev and his reformists did not have a grand strategy for change – they were experimenting with moribund system, but this just could not succeed because they were simultaneously trying to preserve key elements of the same system. I would like to draw your attention to complexity of transition/transformation process. It could be inferred that many variables (economic, social, international, internal, identity…) have to be balanced in order to provide conditions for the transition and later function in transformed regime. In the USSR some variables were keeping track with Gorbachev ideas in the context of reforming, but keeping the Union intact, but few of them did not (e.g. national movements in the Soviet republics, identity – meaning accepting and dealing with new way of living, rather strong conservative wing in political elite). These variables were on their on track which was, in a way, opposite to Gorbachev’s plans and therefore made it easier for the USSR to collapse. Main point of this article is that transitions/transformations processes are not “black and white”. There are some, often hidden/non-transparent, factors that could be very influential on the whole process. Democratic transition is a process that requires preparedness on different levels. Some of post-communist countries are still dealing with issues that should have been resolved at the beginning of the transitional process. For some countries, it turns out that those issues are heavily deep-rooted (radical thinkers would say – existential) in every day politics or even social life. Transition is much slower and longer phenomenon than one could think of.

Image Source: http://madmikesamerica.com/2011/11/gorbachev-perestroika-for-america/