That same year, the Soviet Union signed a normalization agreement with the European Economic Community. The Soviet government’s hope was to gain an understanding of Western management and marketing processes and learn new manufacturing skills. Gorbachev’s failed plan for a slow, gradual economic reform negated any positive effects the reforms may have had, and the economy fully collapsed.Ī few years prior, in April of 1988, Soviet and American trade delegations met in Moscow to examine possibly expanding trade relations. Gorbachev’s continued promises that his reforms would drastically improve living conditions alienated citizens who didn’t see the promises come to fruition. He also began leasing state-owned land to farmers and cut state spending on the military. For example, he tried to stop the production and sale of alcohol, forcing the industry underground. Gorbachev’s attempts to modernize the Soviet system failed, in part, because he was unable to implement a complete overhaul, instead of making a series of minor reforms. ![]() In September 1990, Gorbachev rejected Russian economist and politician Grigory Yavlinsky’s 500-day economic reform plan, which lost the former any remaining support he had from the Soviet people, leaving him with few allies. Soviet trade with Western countries largely consisted of currency and Soviet oil exports, as well as trading one manufactured good for another (Pepsi for Stolichnaya vodka, for example). In 1988, Soviet trade with socialist countries amounted to 62 percent of the country’s total foreign trade, while 15 percent of its foreign trade was made with Third World countries. The trading the Soviet Union did engage in was mostly with communist countries, many of which were in Eastern Europe. The Soviet economy historically had relied little on foreign trade because of the region’s large energy and raw material base in 1985, exports and imports accounted for just 4 percent of the Soviet GNP. Grocery store shelves were often empty, and lines for food were long. Eastern European Economy, Economic Collapse, and Foreign Tradeīy the time Gorbachev took office in 1985, the Soviet economy had been stagnant for 20 years and was badly in need of reform to wit, the country’s gross national product (GNP) went from 5.8% in 1940 to 2.6% in 1970. Between 19, the gross national product in Soviet countries fell by 20 percent, ushering in a period of complete economic breakdown. ![]() It also prompted many cultural changes and social upheavals in former Soviet nations and smaller neighboring communist countries. Its downfall increased the United States’ influence as a global power and created an opportunity for corruption and crime in Russia. The dismantling of the Soviet Union had many long-lasting effects on the global economy and the region’s foreign trade. By the summer of 1990, all the formerly communist Eastern European officials had been replaced by democratically elected governments, setting the stage for the region’s reintegration into Western economic and political spheres. By the end of 1989, eight of the nine remaining republics had declared independence from Moscow, and the powerful Soviet Union was finally undone. Other countries-such as the Republic of Belarus, the Russian Federation and Ukraine-followed suit, creating the Commonwealth of Independent States. Once the Berlin Wall fell, citizens in Eastern European countries such as Czechoslovakia, Bulgaria and Romania staged protests against their pro-Soviet governments, hastening the collapse of communist regimes across the former Soviet bloc. The Berlin Wall fell on November 9, 1989, leading East and West Germany to officially reunite within a year, ending the Cold War. Gorbachev’s loosening of governmental power created a domino effect in which Eastern European alliances began to crumble, inspiring countries such as Estonia, Lithuania and Latvia to declare their independence. ![]() In order to understand the consequences related to the collapse of the Soviet Union, it is critical to first examine the overarching causes for the USSR’s downfall. Tuition Rates for Military, Spouses, Veteran and First Responders.Professional Development and Certificate.Professional Development and Certificates.
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