1970 Oil Crisis Case Study

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Introduction In 1970, industrialized countries entered a period of structural crisis caused by disproportions in the development of certain spheres and sectors of the economy. The crisis caused the loose of capital from industries with rising costs, forcing them to seek ways to modernize them. Especially acute situation was created in energy-intensive and material-intensive industries, for example, metallurgy. Since the middle of 1970', there were several structural crises and the energy crisis. The energy crisis broke out after the creation of OPEC - the organization of oil producing and exporting countries, as this organization began to determine the size of oil production for each member country of the organization, the size …show more content…
Big attention and focus on the military industry. After the end of the Second World War, the Soviet Union continued to build up the military industry, allocating huge grants for research in this area. As a result, in the 80s, when the whole world successfully mastered light industry, the USSR continued to focus on armament. Of course, the amount of armor-piercing equipment and cold steel was impressive, but with light industry and the agrarian sector everything was not so rosy. If in the late 70's in the West almost all enterprises were automated, then in the USSR there were only a few dozens of such factories. Then we can stated that, the USSR has lagged far behind in the development of industry from other countries of the world.
3. The oil crisis. After the outbreak of the war in the Middle East in the early 1970s, a serious world oil crisis began in 1973. In this situation, the USSR became the largest supplier of oil and rescued a decent amount, which was immediately sent to the development of agriculture and heavy industry. However, as early as the end of the 1970s, the crisis was resolved and a serious outflow of financing from the Soviet economy took place. The authorities in the USSR obviously did not expect such a large outflow of capital, which immediately affected the economic state of the

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