Yeltsin’s Failures in Shock Therapy Market Transition
“We have defended political freedom. Now we have to give economic [freedom], to remove all barriers to the freedom of enterprises and entrepreneurship, to give people possibilities to work and receive as much as they earn.” – Boris Yeltsin (Brady, p.11)
During the early stages of the formation of the Russian Federation under Boris Yeltsin, the economic changes and turmoil reached a critical turning point. The pressure to have rapid democratization and transition to a free market economy created a wide variety of issues such as the shock on both the market, people’s livelihood, and movement of trade. Yeltsin promoted a fast transition to a capitalist economy, with his appointment of Yegor Gaidar to the prime minster position who was in charge of …show more content…
One of the major flaws in the shock therapy strategy was underestimating the effects fast privatization would have on individual Russians. According to Brady (1999), “Yeltsin made one serious mistake. He pledged that after a rough six-month transition, Russians would begin to see their lives improve…[however] economic reform would prove to be a far harsher and far longer process than Yeltsin and the reformers envisioned” (Brady, 11). This shows a clear lack of foresight by the Yeltsin administration to take into account the length of time in these transitions and the problems that the ordinary people would face during this time period. Prices skyrocketed, the value of Russian currency dropped dramatically, and the reliance that people had on the system was evaporating. Yeltsin should have waited instead of trying to both drastically change the economy and the
“We have defended political freedom. Now we have to give economic [freedom], to remove all barriers to the freedom of enterprises and entrepreneurship, to give people possibilities to work and receive as much as they earn.” – Boris Yeltsin (Brady, p.11)
During the early stages of the formation of the Russian Federation under Boris Yeltsin, the economic changes and turmoil reached a critical turning point. The pressure to have rapid democratization and transition to a free market economy created a wide variety of issues such as the shock on both the market, people’s livelihood, and movement of trade. Yeltsin promoted a fast transition to a capitalist economy, with his appointment of Yegor Gaidar to the prime minster position who was in charge of …show more content…
One of the major flaws in the shock therapy strategy was underestimating the effects fast privatization would have on individual Russians. According to Brady (1999), “Yeltsin made one serious mistake. He pledged that after a rough six-month transition, Russians would begin to see their lives improve…[however] economic reform would prove to be a far harsher and far longer process than Yeltsin and the reformers envisioned” (Brady, 11). This shows a clear lack of foresight by the Yeltsin administration to take into account the length of time in these transitions and the problems that the ordinary people would face during this time period. Prices skyrocketed, the value of Russian currency dropped dramatically, and the reliance that people had on the system was evaporating. Yeltsin should have waited instead of trying to both drastically change the economy and the