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Subject: Fascinating insight into Russian instability
This article goes into some detailed but easily accessible analysis of the rise and fall of modern Russia. The premise of the article is that oil and grain are two fundamentally important issues for Russia. First, they needed grain:
And then, the oil, which Russia needed to pay for imported grain. Their entire economy became based, more or less, on exporting oil and gas to pay for grain imports. This was fine for a time, and the oil crisis of the 1970s was good to them as prices skyrocketed, but then...
Their policy of doing nothing for fear of doing the wrong thing was, as you might expect, disasterous. Without money the Soviet Union had to borrow from the west to hold off massive famines, and the West would give these loans only under certain conditions, namely that the USSR would not militarily crush the revolting smaller members of the union. Given their chance, countries like Lithuania broke free of Soviet control, and and then leader Gorbachev's options were simple: save the Union and starve to death, or let them secede and live another year.
The collapse of the Soviet Union was abrupt. It took only six years for an alarming situation in 1995 to bring complete dissolution to the USSR. Russia has been cautious about spending its budget surpluses since then, in order to create a buffer between hard times and utter ruin. If oil prices drop again, however, there's only two or three years of control in the coffers and then it's hard times indeed.
The article goes on to say that Russia may now know, but not be prepared to admit, that democracy is a far better solution for a nation in times of crisis. For all its strength and ambition, an authoritarian regime cannot act nimbly enough when it really counts.
Quote by The Article:The solution preferred by Joseph Stalin was the expropriation of peasants' property, forced collectivization, and extraction of grain. Judging from the available documents, the essence of this decision was relatively simple. Bukharin and Rykov essentially told Stalin: "In a peasant country, it is impossible to extract grain by force. There will be civil war." Stalin answered, "I will do it nonetheless."
The result of the disastrous agriculture policy implemented between the late 1920s and the early 1950s was the sharpest fall of productivity experienced by a major country in the twentieth century.
And then, the oil, which Russia needed to pay for imported grain. Their entire economy became based, more or less, on exporting oil and gas to pay for grain imports. This was fine for a time, and the oil crisis of the 1970s was good to them as prices skyrocketed, but then...
Quote by The Article:The timeline of the collapse of the Soviet Union can be traced to September 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms.
As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive. The Soviet leadership was confronted with a difficult decision on how to adjust.
Their policy of doing nothing for fear of doing the wrong thing was, as you might expect, disasterous. Without money the Soviet Union had to borrow from the west to hold off massive famines, and the West would give these loans only under certain conditions, namely that the USSR would not militarily crush the revolting smaller members of the union. Given their chance, countries like Lithuania broke free of Soviet control, and and then leader Gorbachev's options were simple: save the Union and starve to death, or let them secede and live another year.
The collapse of the Soviet Union was abrupt. It took only six years for an alarming situation in 1995 to bring complete dissolution to the USSR. Russia has been cautious about spending its budget surpluses since then, in order to create a buffer between hard times and utter ruin. If oil prices drop again, however, there's only two or three years of control in the coffers and then it's hard times indeed.
The article goes on to say that Russia may now know, but not be prepared to admit, that democracy is a far better solution for a nation in times of crisis. For all its strength and ambition, an authoritarian regime cannot act nimbly enough when it really counts.
BLEARGH