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Encyclopedia > Perestroika
Russian term
Translit: perestroika
English: restructuring
Poster showing Mikhail Gorbachev, with the slogan perestroika
Poster showing Mikhail Gorbachev, with the slogan perestroika

Perestroika (pronunciation , Russian: перестро́йка IPA: [pʲɪrʲɪˈstrojkə]) is the Russian term (which passed into English) for the economic reforms introduced in June 1985 by the Soviet leader Mikhail Gorbachev. Its literal meaning is "restructuring", referring to the restructuring of the Soviet economy. There exist many possible systems for transliterating the Cyrillic alphabet of the Russian language to English or the Latin alphabet. ... Look up translate in Wiktionary, the free dictionary. ... The title screen During the game End of the game statistics Perestroika (also known as Toppler) is a Russian language computer game released by a small software developer called Locis in the Soviet Union in 1990/1991, and named after Mikhail Gorbachevs policy of Perestroika. ... Picture taken from organizational site: http://images. ... Picture taken from organizational site: http://images. ... Image File history File links Ru-perestroika. ... Articles with similar titles include the NATO phonetic alphabet, which has also informally been called the “International Phonetic Alphabet”. For information on how to read IPA transcriptions of English words, see IPA chart for English. ... 1985 (MCMLXXXV) was a common year starting on Tuesday of the Gregorian calendar. ... Soviet redirects here. ... Mikhail Sergeyevich Gorbachev (Russian: ), surname more accurately romanized as Gorbachyov; born March 2, 1931) is a Russian politician. ...


The perestroika program

During the initial period (1985-1991) of Mikhail Gorbachev's time in power, he talked about modifying central planning, but did not make any truly fundamental changes (uskoreniye, acceleration). Gorbachev and his team of economic advisers then introduced more fundamental reforms, which became known as perestroika (economic restructuring). A planned economy is an economic system in which decisions about the production, allocation and consumption of goods and services are planned ahead of time, usually in a centralized fashion, though some proposed systems favour decentralized planning. ... Uskoreniye (Russian: ) was a slogan and a politics announced by Mikhail Gorbachev on April 20 1985 at a Party Plenum, aimed at the acceleration of social and economical development of the Soviet Union. ...

At the June 1987 plenary session of the Central Committee of the Communist Party of the Soviet Union (CPSU), Gorbachev presented his "basic theses," which laid the political foundation of economic reform for the remainder of the existence of the Soviet Union. The Central Committee, abbreviated in Russian as ЦК, Tseka, was the highest body of the Communist Party of the Soviet Union (CPSU). ... The Communist Party of the Soviet Union (Russian: Коммунисти́ческая Па́ртия Сове́тского Сою́за = КПСС) was the name used by the successors of the Bolshevik faction of the Russian Social-Democratic Labour Party from 1952 to 1991, but the wording Communist Party was present in the partys name since 1918 when the Bolsheviks became the Russian...

In July 1987, the Supreme Soviet passed the Law on State Enterprise. The law stipulated that state enterprises were free to determine output levels based on demand from consumers and other enterprises. Enterprises had to fulfill state orders, but they could dispose of the remaining output as they saw fit. Enterprises bought inputs from suppliers at negotiated contract prices. Under the law, enterprises became self-financing; that is, they had to cover expenses (wages, taxes, supplies, and debt service) through revenues. No longer was the government to rescue unprofitable enterprises that could face bankruptcy. Finally, the law shifted control over the enterprise operations from ministries to elected workers' collectives. Gosplan's (Russian: Государственный комитет по планированию, State Committee for Planning) responsibilities were to supply general guidelines and national investment priorities, not to formulate detailed production plans. The Supreme Soviet (Russian: , Verhovniy Sovet, literally the Supreme Council) comprised the highest legislative body in the Soviet Union in the interim of the sessions of the Congress of Soviets, and the only one with the power to pass constitutional amendments. ... Gosplan (Госпла́н) was the committee for economic planning in the Soviet Union. ...

The Law on Cooperatives, enacted in May 1988, was perhaps the most radical of the economic reforms during the early part of the Gorbachev regime. For the first time since Vladimir Lenin's New Economic Policy, the law permitted private ownership of businesses in the services, manufacturing, and foreign-trade sectors. The law initially imposed high taxes and employment restrictions, but it later revised these to avoid discouraging private-sector activity. Under this provision, cooperative restaurants, shops, and manufacturers became part of the Soviet scene. Law on Cooperatives USSR Supreme Soviet, Law on Cooperatives. ... 1988 (MCMLXXXVIII) was a leap year starting on Friday of the Gregorian calendar. ... “Lenin” redirects here. ... Silver Ruble 1924 Gold Chervonetz (1979) The New Economic Policy (NEP) (Russian: Новая экономическая политика - Novaya Ekonomicheskaya Politika or НЭП) was officially decided in the course of the 10th Congress of the All-Russian Communist Party. ... This page deals with property as ownership rights. ...

Gorbachev brought perestroika to the Soviet Union's foreign economic sector with measures that Soviet economists considered bold at that time. His program virtually eliminated the monopoly that the Ministry of Foreign Trade had once held on most trade operations. It permitted the ministries of the various industrial and agricultural branches to conduct foreign trade in sectors under their responsibility rather than having to operate indirectly through the bureaucracy of trade ministry organizations. In addition, regional and local organizations and individual state enterprises were permitted to conduct foreign trade. This change was an attempt to redress a major imperfection in the Soviet foreign trade regime: the lack of contact between Soviet end users and suppliers and their foreign partners.

The most significant of Gorbachev's reforms in the foreign economic sector allowed foreigners to invest in the Soviet Union in the form of joint ventures with Soviet ministries, state enterprises, and cooperatives. The original version of the Soviet Joint Venture Law, which went into effect in June 1987, limited foreign shares of a Soviet venture to 49 percent and required that Soviet citizens occupy the positions of chairman and general manager. After potential Western partners complained, the government revised the regulations to allow majority foreign ownership and control. Under the terms of the Joint Venture Law, the Soviet partner supplied labor, infrastructure, and a potentially large domestic market. The foreign partner supplied capital, technology, entrepreneurial expertise, and, in many cases, products and services of world competitive quality. A joint venture is a business relationship between two or more parties to undertake economic activity together. ...

Gorbachev's economic changes did not do much to restart the country's sluggish economy in the late 1980s. The reforms decentralized things to some extent, although price controls remained, as did the ruble's inconvertibility and mostly government control over the means of production. The 1980s refers to the years from 1980 to 1989. ...

By 1990 the government had virtually lost control over economic conditions. Government spending increased sharply as an increasing number of unprofitable enterprises required state support and consumer price subsidies continued. Tax revenues declined because revenues from the sales of vodka plummeted during the anti-alcohol campaign and because republic and local governments withheld tax revenues from the central government under the growing spirit of regional autonomy. The elimination of central control over production decisions, especially in the consumer goods sector, led to the breakdown in traditional supply-demand relationships without contributing to the formation of new ones. Thus, instead of streamlining the system, Gorbachev's decentralization caused new production bottlenecks. Government spending consists of government purchases, including transfer payments, which can be financed by seigniorage (the creation of money for government funding), taxes, or government borrowing. ...

Unforeseen results of reform

The new system bore the characteristics of neither central planning nor a market economy. Instead, the Soviet economy went from stagnation to deterioration. At the end of 1991, when the union officially dissolved, the national economy was in a virtual tailspin. In 1991 Soviet GDP had declined by 17 percent and was declining at an accelerating rate. Overt inflation was becoming a major problem. Between 1990 and 1991, retail prices in the Soviet Union increased 140 percent. 1991 (MCMXCI) was a common year starting on Tuesday of the Gregorian calendar. ...

Under these conditions, the general quality of life for the Soviet people deteriorated. The public traditionally faced shortages of durable goods, but under Gorbachev, food, clothes, and other basic necessities were in short supply. Fueled by the liberalized atmosphere of Gorbachev's glasnost and by the general improvement in information access in the late 1980s, public dissatisfaction with economic conditions was much more overt than ever before in the Soviet period. The foreign-trade sector of the Soviet economy also showed signs of deterioration. The total Soviet hard-currency debt increased appreciably, and the Soviet Union, which had established an impeccable record for debt repayment in earlier decades, had accumulated sizable arrears by 1990. It did free up the arts and social sciences in the region and enabled formerly banned literature and films to be reconstructed to a degree, with filmmakers like Sergei Parajanov now out of prison.   (Russian: IPA: ) is a Russian word for transparency or openness. ... Sergei Parajanov and Lilya Brik, a sister of Aragons wife Elsa Triolet. ...

In sum, the Soviet Union left a legacy of economic inefficiency and deterioration to the fifteen constituent republics after its breakup in December 1991. Arguably, the shortcomings of the Gorbachev reforms had contributed to the economic decline and eventual destruction of the Soviet Union, leaving Russia and the other successor states to pick up the pieces and to try to mold market economies.[citation needed] At the same time, the Gorbachev programs did start Russia on the precarious road to full-scale economic reform. A market economy (also called free market economy or a free enterprise economy) is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system. ...

The failures of perestroika have led Alexander Zinovyev to coin the word catastroika (Russian катастройка), a portmanteau of катастрофа - "catastrophe" and perestroika. Zinovyev wrote: "the effect of explanatory work has appeared the return desirable. All they wished to avoid, has occurred with double the force... Queues lengthened. Prices in the markets have jumped. At home, in queues, in transport, on work, at assemblies people have openly worn the perestroyka. Uncountable jokes were told. Someone has learned, that the word "perestroyka" is translated on the Greek language by a word "accident". On this basis a new word "katastroyka" has appeared. Pensioners and older Party members saw in perestroyka the counterrevolution and betrayal of Lenin's cause". Philip Hanson used this word in his book, From Stagnation to Catastroika: Commentaries on the Soviet Economy, 1983-1991. Alexander Zinovyev (also transliterated as Zinoviev, Russian: Александр Александрович Зиновьев), born on September 29, 1922, is a well-known Russian philosopher, sociologist and fiction writer. ... A portmanteau (IPA pronunciation: ) or blend is a word or morpheme which fuses two or more words or parts of words to give a combined meaning. ... Catastrophe (Gk. ... Greek ( IPA: or IPA: — Hellenic) is an Indo-European language with a documented history of 3,500 years, the longest of any single language in that language family. ... A counterrevolutionary is anyone who opposes a revolution, particularly those who act after a revolution to try to overturn or reverse it, in full or in part. ... Vladimir Ilyich Lenin ( Russian: Влади́мир Ильи́ч Ле́нин  listen?), original surname Ulyanov (Улья́нов) ( April 22 (April 10 ( O.S.)), 1870 – January 21, 1924), was a...

Comparison with China

Perestroika and Deng Xiaoping's economic reforms have similar origins but very different effects on their respective countries' economies. Both efforts occurred in large communist countries attempting to modernize their economies, but while China's GDP has grown consistently since the late 1980s (albeit from a much lower level), national GDP in the USSR and in many of its successor states fell precipitously throughout the 1990s[1]. Deng Xiaoping   (Simplified Chinese: ; Traditional Chinese: ; pinyin: ; Wade-Giles: Teng Hsiao-ping; August 22, 1904–February 19, 1997) was a leader in the Communist Party of China (CCP). ... Economic reforms have triggered internal migrations within China. ...

Gorbachev's reforms were largely a top-down attempt at reform, and maintained many of the macroeconomic aspects of the command economy (including price controls, inconvertibility of the ruble, exclusion of private property ownership, and the government monopoly over most means of production). Reform was largely focused on industry and on cooperatives, and a limited role was given to the development of foreign investment and international trade. Factory managers were expected to meet state demands for goods, but to find their own funding. Perestroika reforms went far enough to create new bottlenecks in the Soviet economy, but arguably did not go far enough to effectively streamline it. Chinese economic reform was, by contrast, a bottom-up attempt at reform, focusing on light industry and agriculture (namely allowing peasants to sell produce grown on private holdings at market prices). Economic reforms were fostered through the development of "Special Economic Zones", designed for export and to attract foreign investment, municipally-managed Township and Village Enterprises and a "dual pricing" system leading to the steady phasing out of state-dictated prices. Greater latitude was given to managers of state-owned factories, while capital was made available to them through a reformed banking system and through fiscal policies (in contrast to the fiscal anarchy and fall in revenue experienced by the Soviet government during perestroika). A Special Economic Zone (SEZ) is a geographical region that has economic laws different from a countrys typical economic laws. ... Within China, most of the economic growth of the 1980s and 1990s with the notable exception of Dengs initial land reforms have been concentrated in the coastal cities such as Shanghai and Guangzhou. ...

Another fundamental difference is that where perestroika was accompanied by greater political freedoms under Gorbachev's glasnost policies, Chinese economic reform has been accompanied by continued authoritarian rule and a suppression of political dissidents, most notably at Tiananmen Square.   (Russian: IPA: ) is a Russian word for transparency or openness. ... Bold text:This article applies to political ideologies. ... The Tiananmen Square protests of 1989 were a series of demonstrations led by students, intellectuals, and labour activists in the Peoples Republic of China (PRC) between April 15, 1989 and June 4, 1989. ...


The perestroika reforms began the process leading to the dismantling of the Soviet-era command economy and its replacement with a market economy. However, the process arguably exacerbated already existing social and economic tensions within the Soviet Union, and no doubt helped to further nationalism among the constituent republics, as well as social fragmentation. The economic chaos that began with perestroika helped both to empower organized crime and allowed businessmen with the right connections to amass great personal fortunes as Russia's oligarchs. The economic freedoms instituted by Gorbachev under perestroika and the problems caused by these reforms arguably helped to begin the unraveling of Soviet society and hastened the end of the Soviet Union. This box:      A planned economy is an economic system in which a single agency makes all decisions about the production and allocation of goods and services. ... A market economy (also called free market economy or a free enterprise economy) is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system. ... This article or section does not cite its references or sources. ... Business oligarch is a synonym of business magnate. The inclusion of the word oligarch describes the significant influence such wealthy people may have on the life of a state. ...

See also

Dakin Building The Dakin Building is an architectural award winning class A office building on the San Francisco Bay in Brisbane, California. ... This is a history of the Soviet Union from 1985 to 1991. ... Uskoreniye (Russian: ) was a slogan and a politics announced by Mikhail Gorbachev on April 20 1985 at a Party Plenum, aimed at the acceleration of social and economical development of the Soviet Union. ...   (Russian: IPA: ) is a Russian word for transparency or openness. ... This article or section seems not to be written in the formal tone expected of an encyclopedia entry. ... 500 Days Program (Russian: ) was an ambitious program to overcome the economic crisis in the Soviet Union by means of transition into market economy. ... Leonid Brezhnev. ... The Sumgait Massacre is the name that refers to a pogrom led by Azeris that targeted Armenian living in the seaside town of Sumgait, in the former Azerbaijan Soviet Socialist Republic. ... This article does not cite its references or sources. ... Combatants Republic of Nagorno-Karabakh1 Republic of Armenia 2 CIS mercenaries Republic of Azerbaijan Afghan Mujahideen 3 Chechen Volunteers 4 CIS mercenaries Commanders Samvel Babayan, Hemayag Haroyan, Monte Melkonian, Vazgen Sargsyan, Arkady Ter-Tatevosyan Ä°sgandar Hamidov, Suret Huseynov, Rahim Gaziev, Shamil Basayev Casualties 6,000 dead, 25,000 wounded 17... Combatants Abkhaz separatists Confederation of Mountain Peoples of the Caucasus Russian Cossacks Russian Forces1 Georgian Interior and Defense Ministry forces Paramilitary groups and volunteer batallions Commanders Iysuph Soslanbekov, Musa Shanibov, Shamil Basaev, Beslan Barghandjia, Anri Djergenia Geno Adamia, Guram Gubelashvili, Gia Kharkharashvili, Davit Tevzadze, Soso Akhalaia Casualties ~2,500-4... Combatants Transnistria Russian volunteers Ukrainian volunteers Moldova Casualties 823 Transnistrian fatalities,[1] 90 Cossacks,[2] and an unknown number of other casualties ~1,000 total casualties Official figures: 172 combatants, ~400 civilians [] The War of Transnistria involved armed clashes on a limited scale that broke out between the Transnistrian separatists... A photo of a child who survived Khojaly. ...

Further reading

  • Perestroika: New Thinking for Our Country and the World, Mikhail Gorbachev, Perennial Library, Harper & Row, 1988, trade paperback, 297 pages, ISBN 0-06-091528-5
  • The Perilous road to the Market, Prem Shankar Jha, Pluto Press, 304 pages, ISBN 0745318517

External links

  Results from FactBites:
Perestroika Defined (1987) (383 words)
Perestroika means overcoming the stagnation process, breaking down the braking mechanism, creating a dependable and effective mechanism for acceleration of social and economic progress and giving it greater dynamism.
Perestroika is the all-round intensification of the Soviet economy, the revival and development of the principles of democratic centralism in running the national economy, the universal introduction of economic methods, the renunciation of management by injunction and by administrative methods, and the overall encouragement of innovation and socialist enterprise.
Perestroika means the elimination from society of the distortions of socialist ethics, the consistent implementation of the principles of social justice.
Perestroika, by Marshall I. Goldman: The Concise Encyclopedia of Economics: Library of Economics and Liberty (1770 words)
Although the exact meaning of Gorbachev's perestroika changed from year to year, in those early months he spoke of intensifying and accelerating production in the machine tool industry.
The odds are that while perestroika may not require centuries to implement, it will not come quickly or painlessly.
Marshall I. Goldman is the Kathryn W. Davis Professor of Russian Economics at Wellesley College, and the associate director of the Russian Research Center at Harvard University.
  More results at FactBites »



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