When the Soviet Union dissolved 30 years ago this month, on December 25, 1991, its end followed decades of economic dysfunction. Soviet leader Mikhail Gorbachev, hoping to implement reforms, referred to the 1970s and 1980s as zastoi, the era of stagnation. Yet though he recognized the problem, Gorbachev couldn’t save the ailing socialist system. Indeed, his failed attempt at systematic reform ultimately led to the Soviet Union’s collapse.
On the surface, Russia’s economy appears similarly dysfunctional today. Per capita incomes have not improved over the past decade. Russia’s share of global output has declined since 2008. And large sectors of the economy remain technologically backward or in desperate need of modernization. The general economic state could once again be described as “stagnation.”
Just as Communist Party leaders in Beijing have studied Soviet history in an effort to avert its repetition, so have leaders in the Kremlin.
Yet Russian President Vladimir Putin and his government are unlikely to suffer the same fate as their Soviet forebears.
They have learned the lessons of failed Soviet attempts to reverse decline in the 1970s and 1980s, and many key attributes of the Russian economy and Russian economic policy reflect a desire to avoid repeating the Soviet experience under Gorbachev. As the Russian economist Sergei Guriev recently remarked, “Russia’s macroeconomic policy is much more conservative, inflation is under control, there are large reserves, a balanced budget and no external debt,” and as a market economy Russia is “much more efficient and resilient” than the Soviet Union.
Read the full article from Foreign Affairs.
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