Economic Reform in Russia started in the year of 1990 to achieve macroeconomic stability and to restructure the country’s economic framework. Another goal of the economic reform was to open the market for the foreign investors to connect the Russian economy with the other countries of the world.
Reasons Behind the Economic Reform:
Before 1990, Russia was undergoing crisis due to the following reasons:
- The monetary policies were not able to ensure the economic growth.
- Prices and exchange rates were unstable.
- Foreign traders and investors could not enter the Russian market.
- Macroeconomic stability was not there.
- The Russian economic policies had been dominated by the government for a long time. So the production and growth rate decreased.
Russian economic reform started by hitting the issues like macroeconomic stability. In 1991 the then Russian president started the program of economic reform. The parliament of Russia had given a decree to the president to accelerate the reform program.
The following reforms were undertaken:
- Government’s expenditure was minimized by reducing the investments in defense and public investments projects.
- The government’s budget deficit was planned to bring down from 20% of Gross Domestic Product ( in 1991) to 9% by the year of 1992.
- The Russian government had imposed some new taxes and improved the tax collection process to extend the state revenue.
- The reform program aimed to depreciate the rate of inflation from 12% to 3.5% within the year 1993.
Proposals for further economic reform:
For further economic reform the Russian government started to focus on land reform and judicial reform.
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Last Updated on : 26th June 2013