1979 Soviet economic reform

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Premier Alexei Kosygin, at the 1967 Glassboro Summit Conference, initiated and created the reform in a joint process with the Central Committee and the Council of Ministers

The 1979 Soviet economic reform, or "Improving planning and reinforcing the effects of the economic mechanism on raising the effectiveness in production and improving the quality of work", was an economic reform initiated by the Alexei Kosygin, the Chairman of the Council of Ministers. During the Leonid Brezhnev's rule of the Union of Soviet Socialist Republics (USSR) the Soviet economy began to stagnate, this period is referred to by historians as the Era of Stagnation. Even after several reform attempts made by Kosygin and his protëgës, the economic situation in the country continued to deteriorate. In contrast to many of his earliest reform initiative, the 1965 economic reform, this reform tried successfully to centralise the economy by enhancing the power's of the ministries.

The reform was never actually fully realised. When Kosygin died in 1980, the reform was practically abandoned. The government led by Nikolai Tikhonov said he would implement the reform during the Eleventh Five-Year Plan (1981–1985) at the 26th Congress. This never happened, and even Brezhnev complained that implementation of the reform had been slow. Anyhow, the reform was more-or-less left unfinished, however, Yuri Andropov's tried to enact a similar themed reform in 1984. The reform is seen by some as the last major pre-perestroika reform initiative put forward by the Soviet government.

The reform

The reform was initiated, and created, by Premier Alexei Kosygin in a joint decision by the Central Committee (CC) and the Council of Ministers.[1] The reform tried to reaffirm, and separate, the economic functions of the state and the ministries. To accomplish this, several procedures were established to ensure that each respective ministry would contribute to the state budget. All ministries were given a fixed budget even if the ministry did not fulfill the five-year plan. The reform also supported giving enterprises more autonomy from the central government and by extending the rights of the ministries by giving them new principles.[2] Another more important aspect of the reform was that it tried to improve labor productivity by introducing new production indicators by the State Standards Committee.[3] As a whole, the reform tried to solve some of the USSR's economic problems by reducing the effects of sectorial barriers set up by the ministries.[4] The reform was able successfully to give more power to the regional authorities and the Soviet Republics; this development was consolidated by a Central Committee decree in 1981.[5]

Implementation

The 1979 reform tried to the reform the existing economic system without any radical changes. Therefore, the economic system was centralised even more than what it had been before. The effectiveness of the planned economy was improved in some sectors, but not enough to save the stagnation economy of the USSR. One of the major goals of the reform was to improve the distribution of resources and investment which had been for a long-period been neglected because of "sectorialism" and "regionalism". Another priority was that the reform tried to eliminate the influence "regionalism" had on the five-year plan.[6]

The 1965 reform tried, with no success, on improving the quality of goods produced. In this the Soviet government did not succeed. In the 1979 reform Kosygin tried to displace gross output from "its commanding place" in the planned economy, and new regulations for rare and high quality goods were created.[7] Capital investment was seen as a very serious problem by the Soviet authorities by 1979, with General Secretary Leonid Brezhnev and Premier Kosygin claiming that only the increase in labor productivity could help develop the economy of the more technological advanced Soviet Republics, such as the Estonian Soviet Socialist Republic (ESSR) for instance.[8] When Kosygin died in 1980, the reform was practically abandoned by his successor, Nikolai Tikhonov.[9] Brezhnev told the 26th Congress that the implementation of the reform had been very slow.[10] Tikhonov, during his speech to the 26th Congress, told the delegates that the reform would be, or at least parts of it, would be implemented during the Eleventh Five-Year Plan (1981–1985).[11]

See also

References

  1. ^ ютуба, любитель (17 December 2010). "30 лет назад умер Алексей Косыгин". Newsland (in Russian). Retrieved 29 December 2010. {{cite web}}: Unknown parameter |trans_title= ignored (|trans-title= suggested) (help)
  2. ^ Whitefield, Stephen (1979). Industrial power and the Soviet state. Pennsylvania State University: Oxford University Press. p. 50. ISBN 0198278810.
  3. ^ Rutland, Peter (1993). The politics of economic stagnation in the Soviet Union: the role of local party organs in economic management. M.E. Sharpe. p. 97. ISBN 0521392411.
  4. ^ Dellenbrant, Jan Åke (1986). The Soviet regional dilemma: planning, people, and natural resources. M.E. Sharpe. p. 116. ISBN 087332384X.
  5. ^ Dellenbrant, Jan Åke (1986). The Soviet regional dilemma: planning, people, and natural resources. M.E. Sharpe. p. 98. ISBN 087332384X.
  6. ^ Dellenbrant, Jan Åke (1986). The Soviet regional dilemma: planning, people, and natural resources. M.E. Sharpe. p. 99. ISBN 087332384X.
  7. ^ Ellman, Michael; Kontorovich, Vladimir (1998). The Destruction of the Soviet Economic System: an Insiders' History. Oxford University Press. p. 81. ISBN 0765602644.{{cite book}}: CS1 maint: multiple names: authors list (link)
  8. ^ Dellenbrant, Jan Åke (1986). The Soviet regional dilemma: planning, people, and natural resources. M.E. Sharpe. p. 81. ISBN 087332384X.
  9. ^ Ellman, Michael; Kontorovich, Vladimir (1998). The Destruction of the Soviet Economic System: an Insiders' History. M.E. Sharpe: Oxford University Press. p. 97. ISBN 0765602644.{{cite book}}: CS1 maint: multiple names: authors list (link)
  10. ^ Dellenbrant, Jan Åke (1986). The Soviet regional dilemma: planning, people, and natural resources. M.E. Sharpe. p. 110. ISBN 087332384X.
  11. ^ Dellenbrant, Jan Åke (1986). The Soviet regional dilemma: planning, people, and natural resources. M.E. Sharpe. p. 112. ISBN 087332384X.
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