Market-Based Perestroika Has Not Failed: It Hasn't Been Launched
Abstract
A year ago the world was in a state of euphoria over Gorbachev as a result of his startling foreign policy decisions to pull the Soviet military out of Afghanistan, allow the demise of Communism in Eastern Europe, and give the green light to the reunification of Germany. Chancellor Kohl and others in the West proposed that the West extend a new Marshall Plan to the Soviet Union to ensure the success of Gorbachev's economic reform process "perestroika." Twelve months later, in the wake of Gorbachev's bloody crackdown in the Baltic and increasing reliance on conservative, anti-reform forces, some in the West have reversed course and called for taking away Gorbachev's Nobel prize and for a cutoff in all economic aid to the USSR. Gorbachev launched "perestroika" to revitalize the USSR's stagnating and technologically backward economy. Six years of "perestroika," however, have only made the bad economic situation Gorbachev inherited in 1985 even worse. Gorbachev has steadfastly resisted market reforms culminating in his rejection last October of the bold "500-day" Shatalin plan for a rapid transition to a market economy. The failure to implement market reforms in the Soviet Union stems mainly from Gorbachev's firm conviction in Communism, the tremendous resistance from the nomenklatura, and from the dismay of the Soviet populace. In the short term, the West appears to have very little direct leverage to encourage market reforms in the USSR. However, an indirect approach involving additional Western economic assistance to Eastern Europe, channeling aid to the reform-minded republics, and letting the International Monetary Fund take the lead in insisting on conditionality for further Western financial assistance could promote the Soviet reform process.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 25, 1991
- Accession Number
- ADA437650
Entities
People
- Prescott Wurlitzer
Organizations
- National War College