Why didn't he copy Deng Xiaoping and open SEZs all over the Soviet Union to bring in foreign investment.
Can Gorbachev enact China styles reforms?
- Thread starter idontlikesand
- Start date
There was a very important difference between the biographies of Den Xiaoping and Gorbachev:
Deng (1904 – 1997) knew market economics from his own experience as an adult, and must have known many Chinese who still knew how to conduct "capitalist" business.
Gorbachev was born into a socialist society and knew no other system from first hand experience. Perhaps Gorbachev really believed that a reformed socialism would be better than "capitalism", or he simply did not know how to implement a market based economic system, and did not know other Soviet citizens who had the knowledge to do this.
Deng (1904 – 1997) knew market economics from his own experience as an adult, and must have known many Chinese who still knew how to conduct "capitalist" business.
Gorbachev was born into a socialist society and knew no other system from first hand experience. Perhaps Gorbachev really believed that a reformed socialism would be better than "capitalism", or he simply did not know how to implement a market based economic system, and did not know other Soviet citizens who had the knowledge to do this.
The Cosmonaut Cat
Banned
Because by his own admission Gorbachov wanted to reform USSR to have a system resembling that of the Scandinavian nations rather than what China has.
One other factor people always fail to account for is that it's a lot harder for the USSR to pull a China because living standards in the Soviet Union were substantially higher than living standards in China. Even today, Russian GDP per capita is higher than China's. Because living standards in China were very low in the early 1980s, China could compete for cheap manufacturing jobs, and its ports offered easy access to the American market.
The Soviets can't offer labor that cheap, and oil and commodities prices can bring about a case of "Dutch Disease."
The Soviets can't offer labor that cheap, and oil and commodities prices can bring about a case of "Dutch Disease."
The Soviet economy was horribly inefficient, if they can make things run a bit more smoothly then that in itself would be a major boost even without exports. Being advanced also means that they have a potential middle class if and when the new economy starts to pick up. I'm struggling to think of any natural resources they were short of or didn't have, improving just their agricultural sector so they didn't have to buy in foreign grain whilst still exporting oil and gas would be a major advance and tip their balance of trade in the right direction.
Deng's reforms only worked in the first place because the Soviet Union was the bête noir of international politics. China was able to integrate into the world market because they were an ally against the Soviets, and economic cooperation served that end.
The Soviet Union does not have that luxury, and they lost it the moment they took on the role of a superpower. They are not just another nation, they are the head of an alternate, rival world order to the world capitalist system championed by the United States. Backing down is a crushing, demoralizing defeat, and the Soviet system needed to be an alternative to global capitalism or else there was no point to the experiment.
Backing down and trying to open to the world market, and accept the US as the global hegemon means there's no point in the Soviet system as an alternative. And unlike China, they didn't have enough true believers left to sustain it as a rival world system.
That's why the East Bloc collapsed: the end of superpower status quickly ensured that the opportunists who held power had no reason to maintain the charade. It was in their self-interest to become good capitalists.
The Soviet Union does not have that luxury, and they lost it the moment they took on the role of a superpower. They are not just another nation, they are the head of an alternate, rival world order to the world capitalist system championed by the United States. Backing down is a crushing, demoralizing defeat, and the Soviet system needed to be an alternative to global capitalism or else there was no point to the experiment.
Backing down and trying to open to the world market, and accept the US as the global hegemon means there's no point in the Soviet system as an alternative. And unlike China, they didn't have enough true believers left to sustain it as a rival world system.
That's why the East Bloc collapsed: the end of superpower status quickly ensured that the opportunists who held power had no reason to maintain the charade. It was in their self-interest to become good capitalists.
Perhaps, the most plausible (or alternatively the least implausible) way to get the USSR to 'do a China', is precisely NOT to have China do those reforms and instead become even more ideologically driven and militarily assertive in Asia (particularly SE Asia) in the 1970's and post-Mao.
Of course in this scenario, the Soviet Union wouldn't have China as an example to follow, but given that by the 70s/80s the geopolitical and economic centre of the world quickly starts to move towards Asia, it is a way to get the US to see a more economically vibrant, but militarily 'static' Soviet Union as less of a threat than a highly assertive China.
In OTL, wasn't one of the 'quid-pro-quo' aspects of the US supporting China's integration into the world economy, that they stop supporting Communist movements in Asia? Perhaps in this ATL, the equivalent, would be US acceptance of Soviet hegemony Eastern Europe and Central Asia provided they stop supporting Communist movements elsewhere (particularly the Western Hemisphere, that would non-negotiable from the American perspective).
But China was incredibly poor and had no industry to compete as a super power before the Deng reforms. It also doesn't help that their particular brand of communism never took off in any other country even with all the Maoist insurgencies. I simply don't see how China could compete in the same way the Soviet Union if it shuts itself away instead of using capitalism to blossom like a hundred flowers.
However if it could work, you might have just found a plausible way to create the Fallout timeline.
That's exactly what China did with the Special Economic Zones.
Neirdak
Banned
I think he could, but for that you need to focus on two things, diminishing the power of bureaucracy and priority of economic reforms on political ones.
Soviet and Chinese Economic Reform, By Marshall L. Goldman and Merle Goldman FROM OUR AMERICA AND THE WORLD 1987 ISSUE, Foreign Affairs
- http://www.foreignaffairs.com/articles/42801/marshall-l-goldman-and-merle-goldman/soviet-and-chinese-economic-reform
The main risk for Soviet Union, in the discourse of the 27th Congress of the Communist Party, was the idea that economic, social and political reforms had to be linked in order to be successful. The concepts of Uskoreniye (acceleration of the reforms), Demokratizatsiya, Perestroika, Glasnost, Human factor (accountability of the appartchiniks) were all linked to political and social reforms.
The only concept which wasn't political was khozraschyot (commercialization), a old concept from the 60's, which introduced the ideas of workers self-management, self-financing, self-reevaluation, self-management and cost-accounting. But this khozraschyot policy was followed by Perestroika/Glasnost and quickly put aside by Gorbachev as it didn't contain any political or social reforms.
Gorbachev chose to abandon the emphasis on economic actions and to work on political and social ones, increasing the perception of corruption, nepotism and economic criminality among the common citizens. The citizens in return asked to even more political freedom and liberties, thinking they would lead to an economic improvement, which turned the policies into a vicious circle of socio-political demands, instead of solving the economic inefficiency.
As stated in the article linked above, Gorbachev's socio-political reforms were meant to break the power of bureaucracy and appartchiniks, while Chinese bureaucracy wasn't as big and autonomous (from the central authority) as the Soviet one.
I think it would have been possible to focus on economic reforms instead of political and social ones. Light industry wasn't the strength of Soviet Union, but SEZ based on technology (Soviet Silicon valleys) or aerospace products and defense armaments were possible. For example, Zelenograd was one of the most powerful centers of electronics, microelectronics and computer industry in the Soviet Union, and it still plays a similar role in modern Russia. It was developed as a reflection of the California Silicon Valley and known also as Soviet/Russian Silicon Valley.
Look at the Russian Federal Law #116 FZ, issued on July 22, 2005, which created Technical/Innovational Zones, Industrial/developmental Zones, Tourist Zones (for foreign currencies) and imagine such a law being published in Soviet Union, instead of the Glasnost and Perestroika reforms.
Soviet cowardice in face of corruption ended up dooming nation in end http://www.globaltimes.cn/content/860077.shtml
You add to those economic reforms, the creation of a REAL central audit and anti-corruption administration centralized under the direct control of the General Secretary of the Communist Party and you can probably get a slightly more stable Soviet Union during the 80's, with exception of separatism.
Soviet and Chinese Economic Reform, By Marshall L. Goldman and Merle Goldman FROM OUR AMERICA AND THE WORLD 1987 ISSUE, Foreign Affairs
- http://www.foreignaffairs.com/articles/42801/marshall-l-goldman-and-merle-goldman/soviet-and-chinese-economic-reform
The main risk for Soviet Union, in the discourse of the 27th Congress of the Communist Party, was the idea that economic, social and political reforms had to be linked in order to be successful. The concepts of Uskoreniye (acceleration of the reforms), Demokratizatsiya, Perestroika, Glasnost, Human factor (accountability of the appartchiniks) were all linked to political and social reforms.
The only concept which wasn't political was khozraschyot (commercialization), a old concept from the 60's, which introduced the ideas of workers self-management, self-financing, self-reevaluation, self-management and cost-accounting. But this khozraschyot policy was followed by Perestroika/Glasnost and quickly put aside by Gorbachev as it didn't contain any political or social reforms.
Gorbachev chose to abandon the emphasis on economic actions and to work on political and social ones, increasing the perception of corruption, nepotism and economic criminality among the common citizens. The citizens in return asked to even more political freedom and liberties, thinking they would lead to an economic improvement, which turned the policies into a vicious circle of socio-political demands, instead of solving the economic inefficiency.
As stated in the article linked above, Gorbachev's socio-political reforms were meant to break the power of bureaucracy and appartchiniks, while Chinese bureaucracy wasn't as big and autonomous (from the central authority) as the Soviet one.
I think it would have been possible to focus on economic reforms instead of political and social ones. Light industry wasn't the strength of Soviet Union, but SEZ based on technology (Soviet Silicon valleys) or aerospace products and defense armaments were possible. For example, Zelenograd was one of the most powerful centers of electronics, microelectronics and computer industry in the Soviet Union, and it still plays a similar role in modern Russia. It was developed as a reflection of the California Silicon Valley and known also as Soviet/Russian Silicon Valley.
Look at the Russian Federal Law #116 FZ, issued on July 22, 2005, which created Technical/Innovational Zones, Industrial/developmental Zones, Tourist Zones (for foreign currencies) and imagine such a law being published in Soviet Union, instead of the Glasnost and Perestroika reforms.
Soviet cowardice in face of corruption ended up dooming nation in end http://www.globaltimes.cn/content/860077.shtml
You add to those economic reforms, the creation of a REAL central audit and anti-corruption administration centralized under the direct control of the General Secretary of the Communist Party and you can probably get a slightly more stable Soviet Union during the 80's, with exception of separatism.
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Since I have had the idea of a “Soviet Deng reform” floating in my head for a while, I would like to go straight to the stuff I deem crucial. (some of them has been addressed above)
In short, China’s reform was a bottom-up one, rooted in its less collectivized agriculture and less centralized economy. You need a PoD much earlier than Gorbachev to do that in the Soviet Union.
Deng was not a genius who somehow came out with a master plan for reform. Circumstances conspired to make China’s reforms possible, and it was circumstances, not plans, that made China’s reforms happen the way it did. There were “push” factors, which forced the leadership to make unorthodox decisions, and the “pull” factors, which helped the market reforms to succeed. As you will see below, these push and pull factors were often two sides of the same coins.
The primary push factor: China’s communism was way less “successful” than the Soviet one. Chinese leaders were forced to be pragmatic when they run out of every other options.
First of all, China’s economic decision making lay in the provinces and counties, not the central government. The Chinese Central Planning Committee could not do anything without the provinces cooperating with them, unlike the all-powerful Gosplan. This was apparently due to China’s lack of means to create a centralized bureaucracy, but also because an impending Soviet invasion in the 70s which forced the provinces to be economically self-sustainable. At that time, the Chinese thought this more decentralized system as being primitive and less sophisticated as compared to USSR and East Europe, but it proved far more flexible. Both reforms and resistance to reforms were localized, making experimentation possible, and defusing potential conflicts.
Agricultural Collectivization was not as successful in China as in the more Stalinist countries as well, despite one of the most (if not the most) severe famine in history, most of the people’s communes ended up being organized at the village level, lacking complex structures. In practice, communes often secretly gave lands back to private hands as “contractors”; villages which kept the collective system often gave up agriculture for village industry. These bottom-up reforms has been going on for more than a decade before the Center, under Deng, caught up with the realities on the grassroot level. The Soviets could never do that because Stalin’s collectivization was more successful as far as the state was concerned, and frankly, they had been much better fed since the Khrushchev era.
Soviet Communism could pretend to have gotten rid of unemployment; Chinese Communism had no such luxury despite their best effort. When hordes of Mao’s banished urbanite youth returned to the cities, it added to the already long queue for jobs. The CCP was yet again forced to give ground to private economy, just to get these troublesome kids employed. Some of these kids went on from there and became today’s multi-millionaires.
Economic success story of the Asian Tigers, ASEAN countries, and Japan served as an inspiration and motivation for China’s market reforms, and also a source of investment. But even that came as a sort of pressure first. The sheer difference in standard of living between Mainland China and the Newly Industrialized Economies created a shock in Chinese mentality, and huge refugee waves to Hong Kong was only one of the examples. It has been argued that the SEZ in Shenzhen was an attempt to create an alternative to potential defectors.
In fact, when China emerged from the ruins of Cultural Revolution, it looked UP to the Eastern European states like Poland, Czechoslovakia, Hungary and especially Yugoslavia as an example of communism with higher standard of living (and these reforms DID pave the way for a smoother transition period in some Comecon countries) . Deng justified his own reforms by citing these countries as examples of market “supplement” to the Socialism. To the communist old guards, these were easier compromises to swallow. On the contrary, when reading memoirs of Russians leaders, it’s impressive that how they tried to become the west “within 500 days” or a few years, without making reference to their economically more successful Warsaw Pact allies as an intermediate step.
When it comes to economic corporation with the west, it was far more profit-driven than politically motivated on both sides. If the Radical Maoist China viewed both Yankee Imperialism and Soviet Revisionism with equal hatred, Deng Era China tried to deal with the Western Developed Countries and the Northern Superpower with equal pragmatism. Such corporations continued even after the fall of the Soviet Union, when there was no more need to trump up China as a counterbalance to the Bear. I do not think Soviet Union had a disadvantage attracting western loans and investments: western bankers willingly offered the Soviet Union large loans, unlike Yeltsin who had to beg for it, since the Soviet Union was fiscally far better placed than the Russian Federation. In other words, if the Soviet Union was serious about attracting foreign investment and loans, the investors would trust her more than they trusted China, for the Soviet Union was not only a much larger economy, but also more advanced.
And finally, let’s be clear, despite Deng and Jiang’s skills in dodging potential risks, their reforms were neither universally successful, nor was it without major upheavals. In 1989, a large portion of the urban population was on the streets (and the bloody ending); and in 1997, millions of State-Owned Enterprise workers lost their jobs; in the entire 1990s, the countryside/agriculture sector was in stagnation; to this day, the Northeast (with an economic structure very similar to USSR) is in somewhat of a depression; and the inland provincial economies like that of Shaanxi and Gansu are still mainly state-owned. Beijing could only put things together by channeling money from the more developed Coast to the less developed inland. The multi-ethnic Soviet Union was far less well-placed to survive all these.
In short, China’s reform was a bottom-up one, rooted in its less collectivized agriculture and less centralized economy. You need a PoD much earlier than Gorbachev to do that in the Soviet Union.
Deng was not a genius who somehow came out with a master plan for reform. Circumstances conspired to make China’s reforms possible, and it was circumstances, not plans, that made China’s reforms happen the way it did. There were “push” factors, which forced the leadership to make unorthodox decisions, and the “pull” factors, which helped the market reforms to succeed. As you will see below, these push and pull factors were often two sides of the same coins.
The primary push factor: China’s communism was way less “successful” than the Soviet one. Chinese leaders were forced to be pragmatic when they run out of every other options.
First of all, China’s economic decision making lay in the provinces and counties, not the central government. The Chinese Central Planning Committee could not do anything without the provinces cooperating with them, unlike the all-powerful Gosplan. This was apparently due to China’s lack of means to create a centralized bureaucracy, but also because an impending Soviet invasion in the 70s which forced the provinces to be economically self-sustainable. At that time, the Chinese thought this more decentralized system as being primitive and less sophisticated as compared to USSR and East Europe, but it proved far more flexible. Both reforms and resistance to reforms were localized, making experimentation possible, and defusing potential conflicts.
Agricultural Collectivization was not as successful in China as in the more Stalinist countries as well, despite one of the most (if not the most) severe famine in history, most of the people’s communes ended up being organized at the village level, lacking complex structures. In practice, communes often secretly gave lands back to private hands as “contractors”; villages which kept the collective system often gave up agriculture for village industry. These bottom-up reforms has been going on for more than a decade before the Center, under Deng, caught up with the realities on the grassroot level. The Soviets could never do that because Stalin’s collectivization was more successful as far as the state was concerned, and frankly, they had been much better fed since the Khrushchev era.
Soviet Communism could pretend to have gotten rid of unemployment; Chinese Communism had no such luxury despite their best effort. When hordes of Mao’s banished urbanite youth returned to the cities, it added to the already long queue for jobs. The CCP was yet again forced to give ground to private economy, just to get these troublesome kids employed. Some of these kids went on from there and became today’s multi-millionaires.
Economic success story of the Asian Tigers, ASEAN countries, and Japan served as an inspiration and motivation for China’s market reforms, and also a source of investment. But even that came as a sort of pressure first. The sheer difference in standard of living between Mainland China and the Newly Industrialized Economies created a shock in Chinese mentality, and huge refugee waves to Hong Kong was only one of the examples. It has been argued that the SEZ in Shenzhen was an attempt to create an alternative to potential defectors.
In fact, when China emerged from the ruins of Cultural Revolution, it looked UP to the Eastern European states like Poland, Czechoslovakia, Hungary and especially Yugoslavia as an example of communism with higher standard of living (and these reforms DID pave the way for a smoother transition period in some Comecon countries) . Deng justified his own reforms by citing these countries as examples of market “supplement” to the Socialism. To the communist old guards, these were easier compromises to swallow. On the contrary, when reading memoirs of Russians leaders, it’s impressive that how they tried to become the west “within 500 days” or a few years, without making reference to their economically more successful Warsaw Pact allies as an intermediate step.
When it comes to economic corporation with the west, it was far more profit-driven than politically motivated on both sides. If the Radical Maoist China viewed both Yankee Imperialism and Soviet Revisionism with equal hatred, Deng Era China tried to deal with the Western Developed Countries and the Northern Superpower with equal pragmatism. Such corporations continued even after the fall of the Soviet Union, when there was no more need to trump up China as a counterbalance to the Bear. I do not think Soviet Union had a disadvantage attracting western loans and investments: western bankers willingly offered the Soviet Union large loans, unlike Yeltsin who had to beg for it, since the Soviet Union was fiscally far better placed than the Russian Federation. In other words, if the Soviet Union was serious about attracting foreign investment and loans, the investors would trust her more than they trusted China, for the Soviet Union was not only a much larger economy, but also more advanced.
And finally, let’s be clear, despite Deng and Jiang’s skills in dodging potential risks, their reforms were neither universally successful, nor was it without major upheavals. In 1989, a large portion of the urban population was on the streets (and the bloody ending); and in 1997, millions of State-Owned Enterprise workers lost their jobs; in the entire 1990s, the countryside/agriculture sector was in stagnation; to this day, the Northeast (with an economic structure very similar to USSR) is in somewhat of a depression; and the inland provincial economies like that of Shaanxi and Gansu are still mainly state-owned. Beijing could only put things together by channeling money from the more developed Coast to the less developed inland. The multi-ethnic Soviet Union was far less well-placed to survive all these.
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gorbachev, had he survived in power for longer, would have aimed for social democracy in the long run, no massive privatisation programmes.
Above all Gorbachev actually believed in democracy, the Chinese communists never have.
Above all Gorbachev actually believed in democracy, the Chinese communists never have.
I think by Gorbachev's time the rot was too extensive for any reform programme to have worked unless it was backed up by a continuing hardline stance against dissent. Unlike China, which is largely ethnically homogenous, the SU was the old Russian Empire under a different name and contained dozens of ethnic groups. Once Gorbachev began allowing people to speak their minds it unleashed forces that had been suppressed for decades and the whole situation began to spiral out of control. Given a leader with Deng's ruthlessness then perestroika could have worked but there wouldn't have been any glasnost.
Neirdak
Banned
SEZ based on heavy industries and science, instead of agriculture and light industry, are easier to control from the center and were actually planned in the GOSPLAN. UNCTAD saw huge opportunities for Soviet Union and created two very good reports about them (the first two links below aren't complete, but read both and carefully !!!!).
The main purpose of the established Soviet SEZ's was to link the Soviet scientific and technical potential with foreign capital and thus launch manufacturing of high-technology production. It was also planned to increase the production of high quality consumer goods for Soviet citizens. It was also an easy way to get access to foreign currencies and to diversify the economy.
Sadly, they just began to be thought of in late seventies and Gorbachev focused on political reforms and quick economic privatization, which highlighted and increased the economic/corruption problems, instead of putting the project in motion. Gorbachev finally signed the Decree of the President of USSR on foreign investment on 26 october 1990. You can find the decree in the second link below on page 4.
Gorbachev's pursued his perestroika dream and used (minor) adjustements when problems arised. He didn't think about the issues of Nationalities/Federalization, Economy or about Foreign Relations before the grievances of the citizens became salient. The reforms while on the right track were not comprehensive and hard enough to overcome the sluggishness in the Soviet economy. When more radical changes were made they were mostly too late to prevent the slide in the economy and often had adverse effects. His economic and political reforms were made of trials and errors and not planned at all. Gorbachev never planned to remake the Soviet economic or political system he merely wanted to modernise it.
He wasn't a planner, not strong enough and simply not the right man to follow Andropov's reforms ...
The utter failure of perestroika was exacerbated by Gorbachev's continual boasting about the results that the reforms would have. By publicly predicting an increase in peoples living conditions that never happened Gorbachev was unmasked as an inept planner and of being incapable of making much needed decisions. In the last years of perestroika erratic policy shifts were common with wide ranging reforms soon clamped down on. Gorbachev's failure to approve Grigory Yavlinsky's 500 day economic plan in September 1990 after much earlier enthusiasm lost him any remaining support he still had from the Soviet people. Failing to bring any significant change to the Soviet economy, Gorbachev lost the support of the people. By steering a course between the conservatives and the reformers Gorbachev alienated almost everybody leaving himself with few allies.
Normally, if the initial plan (Andropov's plan
) was to be followed, such SEZ's were to be opened in mid-eighties (around 1985) !!!
Sources that can help :
- The Role of Free Economic Zones in the USSR and Eastern Europe (March 1990) http://unctc.unctad.org/data/e90iia5a.pdf ---> page 6 to the end: Opportunities for Soviet Union
- The Challenge of Free Economic Zones in Central and Eastern Europe (1991)http://unctc.unctad.org/data/e90iia27a.pdf
- The Creation of Chinese-Style Special Economic Zones during Perestroika is an amazing article by a student or professor named Chris Miller. I don't know if you can find it on Internet.
- The book The Impact of Perestroika on Soviet Law, Issue 41 has a nice part (page 500) about the new Customs law and the legal settings of SEZ in Soviet Union.
- If you can get your hand on Vneshnia torgovlia of March 1987, you will find a positive article on the Chinese customs system and about SEZ, article which pleaded for slower privatization and political reforms, while begging to focus on the chinese way.
- Current state and development potential of Russian Special Economic Zones - Saint Petersburg SEZ 2008 http://www.utu.fi/fi/yksikot/tse/yksikot/PEI/raportit-ja-tietopaketit/Documents/Zashev%200808.pdf
- This link is very very important to understand why Gorbachev reforms failed and the Chinese ones succeeded : http://www.foreignaffairs.com/artic...le-goldman/soviet-and-chinese-economic-reform
The main purpose of the established Soviet SEZ's was to link the Soviet scientific and technical potential with foreign capital and thus launch manufacturing of high-technology production. It was also planned to increase the production of high quality consumer goods for Soviet citizens. It was also an easy way to get access to foreign currencies and to diversify the economy.
Sadly, they just began to be thought of in late seventies and Gorbachev focused on political reforms and quick economic privatization, which highlighted and increased the economic/corruption problems, instead of putting the project in motion. Gorbachev finally signed the Decree of the President of USSR on foreign investment on 26 october 1990. You can find the decree in the second link below on page 4.
Gorbachev's pursued his perestroika dream and used (minor) adjustements when problems arised. He didn't think about the issues of Nationalities/Federalization, Economy or about Foreign Relations before the grievances of the citizens became salient. The reforms while on the right track were not comprehensive and hard enough to overcome the sluggishness in the Soviet economy. When more radical changes were made they were mostly too late to prevent the slide in the economy and often had adverse effects. His economic and political reforms were made of trials and errors and not planned at all. Gorbachev never planned to remake the Soviet economic or political system he merely wanted to modernise it.
He wasn't a planner, not strong enough and simply not the right man to follow Andropov's reforms ...
The utter failure of perestroika was exacerbated by Gorbachev's continual boasting about the results that the reforms would have. By publicly predicting an increase in peoples living conditions that never happened Gorbachev was unmasked as an inept planner and of being incapable of making much needed decisions. In the last years of perestroika erratic policy shifts were common with wide ranging reforms soon clamped down on. Gorbachev's failure to approve Grigory Yavlinsky's 500 day economic plan in September 1990 after much earlier enthusiasm lost him any remaining support he still had from the Soviet people. Failing to bring any significant change to the Soviet economy, Gorbachev lost the support of the people. By steering a course between the conservatives and the reformers Gorbachev alienated almost everybody leaving himself with few allies.
Normally, if the initial plan (Andropov's plan
) was to be followed, such SEZ's were to be opened in mid-eighties (around 1985) !!!Sources that can help :
- The Role of Free Economic Zones in the USSR and Eastern Europe (March 1990) http://unctc.unctad.org/data/e90iia5a.pdf ---> page 6 to the end: Opportunities for Soviet Union
- The Challenge of Free Economic Zones in Central and Eastern Europe (1991)http://unctc.unctad.org/data/e90iia27a.pdf
- The Creation of Chinese-Style Special Economic Zones during Perestroika is an amazing article by a student or professor named Chris Miller. I don't know if you can find it on Internet.
- The book The Impact of Perestroika on Soviet Law, Issue 41 has a nice part (page 500) about the new Customs law and the legal settings of SEZ in Soviet Union.
- If you can get your hand on Vneshnia torgovlia of March 1987, you will find a positive article on the Chinese customs system and about SEZ, article which pleaded for slower privatization and political reforms, while begging to focus on the chinese way.
- Current state and development potential of Russian Special Economic Zones - Saint Petersburg SEZ 2008 http://www.utu.fi/fi/yksikot/tse/yksikot/PEI/raportit-ja-tietopaketit/Documents/Zashev%200808.pdf
- This link is very very important to understand why Gorbachev reforms failed and the Chinese ones succeeded : http://www.foreignaffairs.com/artic...le-goldman/soviet-and-chinese-economic-reform
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SEZ based on heavy industries and science, instead of agriculture and light industry, are easier to control from the center and were actually planned in the GOSPLAN. UNCTAD saw huge opportunities for Soviet Union and created two very good reports about them (the first two links below aren't complete, but read both and carefully !!!!).
The main purpose of the established Soviet SEZ's was to link the Soviet scientific and technical potential with foreign capital and thus launch manufacturing of high-technology production. It was also planned to increase the production of high quality consumer goods for Soviet citizens. It was also an easy way to get access to foreign currencies and to diversify the economy.
Sadly, they just began to be thought of in late seventies and Gorbachev focused on political reforms and quick economic privatization, which highlighted and increased the economic/corruption problems, instead of putting the project in motion. Gorbachev finally signed the Decree of the President of USSR on foreign investment on 26 october 1990. You can find the decree in the second link below on page 4.
Gorbachev's pursued his perestroika dream and used (minor) adjustements when problems arised. He didn't think about the issues of Nationalities/Federalization, Economy or about Foreign Relations before the grievances of the citizens became salient. The reforms while on the right track were not comprehensive and hard enough to overcome the sluggishness in the Soviet economy. When more radical changes were made they were mostly too late to prevent the slide in the economy and often had adverse effects. His economic and political reforms were made of trials and errors and not planned at all. Gorbachev never planned to remake the Soviet economic or political system he merely wanted to modernise it.
He wasn't a planner, not strong enough and simply not the right man to follow Andropov's reforms ...
The utter failure of perestroika was exacerbated by Gorbachev's continual boasting about the results that the reforms would have. By publicly predicting an increase in peoples living conditions that never happened Gorbachev was unmasked as an inept planner and of being incapable of making much needed decisions. In the last years of perestroika erratic policy shifts were common with wide ranging reforms soon clamped down on. Gorbachev's failure to approve Grigory Yavlinsky's 500 day economic plan in September 1990 after much earlier enthusiasm lost him any remaining support he still had from the Soviet people. Failing to bring any significant change to the Soviet economy, Gorbachev lost the support of the people. By steering a course between the conservatives and the reformers Gorbachev alienated almost everybody leaving himself with few allies.
Normally, if the initial plan (Andropov's plan
Sources that can help :
- The Role of Free Economic Zones in the USSR and Eastern Europe (March 1990) http://unctc.unctad.org/data/e90iia5a.pdf ---> page 6 to the end: Opportunities for Soviet Union
- The Challenge of Free Economic Zones in Central and Eastern Europe (1991)http://unctc.unctad.org/data/e90iia27a.pdf
- The Creation of Chinese-Style Special Economic Zones during Perestroika is an amazing article by a student or professor named Chris Miller. I don't know if you can find it on Internet.
- The book The Impact of Perestroika on Soviet Law, Issue 41 has a nice part (page 500) about the new Customs law and the legal settings of SEZ in Soviet Union.
- If you can get your hand on Vneshnia torgovlia of March 1987, you will find a positive article on the Chinese customs system and about SEZ, article which pleaded for slower privatization and political reforms, while begging to focus on the chinese way.
- Current state and development potential of Russian Special Economic Zones - Saint Petersburg SEZ 2008 http://www.utu.fi/fi/yksikot/tse/yksikot/PEI/raportit-ja-tietopaketit/Documents/Zashev%200808.pdf
- This link is very very important to understand why Gorbachev reforms failed and the Chinese ones succeeded : http://www.foreignaffairs.com/artic...le-goldman/soviet-and-chinese-economic-reform
Thanks for this. I found the paper by Chris Miller on his academia page but its not accessbile. He's a PhD candidate at yale btw.
RousseauX
Donor
SEZs based on heavy industry and controlled from the center are bound to fail, the precise point of SEZs is to disconnect industries from the center because central planning is responsible for the moribound economy in the first place.
Heavy industries are also a bad idea and are significantly more difficult to make competitive, you are better off starting with consumer based light industries where you can take advantage lower labor costs.
Where are they going to get foreign capital from, granted I haven't read the papers you cited so maybe it's explained in there.
In China the first generation of FDI came from overseas Chinese, Taiwan and Hong Kong and Singapore. I don't think any equivalent overseas community exist for Russia.
Also how is this suppose to work politically?
The USSR had full employment, which means pretty much everybody is employed by some state bureau or enterprise.
Let's say you open new foreign funded plant or w/e in SEZ Sevastopol, where does the labor come from?
China doesn't have this issue because it can simply pay peasants to work in new factories, but the USSR doesn't have this option because it had less peasants and you are talking about higher end technology which needs you to have an actual education. Which means the labor you need are locked into state industries.
So do you just close down a bunch of state owned industries and/or fire workers? That won't fly politically in the bureaucracy. Do you liberalize labor laws and allow workers to move to those new industries? That won't appeal to most workers who has cushy state jobs and the nomenclature will block it anyway because it poaches their best workers.
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RousseauX
Donor
Foreign investment actually consisted of a very small proportion of the Chinese economy during the reform period.