What difficulties does the new economy in Russia experience? The difficulties of transition from a planned economy to a market economy

To understand what difficulties the new economy in Russia is experiencing, it is worth looking at statistics on industrial production in the nineties. The transition period from a planned economy to an open market was painful for both the economy and the population. At the very beginning of the reforms it was assumed that their successful implementation would allow building an effective economy in the state using the most modern standards and technologies.

A Brief Overview: What Challenges the New Economy in Russia

The period of the 1990s among economists is considered to be the time of the so-called transformational recession. As a result of the change in the economic structure, a huge number of people turned out to be without a permanent job, and the resources necessary for engaging in entrepreneurial activity fell into the hands of yesterday's party nomenclature, which used to use them for enrichment.

However, not only the decline in production measures the difficulties experienced by the new economy in Russia during that period. The change of the state structure was combined with the change in the moral orientations of the citizens of the former USSR.

Unexpectedly, the rule of law was replaced by a cult of force, because of which the construction of business was seriously complicated. Pressure from corrupt officials, criminal communities and dishonest competitors made effective business management very difficult.

However, the devaluation of the ruble led to the fact that the demand for domestic goods began to exceed the demand for imported products. This allowed the companies to significantly replenish their working capital, which, along with a reduction in non-core expenditures, made it possible to significantly improve the country's economy and create a base for the construction of a new system.

Unfortunately, significant social infrastructure elements, such as sanatoriums, children's summer camps and polyclinics, were assigned to non-core assets. Not all enterprises managed to maintain at least part of the social benefits for their employees.

Transitional difficulties

While giving a brief answer on social studies, what difficulties does the new economy in Russia experience? - it is worth looking at neighboring countries that have less successfully overcome the dividing line between the socialist economy and the market.

All countries with economies in transition inevitably pass in their development approximately the same stages of liberalization, privatization, stabilization and structural adjustment, which is also impossible without the psychological adaptation of the population to the new conditions of life.

A particularly good illustration of the problems of transition to a new economy can be the state of enterprises of the military industry and related areas. All of them faced a severe crisis caused by the drop in the number of state orders. It took enormous efforts to re-equip military production and adapt it to civilian needs. However, the reduction of a large number of jobs was inevitable.

The collapse of the labor market was also due to the fact that in the planned economy there was a so-called hidden unemployment, which increased due to creating useless for the economy jobs.

Psychology of modern times

Building an effective market economy is impossible without the participation of a private owner who is interested in the result of his labor and responsible to the consumer.

All the difficulties experienced by the new economy in Russia in recent years are inseparably linked with the neglect of private property and the understatement of the role of the private owner. As a result of reforms in Russia, state capitalism was built with oligarchic features. Small and medium business developed extremely slowly, and in the middle of the two thousandths it practically ceased to develop.

All the difficulties that the new economy is experiencing in Russia now involve a huge number of frauds that took place during the privatization period. The enterprises purposefully went bankrupt, the workers were deprived of stable earnings and were dismissed without compensation. Thus, we can conclude that the main beneficiaries were the owners of large capital, while the workers were in a losing position.