Russia

Economic Reform in the 1990s

Two fundamental and interdependent goals--macroeconomic stabilization and economic restructuring--mark the transition from central planning to a market-based economy. The former entails implementing fiscal and monetary policies that promote economic growth in an environment of stable prices and exchange rates. The latter requires establishing the commercial, legal, and institutional entities--banks, private property, and commercial legal codes--that permit the economy to operate efficiently. Opening domestic markets to foreign trade and investment, thus linking the economy with the rest of the world, is an important aid in reaching these goals. Under Gorbachev, the regime failed to address these fundamental goals. At the time of the Soviet Union's demise, the Yeltsin government of the Russian Republic had begun to attack the problems of macroeconomic stabilization and economic restructuring. As of mid-1996, the results were mixed.