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Yeltsin and “Shock Therapy”

Yeltsin and “Shock Therapy”. Yeltsin: President from 1991-1999. Rapid shift from a command economy to a market economy. Government privatizes “commanding heights” Yeltsin and capitalist “oligarchs” vs. red directors Power in hands of an elite few Corruption. Impact of Shock Therapy.

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Yeltsin and “Shock Therapy”

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  1. Yeltsin and “Shock Therapy” • Yeltsin: President from 1991-1999. • Rapid shift from a command economy to a market economy. • Government privatizes “commanding heights” Yeltsin and capitalist “oligarchs” vs. red directors • Power in hands of an elite few • Corruption

  2. Impact of Shock Therapy • Massive Inflation • 1986: 20 rubles=$1 • 1997: 5,500 rubles=$1 2012: 32 rubles=$1 • GDP: 1989=500 billion 1999=195 billion • Unemployment: no govt. secured jobs. • 1998: 12% • 16% of population lived on $1-$2 a day. • Huge gap between rich and poor • Public faith in a market economy dwindled. • 1997: Government defaulted on debt.

  3. Vladimir Putin • Former KGB spy • Prime Minister under Yeltsin (1999) • Acting president after Yeltsin resigned • Won presidential election (2000 & 2004) • Won presidential election again, 2012.

  4. Putin & Economy • Stabilized economy after Yeltsin’s 1990s. GDP • 1999=195 billion • 2009= 1.2 trillion • Increase of foreign direct investment (FDI) in Russia • Major exporter of oil. • Modernization

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