Economy
See also: Economy of RussiaThe dissolution of the Soviet Union took place as a result and against the backdrop of general economic stagnation, even regression. As the Gosplan, which had set up production chains to cross SSR lines, broke down, the inter-republic economic connections were also disrupted, leading to even more serious breakdown of the post-Soviet economies.
Most of the formerly Soviet states began the transition to a market economy in 1990-1991 and made efforts to rebuild and restructure their economic systems, with varying results. The process triggered a severe transition decline, with Gross Domestic Product (GDP) dropping by more than 40% between 1990 and 1995. This decline in GDP was much more intense than the 27% decline that the United States suffered in the wake of the Great Depression between 1930 and 1934. The reconfiguration of public finance in compliance with the principles of market economy resulted in dramatically reduced spending on health, education and other social programs, leading to a sharp increase in poverty.
The initial transition decline was eventually arrested by the cumulative effect of market reforms, and after 1995 the economy in the post-Soviet states began to recover, with GDP switching from negative to positive growth rates. By 2007, 10 of the 15 post-Soviet states had reached GDP greater than what they had in 1991. Only Moldova, Ukraine, Georgia, Kyrgyzstan, and Tajikistan had GDP significantly below the 1991 level. The recovery in Russia was marginal, with GDP in 2006-2007 just nudging above the 1991 level. This could be perceived as failure of capitalism to improve the standard of living in Russia, and combined with the aftershocks of the 1998 economic crisis it led to a return of more interventionist economic policies by Vladimir Putin's administration.
Change in Gross Domestic Product (GDP) in constant prices, 1991-2007
| Country | 1991* | 1996 | 2001 | 2006 | 2011 | Turnaround year** |
|---|---|---|---|---|---|---|
| Eastern European states | ||||||
| Russia | 100 | 63.1 | 74.5 | 103.3 | 118.3 | 1997 |
| Ukraine | 100 | 47.2 | 51.8 | 73.7 | 75.9 | 2000 |
| Belarus | 100 | 67.9 | 94.0 | 141.5 | 192.5 | 1996 |
| Moldova | 100 | 45.2 | 45.0 | 62.5 | 74.5 | 1997 |
| Baltic states | ||||||
| Estonia | 100 | ? | ? | ? | ? | ? |
| Latvia | 100 | 67.8 | 92.9 | 143.1 | 130.1 | 1993 |
| Lithuania | 100 | 64.6 | 81.5 | 119.8 | 123.9 | 1995 |
| Central Asia | ||||||
| Kazakhstan | 100 | 69.3 | 88.5 | 141.4 | 185.7 | 1996 |
| Kyrgyzstan | 100 | 58.9 | 76.1 | 89.6 | 114.4 | 1996 |
| Tajikistan | 100 | 34.1 | 45.2 | 56.0 | 98.1 | 1997 |
| Turkmenistan | 100 | 68.4 | 107.7 | 215.5 | 351.8 | 1998 |
| Uzbekistan | 100 | 82.9 | 102.6 | 137.5 | 208.4 | 1996 |
| Transcaucasus | ||||||
| Armenia | 100 | 63.3 | 84.2 | 154.7 | 172.5 | 1994 |
| Azerbaijan | 100 | 42.7 | 65.2 | 150.2 | 241.1 | 1996 |
| Georgia | 100 | 39.8 | 49.8 | 74.1 | 93.2 | 1995 |
*Economy of most Soviet republics started to decline in 1989-1990, thus indices for 1991 don't match pre-reform maximums.
**The year when GDP decline switched to GDP growth.
Read more about this topic: Post-Soviet States
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