Economic Situation

• Russia had become highly industrialised and urbanised. The free market had been eliminated and in 1926, 17% of the population lived in towns, but by 1939 33% did. By 1940, the USSR had overtaken Britain in iron and steel production and was not far behind Germany.
• Before WW2 Stalin had lain the foundations for the ultimate victory. Coal and oil production were vastly stepped up in the Third Five Year Plan and 9 aircraft factories were constructed in 1939.
• Between 1938 and 1941, spending on rearmament rose.
• However, economic development was uneven as consumer production was neglected so they were scarcer in 1941 than under the NEP and so the quality of goods was poor, even though labour productivity increased.
• Bureaucrats over zealously pursued targets. The central planning system was inefficient and was made worse by the purges of specialists and managers orgnisation at local levels was at times chaotic.
• The nation was still producing less grain than under the NEP. A major crop failure in 1936 weakened the nations reserves and insufficient knowledge of modern farming techniques and use of machinery and individuals were insufficient trained to use the little available.