Industrial Transformation

• From the mid-1890s Russia's economy underwent a major transformation with an annual growth rate of more than 8%
• Witte believed that industrialisation was essential to curb revolutionary activity. He built on the policies established by Vyshnegradsky in the 1880s and sought to state-manage industrial growth
• Interest rates were raised to encourage foreign loans and a new Rouble backed by the value of gold was issued in 1897 to increase business confidence
• Foreign capital was raised to fund the development of railways electricity plants mining and oilfields
• Technical advisors managers and skilled workers were sought from overseas and Heavy industry was prioritised over lighter industry
• Russian businessmen accumulated sufficient wealth to expand their enterprises and found new ones while state involvement remained an essential feature of economic growth throughout the period to 1914
• The capital was used to fund public works develop Russia's infrastructure- railways telegraph lines and electrical plants- as well as develop mines oilfield and forests for timber
• By the early 20th century the state controlled 70% of Russia's railways and held extensive holdings over the growing 'heavy industrial plant' and the late 1890s were dubbed the 'great spurt' as the industrial economy progressed
• The late 1890s were dubbed 'the great spurt' as the industrial economy progressed