Economic development to 1914

• INDUSTRIAL TRANSFORMATION

  • Annual growth rate of more than 8% per annum from 1894 to 1913
  • Masterminded by Witte who built on the policies established by Vyshnegradsky
  • Railway trackage was doubled
  • Coal output jumped from 183 million puds in 1890 to 671 million in 1900
  • Foreign investment improved with France supplying a third of all foreign capital
• WITTE

  • Finance minister 1892 – 1903
  • Focused on industrial improvement with a particular interest in railways
  • The Trans-Siberian Railway
  • Witte negotiated huge loans, particularly from the French and drew in foreign investors to put money into Russian joint-stock companies
• TRANS-SIBERIAN RAILWAY

  • It was constructed between 1891 and 1902
  • It linked central European Russia and Moscow with the Pacific Ocean
  • It brought economic benefits, both through its construction and by opening up western Sibera for emigration and farming
• VYSHNEGRADSKY

  • Minister of Finance 1887 - 1891
  • Introduced a prohibitive import tariff of 30% designed to boost home production and helped the iron industry and the development of industrial machinery
  • The production of crude oil and coal dramatically increased. Coal from 3 million metric tons in 1880 to 6 million metric tons produced in the 1890s
  • Grain exports increased by 18%
  • He increased indirect taxes and mounted a drive to swell grain exports
• VYSHNEGRADSKY FALIURES

  • Increasing grain exports meant that many were left with no stores for the winter and it was said that he said ‘We ourselves shall not eat, but we shall export’
  • The policy resulted in bad harvests which brought widespread famine in which thousands died. He was dismissed in 1892.
• HEAVY INDUSTRY

  • By 1914, Russia was the worlds 4th largest producer of coal, pig iron and steel
  • Russian oil production trebeled from 153 million Puds to almost 570 million between 1885 and 1913
  • Russia became the worlds 2nd largest producer of oil and 4th largest producer of gold mining
• WEAKNESSES OF ECONOMY BY 1914

  • Interest rates to service foreign debt were very high and a major drain on resources. By 1900, 20% of the budget was used to pay off foreign debt
  • Witte prioritised heavy industry over light industry. Fewer smaller, sophisticated machine tool and electrical industries that were not developed sufficiently - Needed for imports and help modernise manufacturing 
  • Witte neglected agriculture, which suffered from under-investment
• PROBELMS IN AGRICULTURE 1906

  • Before 1906, most farming had remained small-scale in the hands of former serfs and state peasants, tied to their local mir by redemption dues and heavily taxed and exploited by the state
  • The population was growing, but the amount of land to farm did not, the average holding even fell
  • The grain output on farms was a lot lower than places like America because the soil in Russia was deprived of manure
  • They were still using manpower, rather than new technology
• STOLYPIN REFORMS

  • He wanted the peasants to become the permanent owners of their land so they could develop it as they wished and without interference from the mir
  • In November 1906, he passed legislation that meant a peasant could withdraw land from the commune and consolidate the scattered strips into one compact farm
  • Land commissions were set up, containing representatives elected by the peasants to supervise this procedure
  • A new Peasants Land Bank was also established to help peasants fund their land ownership
  • In January 1907, redemption payments were officially abolished
• STRENGTHS OF AGRICULTURAL ECONOMY

  • Grain production rose annually from 56 million tons in 1900 to 90 million by 1914. By 1914, Russia became the largest cereal exporter in the world.
  • There was a run of good harvests, particularly that of 1913, also played a part in increases in production
  • Stolypin's encouragement to emigration took 3.5 million peasants away from Siberia and helped Siberia to develop into a major agricultural region
• WEAKNESSES OF AGRICULTURAL ECONOMY

  • By 1914, only around 10% of land had been transferred from communal to private ownership
  • Landowners were often reluctant to give up land and difficulties of dividing remained in the hands of the nobility
  • Probably fewer than 1% achieved kulak status. Many of the rest were forced to leave their farms and join the bands of migrant labourers looking for either seasonal farming work or industrial employment
  • The war prevented Stolypins reforms from having effect