Witte

• • appointed Finance Minister in 1892, known for his role in railway development.
  • Advocated rapid industrial expansion to offset costs of Emancipation and military expenses.
  • Policies aimed to bolster state power rather than improve living standards.
• economic policies resulted to known as The 'Great Spurt'
• • State-driven Capitalism:
  • State controlled significant portion of key industries.
  • State bought two-thirds of metallurgical production in 1899.
  • State controlled around 70% of railways by early 20th century.
• foreign Investment:

  • Encouraged foreign investors with cheap labor and abundant raw materials.
  • Industries like oil, textiles, coal, iron, steel, and railway construction flourished.
• In order to buy capital equipment from abroad he taxed the peasantry heavily. Salt, kerosene and alcohol were typical everyday items taxed. Grain prices were kept low and the surpluses sold abroad to buy capital equipmen
• 1897 he had put Russia on the Gold Standard which attacted massive foreign investments in government securities and gained Russia a high credit rating: stable currency/ econ growth but inflation and issues supply/grain
• • Economic Growth:
  • Revenues doubled between 1892 and 1903.
  • Production surged: pig-iron by 216%, petroleum by 449%, railroads by 71%.
  • Russia became fifth largest economy globally by 1914.
  • Produced more petrol than all other countries combined. BUT 'colony of europe' as high debt from gold standard
• • challenges and Criticisms:
  • Economic slump in 1902 led to unemployment and peasant unrest.
  • Modernization threatened Tsarist regime: growth of industrial working class and technical middle class. believed could learn from west
  • Reliance on foreign capital made Russia susceptible to social instability concerns.
  • Witte's Dismissal:
  • Dismissed from Treasury in 1903, given ceremonial post of Chairman of Ministerial Council.
• Russia railway increased by 1881 around 20,000km = 1914 around 70,000km