New Thinking policies

• Perestroika


  'reconstructing', Economic reforms

  1989: relaxed state controls over the prices, freed up the housing market and allowed private enterprise.

  Destroyed the economic base of the Soviet Union as the Russian Republic to control the gas, mining and oil industries.

  • He tried to match Reagan's increased defence expenditure. Soviet budget deficit was around 13% of GNP in comparison to 3.5% in America.
• Glasnost

  'openness' - greater freedom of expression, including media critiques of govt policy and transparency in govt decisions.

  Growth in nationalism in the Satellite states and the eventual break-up of the USSR.

  • Perestroika and Glasnost led to divisions within the Soviet Government.
• Relations with the West

  • Wanted to pursue a foreign policy based on co-operation and ending the arms race.
  • Wanted to divert expenditure into improving living standards with the USSR.
  • Thatcher: a man she "could do business with"
  • Reagan: "evil empire"
• Relations with Eastern Europe

  Brezhnev Doctrine: 1968 declared that the USSR would not allow the Eastern European countries to reject communism, as he feared that Czechoslovakia was slipping from his grasp.

  Gorbachev abandoned the Brezhnev doctrine and adopted the Sinatra Doctrine in 1988: Eastern bloc should be allowed to act independently without fearing Soviet invasion.

  • Made it clear that cheap exports of fuel and raw materials to Eastern Europe could not continue which only served to alienate Eastern European states and push them closer to Western capitalist economic system.
• Democratic reforms - Demokratizatsiya

  Reforms brought multi-candidate and presidential elections.

  • eventually dismantled the power of the Communist Party and led to other political parties being formed by 1990
• Obsolescence of Comecon

  June 1988 - Duropean Commission was able to set up trade and cooperation agreements with individual Comecon members, starting with Hungary.

  • Allowed countries to the obsolescence of Comecon, and made trade with the Soviet Union less likely.
• OPEC

  Organization of Petroleum Exporting Countries

  Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

  Made in 1960 so that countries that produced and exported oil could reach common agreements on prices and pursue common policies.

  • Doesn't include all oil-producing countries but it controls at least 2/3 of known oil reserves.