Alex II/iii- Economic reform and development
Subdecks (1)
Cards (33)
- Economy - Crimean War
- Russia lagged in industrial and technical capacity
- Upcoming powers were Germany, France, Britain and US
- Agriculture was at mercy of climate - no reserves
- Food needed to fuel people working in factories
- Untapped resources
- Poor infrastructure and communication
- Serf economy inhibited economic development as no incentive
- No internal markets as money wasn’t main form of payment
- No capital accumulation due to this
- What was in place under Alex II - Industrialistion?
- State run factories making military equipment by serfs
- Domestic raft based industry - Produced at home - Hand to mouth - Weaving, spinning & carving
- Artels - Home with attached workshop - Blacksmiths, Tanners
- Cotton Industry ( Large-Scale ) : Near St Petersburg
- Sugar Industry ( Large - Scale ) : Sugar beet grown in green belt around Ukraine
- Action Taken - Economy?Appoints finance ministers to promote modernisation
- What was Alex II’s dilemma?He had no middle class to push the economy so it was all state ran
- Who did Alex II appoint in 1862?Michail Von Reuters
- What were the reforms under Von Reuters?
- Reform the treasury
- Abolish tax farming
- Extending bank and credit facilities
- Reduction of import duties
- Introduce government subsidies to private entrepreneurs to develop railways
- Encourage foreign investment
- Set up joint stock companies
- What were the treasury reforms?
- New tax collection arrangements
- Audited accounts
- Setting budgets
- Streamlined money and stopped the government haemorrhaging
- What were the Tax farming reforms?
- Removed the middle man so therefore more money for the treasury
- Introduced indirect taxation on vodka and kerosene
- What were the bank and credit reforms?
- 1860 - state banks
- 1862 - municipal banks
- 1869 - savings banks introduced
- People started making money that could be lent out to more entrepreneurs
- Explain the reduction of import duties?
- Russia required goods from abroad to stimulate their economy
- Reducing import duties made goods cheaper and encouraged trade and purchase
- Explain the government subsidies under Von Reuters 1860’s?
- Opposite of tax
- Incentive to develop transport
- How did VR encourage foreign investment?
- Through an annual dividend
- Explain the set up of joint stock companies under VR
- Passes new legislation to regulate joint stock companies meaning they’re much safer for investors
- Therefore increasing investment through removal of risk
- Positive Results of VR’s reforms
- Annual growth rate of 6%
- Oil extraction in Bacu
- Iron from Donetsk
- Nobel brothers invited to support oil industry
- Hughes set up steel and iron works in Yuzovka
- Textiles remained dominant industry though - not as good as potential
- Negative results of VR reforms
- Economy still comparatively weak to Britain
- 1/3 state expenditure on foreign debt - not expansive
- Rouble still wild variations in value as people still nervous to invest in weak economy
- Emancipation didnt have anticipated results - most peasants stayed on farms - no economic growth
- Not enough tax
- 66% gov revenue came from indirect taxation - prices rise - peasants become poorer - less expenditure in goods
- Reduction of import duties was short term and rose so affected factories
- Domestic market remained small
- What did he implement between 1887 - 1892?
- Tariff of 30% on value of raw materials imported - made foreign goods expensive so domestic cheaper which increases demand
- Increase foreign investment - negotiated loans particularly from french
- Exported lots of grain to balance budget and go into surplus
- Major investment in railways - remarkable achievement with grand expansion of lines
- What happened to Vyshnegradsky?He was sacked
- What were the results of vyshnegradskys endeavours?
- Major famine from 1891 - 1892
- Didn’t save grain
- 17/39 provinces saw famine
- Typhoid and cholera became prevalent
- People were too weak to fight
- Over 350,000 people died as a result