1990 USSR: Reform, Revolution, or Retrenchment (A)

Abstract

In August 1990, Mikhail Gorbachev, president of the Union of Soviet Socialist Republics (USSR) and general secretary of the Central Committee of the Communist Party, confronted one of the most difficult dilemmas of his career: how to improve the country's economic performance. This case set highlights Gorbachev's reform efforts from 1985 to 1990. Numerous measures of economic performance had declined, and the USSR faced serious crises of economics (declining productivity and financial insufficiency), federalism (challenges to the primacy of the Soviet Union), and separatism (ethnic and nationalist agitation). Three groups of advisers offered competing plans. One plan focused on economic revolution toward a market economy; one on reform of the existing centrally planned economy; and a third on economic retrenchment and reinforcement of socialist discipline that had prevailed over the previous 73 years. Students must evaluate the benefits and risks of each alternative and recommend a course of action. Excerpt UVA-F-1969 Dec. 4, 2020 1990 USSR: Reform, Revolution, or Retrenchment (A) In July 1990, Mikhail Gorbachev, president of the Union of Soviet Socialist Republics (hereafter USSR or Soviet Union) and general secretary of the Central Committee of the Communist Party, confronted one of the most difficult dilemmas of his career. The program of economic and political reform that he had advanced over the past five years had now reached a critical phase. Should he push forward or slow the reform agenda? The situation was urgent: deep recession, high inflation, civil unrest, separatist movements, worsening polarization, and a financial crisis. The Eastern bloc of Soviet-controlled countries was disintegrating. The combination of price controls, mismanagement, and inflation produced alarming shortages, forcing citizens across the Soviet Union to stand in line for hours to obtain such simple essentials as bread and milk. Meanwhile, episodes of looting and ethnic violence had begun, as opportunists sensed cracks in the once-unchallengeable state security apparatus. At the 28th Congress of the Communist Party of the Soviet Union (CPSU) in the first half of July, opposition leader Boris Yeltsin dramatically resigned in protest against the slow pace of Gorbachev's program. At the other extreme, conservatives opposed the rapid pace of ambitious change. With varying support for his own policies, Gorbachev needed to find a way to absorb his challengers' demands, fend off revolt from the Communist Party establishment, and—most challenging of all—get his nation's government and economy back on stable footing. Three groups proposed competing strategies: . . .