Consequences of Shock Therapy
- In the 1990s, some big changes happened in Russia and nearby countries. They tried a method called shock therapy to make their economies better. But instead of making life better for people, it caused a lot of problems.
- In Russia, the big factories that the government ran almost broke down. They sold about 90% of these factories to private people and companies. But because they used market forces instead of government plans, many factories shut down. This caused what people called “the biggest garage sale ever.” Some valuable factories were sold for very little money. People got vouchers to join in the sales, but many just sold them for quick cash.
- The value of Russia’s money, the ruble, went down a lot. Prices went up so fast that people lost their savings. The farms where food was grown fell apart, so Russia had to buy food from other countries. By 1999, Russia’s economy was worse than it was in 1989. The way things were traded and sold changed a lot, and there wasn’t anything to replace it.
- The help that people used to get from the government got taken away. This made a lot of people poor. People in the middle class became less important, and smart people left or stopped working. In many countries, criminals took over parts of the economy. Selling off businesses made the gap between rich and poor bigger.
- Building up democratic ways of doing things didn’t happen as much as fixing the economy did. The rules for how the countries worked were made quickly, and many gave a lot of power to the president. In some countries, presidents became very powerful and didn’t let people disagree with them.
- Things started to get better around 2000, especially for countries like Russia. They started to sell lots of natural resources like oil and gas, which helped their economies. Some countries got money from letting oil pipes cross their land. And some factories started working again.
Consequences of Shock Therapy| Class 12 Political Science Notes
In this article, we will delve deep into the topic of “Consequences of Shock Therapy” from Chapter 1 of the NCERT Class 12 Political Science book. These notes are specially curated by an expert team at w3wiki for all the students.