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17. Increase ECONOMIC CRISIS (textbook)

§ 17                                                                           Increase ECONOMIC CRISIS


1. Features Industrial development in Ukraine

Administratorworked actively and command control system, which dominated USSR during neostalinizmu, in general fatally influence on economic development country.

Together the same can not be deny that in the face of this system is still made some sporadic attempts to solve difficult economic problems, make the economy more workable and effective. However, these attempts were doomed to failure, as in the USSR, so those in Ukraine, traditionally on first place treated problems politics and ideology, and not economy. Business mainly developed on extensive basis.


Terms and Notions

            Extensive systems of management - System management, where gross output is achieved by expanding production capacity, not by raising his efficiency.


In 1965, (By initiative of the Prime Minister USSR О.Kosygin ha Group Economicsomistiv under leadership О.Lieberman began economic reform.

Content and program it was pretty controversial.

On the one hand, She created opportunities for expansion of economic autonomy of enterprises, contributed to the development of local initiatives, strengthened economic incentives work. In parallel preserve gross production indicators have been introduced new: value sold products general payroll total amount of centralizedanyh investment.

To encourage initiative companies part profits left in their disposal. Assumed much increase role economic calculation and reduce the number of performance indicators enterprises that were approved from above. During the reform local authorities even allowed to make changes to "Holy holy" Soviet economic о Development Five-Year Plan

On the other hand, plan economists, reform should was strengthen position of the Federal authorities. In particular, likvidovuvalys made by N. Khrushchev radnarhospy and recommenced work more than 40 union ministries and departments. This significantly limiting the economic independence of Soviet republics. Except union ministries, the country began to act impacts such departmental authorities as State Committee on pricing supply and others.

In fact, kosyhinska reform was a new stage nadtsentralizatsiyi Economy, as henceforth 90% of enterprises Republic directly subordinate to Moscow.

October (1965) Central Committee plenum Communist Party of Ukraine, considered the economic reform plan, approved it, with this noting that elimination radnarhospiv is critical political and national economic value (it is interesting that in April 1957 Central Committee plenum CPU Conversely, noted great role in the life of Ukraine is radnarhospiv).

Implications kosyhinskoyireforms were ambiguous.

Go to the undoubted achievements of the reform should include active і progressive industrial development republic 1966-1970 biennium, which was one of the most productive in the history of Soviet Ukraine.

During this period, including production Industrial production increased in the Republic on 50%, labor productivity in this field on 28%, national income by 38%. These figures showed prefer self-financing system management, on which crossed the vast majority industrial enterprises of the republic. They given 90% of total income and production industrial products.

In the course of economic reform accelerated development Fuel and Energy complex of the republic. In particular, the fiber act Zaporozhye, Vuglegirs'ka, Krivoy Rog тand some other thermal power plants. In 1980, were put into operation the last two units Dnipro-2 in Zaporozhye.

Notable successes in this period reached Ukrainian petroleum and gas industry. In the mid 70's the PA area Ukraine began operation of 26 new oil and gas fields that greatly increased oil and gas production in the republic.

Positive changes were observed also and development mining, coal and steel industry. Carried scale construction of mines, mines, domain, Martin, rolling states.

Rapidly developing field that determined the technical progress of industry engineering, metal, chemical and petrochemical industries.

In fact emerged and formed a new branch microbiological industry. Substantially increased supply agriculture concentrated fertilizers, plant protection plants.

Research efforts in Ukraine was established design and manufacturing electron atbchyslyuvalnoyi technology, advanced equipment and facilities automation. In particular, scientists of the Institute of Cybernetics, USSR Academy of Sciences completed development of computers of new generation "Mir-2", "Dnepr-2" and scientists of the Institute of Electric them. Paton introduced production of more than 280 inventions with the economic effect of 200 million rubles.

An important feature of contemporary was the creation of domestic engineering systems of machines, automatic and production lines, new scientific technologies. In 1975, for example in industry of Ukraine complex mechanization and automation were introduced at 100 companies у 6 thousand shops, stations and plants started to operate mechanical and streams automated line.

On Dnepropetrovsk Metallurgical plant was put into established local designers unique state for railroad rolling axis. This unit was twice and four times lighter productive than similar foreign like. On Kharkiv Turbine Factory mastered the production turbines capacity 500 thousand kilowatts.

In the Republic started production improved locomotives, powerful tractors T-150, beet and corn harvesters, new planes and ships, not yielded the best foreign analogues 60-70's

Millionth car Zaporishtal Komunar (1975)


However, Ukraine's economy is and avoided the negative consequences of economic reform 60-70's, that eventually brought the economy to global crisis.

In particular, in the course of reform Spent raised in the previous period Business Communications"Ties, every year markedly increased cost production sharply fell discipline supply.

The actual removal of republican of the management of its own territory, strengthening administrative-command methods of management by the union of bodies excessive centralization of economic processes deprived kosyhinskueconomic reform and the real prospect of the final positive results.

In 70-80-ies, after termination Reformation processes and transforming the economy of the Soviet Union on the extensive road development, economic crisis engulfed the republic.

Crisis characterized direct dependence from the central leadership, unconcealed ignoring national interests of Ukraine.

The vivid examples of economic policy was the concentration of forces. Over a relatively short period of giant, but economically neobhruntoBathrooms and ineffective projects. By relatively short period of time were constructed "Handmade" Sea to the Dnieper, the largest in Europe Dnieper, Zmeevskaya, Burshtynska thermal power та other giant new buildings. They were often harmful and hazardous to the environment, primarily for live person.

In Ukraine the initiative central leadership placed technogenic harmful production, including about 1 thousands of chemical plants, and only a few percent of products that produced them, the republic used to their advantage.

In the republic during this period without proper scientific evidence is too high, untested developed rapidly nuclear power. In particular, unfolded construction of powerful nuclear power plant densely populated and shallow South-West and South economic regions of Ukraine. In rivers Dnieper. Gums and Pripyat near Kyiv shock rapidly constructed shortly Fatal for Ukraine's fate The Chernobyl nuclear power station.

As a result of such thoughtless attitude to the natural resources of the Ukrainian land, in the republic that had only 2.6% of the USSR, was built 40% nuclear power plants in the Soviet Union. At that produced them Electricity not used for the needs of the republic, and distributed as rule, in European countries.

Much of the financial, material and human resources necessary to absorb vast Siberia and Far East vykachuvalasya from Ukraine.

On the eastern development perspective oil and gas allocated huge funds. In addition to Ukraine for work in these regions was mobilized thousands of skilled workers. As Consequently, in the Tyumen region, for example, now lives more than half a million Ukrainian.

As a result of unbalanced development share of the national economy sectors, which worked on the consumer market, total gross output was less than 29%, while in developed countries, it reached 50-60%.

The trend to economic slowdown Development has acquired a permanent character, which eventually led to real stagnation in the economy. Any changes in it depended only on cash investments. Finally taken hold extensive method of farming.

Demonstrated this principle entity was the state policy on investment.

In the 70 years it became common construction of huge objects-giants are allocated for the construction enormous funds. This kind of "gigantomania" in combination with a hidden inflation has meant that the cost of such facilities on average exceeded scheduled for 25-50%.

Distribution has become a kind of practice for which considerable forces and resources focused on completing the most important at some point objects, leaving a number of unfinished buildings. In the socio-economic vocabulary Brezhnev period came even specific term "Long constructed". Such long-term construction annually spend up to 75% on investment.

Tenth Piatyrichka (1976-1980 biennium) was declared "Five of efficiency and quality, but really it was not so. Instead, economic growth was achieved only maintaining economic proportions of 30-50's.

This bid was made for imports industrial equipment and consumer goods from abroad in exchange for energy exports. After eight-increasing world oil prices in 70th years in the USSR hlynuv real flow "petrodollars. But the costly economic mechanism instantly devoured these huge sums, directing them to the next viable and environmentally dangerous "ending project.

However, such a policy in Ukraine chronically neglected problem five-year plans.

In particular, the national income of the republic the ninth Five (1971-1976 biennium) the plan was to increase by 37-39%, but your performance (and obviously overestimated) was 25%.

The next, tenth Five (1976-1980 biennium), growth tsoFirst indicator was provided at the level achieved, but the result obtained was only 18%.

If some of the standards development industry (electricity, cement, coal, etc.) but not would approach the target, the agriculture, still remained most neglected link of national economy.


2. Kolkhoz-state state farm system

Outside the impression that it is in 70 years of raising the agricultural sector in Ukraine was paid effort and attention. It is in this period actively introduced industrial global program of land reclamation, mechanization and agricultural chemicals. During the decade in agriculture was allocated 27% of all investment in the economy.

But in the end all these measures proved ineffective, brought mostly quite the opposite, unexpected results.

In particular, mechanization in practice become a regular supply of farmers and low- unproductively technology; chemicalizationcaused pollution Ukrainian black soil and agricultural produce harmful chemicals, reclamation, a waste of 16 billion rubles, ruined fertile land and seriously violated the ecological balance of the republic.

In these deficiencies should be added the low efficiency of human resources in a village waif system processing and storage of agricultural product that results in annual losses of crops were 30-33%.

Typically, advanced agricultural initiative practitioners could not find support bureaucratic local government. For example, had a positive effect on the collective contract salary by the end in work. It was first introduced in 1971 more in KryvoozerskNear the Mykolaiv region. But experience Bashtanskymachine used for 12 years only 5% of Ukraine.

The authorities deliberately halmuvavsya development of private farms of peasants, which had led to significant reduction in livestock, swine, sheep, goats. This, in turn, caused reduce the number of manufactured and agricultural products. eventually reduce peasants' incomes.

Also remained difficult living conditions and rural labor. In households, will carry on despite mechanization, remained much manual work.

In rural areas, still not lack of schools, kindergartens, clubs, organized roads, schools and medical consumer services. Former methods of forced insertion peasants to the land has not worked well, and because workers in the village was mass go to a more civilized city. During the 1966-1985 biennium this decisive step resorted 4.6 million people.

As a result of such an active migration з map of Ukraine in 1972-1986 biennium disappeared as "unpromising" 1502 village. In Ukrainian villages, usually left or retired people who could not venture or could not start a new life in the city.

These changes led to painful problems associated with lack of human resources in rural areas. Visual Verification these negative processes were the traditional seasonal "Mobilization" of workers of other sectors the economy, education and science to harvesting. It is clear that is compelling urban population into agricultural labor is contributed increase its productivity and quality.

Despite these objective and subjective difficulties that significantly retarded the development of agriculture, not only republic provide their own food requirements, but the instructions Union bodies found to supply agricultural products to other regions of the USSR. In particular, on the verge of 70-80's it produced 60% of the Federal the amount of sugar, 40% sunflower, 26% butter, 23% meat and more.

The growing alienation of farmers from results of their work in collective and state farms has continued steadily degrade Agricultural production growth rate is constantly falling.

If the 60-70-ies they were on average 4,5% a year, in 1981-1985 3,9%. In the second half 70 her years of average growth of agricultural production was 1,5%, and in the first half of the 80's only 0,5%.


Abandoned village (80 years)


Inefficient and slowed rural development Economy poyasnyuvavsya not only crisis kolkhoz-state farm system.

Significant role played in its decline also general Principles economic management, that prevailed in the USSR. The central leadership develop plans, specifications, guidelines, often ignoring the local specificity, real possibilities, even the climate of a region of Ukraine. Peasant collective farm was completely removed from the development and adoption of its own production problems, had just thoughtlessly do wrong decision. This entailed a complete irresponsibility rural workers for the outcomes of work, mismanagement, inflicted considerable material and moral losses.

Given the extremely difficult situation of food supply, the government in 1982 Food has taken a specially designed program, its performance was publicly announced case.

But many plenums, assets, and meeting Conference had no effect on improving the situation of supply food.

Administrative-command methods of agriculture led to a result in catastrophic consequences.

From 1966 to 1985 because of unprecedented mismanagement Ukraine sown area declined by more than 1 million ha. Harvested grain in the 1981-1985 biennium amounted to 39.3 million tons per year whereas in the 1976-1980 biennium He was 43 million tons.

Despite significant investment in agriculture (101 billion rubles. in the 1966-1985 biennium), their output remained low. Overall performance Labor agriculture in the USSR was twice lower than in USA. Extensive way of development of agriculture proved inefficiency. Global nature of the food problem has become one of the signs of the crisis of the totalitarian system.

Economic Reform 1966-1970 biennium caused some positive changes in development of industry and agriculture of Ukraine.

But because of its gradual contraction, economic growth, notably the Republic slowed.

Late 70's in the early 80's years in Ukraine's economy began a comprehensive crisis. Attempts to revive economic development did not give the desired results, but rather only worsening situation.


Structural crisis of Soviet   MODEL
Socio-political development

Economic Crisis:

deficit   goods;

failure or slow the introduction of new   technologies;

low quality of most goods;

food crisis, chronic crisis of rural   economy;

hidden inflation (rising prices of   constant wage);

most extensive way of development   economy;

high zatratnistproduction, energy and materials consumption products.

Political crisis:

military adventures and the inability to get out of them   (Afghanistan, Ethiopia, Angola, etc.);

senior management's inability to respond to   New trends in the world. "Aging" leadership;

inability of legislative bodies;

loss of dynamism in the development of Soviet   model and therefore its attractiveness to foreign countries;

corruption in higher echelons of power: corruption,   criminalization, recruitment, promotion on the principle of love,   relationships, personal loyalty;

increased repression against dissidents.

The ideological crisis:

disappointment in the correctness of the chosen path   development (construction of communism);

differences between ideological dogmas and   realities of life;

realize the goal of unreality   construction of communism;

growing dissident movement and confidence in   society;

strengthening ideological pressure on society.

Environmental   crisis:

thoughtless exploitation of natural resources;

lack of scientific evidence in   placement of production facilities;

destruction of the environment suitable   for life (pollution of reservoirs, atmosphere, etc.);

gradual degradation of the nation (the genetic changes   increase in childhood diseases and birth unhealthy children, reducing   birth, growth of number of chronic diseases, etc.).


Questions and Tasks

1. What are the features extensive system entity?

2. Who led economic reform in 1965?

3. What were the main consequences of the administrative-command management systems in agriculture?

4. What is "uncompleted construction project?

5.  What lies Content Policy "gigantomania in Ukraine?

6. What changes in the management of national economy brought a reform in 1965?

7. Identify the chronological sequence of events:

- Ninth Piatyrichka;

- Adoption Food program;

- Start "kosyhinskoyi"Reform in Ukraine;

- tenth five years.

8. What are the objectives pursued economic reform 1965? What impact it had in Ukraine?

9. What were the consequences of betting on "petrodollars" for the Ukraine?

10. What are the consequences of migration had taken place in rural areas in 70 - 80's?

11. Why do you think kosyhinskaReform failed to reach the final success?

12. What would you be able to explain that the extensive road economic development in result led to the crisis?

13. What are the measures Your opinion, could bring the Soviet economy Union crisis?