USSR Economy & Deals with Pakistan

1. USSR Background

2. Socialist Approach

3. Economic policy/plan

4. Industrial Growth

5. Rise of GDP Before w war 2

6. FALL of GDP during W War 2

7. Economic revival After w war 2

8. Ruble vs. pound sterling parity

9. Collapse of USSR

    

Russian dominating USSR is the world's first country to be based on Marxist socialism. In USSR ,all the government levels were controlled by communist party and all the industries and agricultural farms were controlled by the state. USSR, commonly known as soviet states was confederation of 15 republics,i.e;Russia,Ukrain,Georgia,Belorussia,Tajikistan,Uzbikistan,Azerbaijan,Kyrgiztan,Turkmanistan,kazakhstan,Moldova,Armenia,Latvia,Lithuania and Estonia.

                                                                                                                                             Two major economic policy maker of USSR were" LENIN”, who created the NEP, and "STALIN”, who created the planned economy. In 1921,forced requisitioning of grain had resulted in low agricultural production and resulted unrest in the masses, LENIN took an alternative approach that is NEP (NEW ECONOMIC POLICY) which was approved in 10th congress of the Russian communist party(BOLSHEVICKS).NEP allowed the economy to be privatized except "the commanding heights “which included foreign trade, heavy industry, communication and transport. Due to NEP immediate improvements were noted but the soviet economy was still in trouble because of prolonged war ,low harvest and natural disasters.

                                                                                                                          In 1928,Stalin took totally different approach that is without waiting years for capital to accumulate through light industry and without relying on foreign financing ,he gave five year economic plan to built a heavy industrial base at once. The high paced heavy industrialization by passed the Germany and earlier Japan's industrialization .Economic plan performed very well and USSR became the world's leading producer of oil, coal, Iron, ore, and Cement ,manganese ,gold, natural gas and other minerals during the early and mid-1930 s .Soviet union economy suffered a severe punishing blows and GDP fell 34% between 1940 to 1942 due to German invasion. It took almost a decade to recover the soviet industrial output to the 1940 level.

                                                                                                                                                 Under the leadership of Leonid Brezhnev ,large scale economic reforms were made to revitalized the economy. New redenominated soviet ruble was issued which maintained the parity with the pound sterling until the dissolution of USSR in 1991.In starting of 1965 ,the profitable economic methods took place rather than state administrated organization and enterprises. By 1970, the soviet economy was on its peak and was estimated at about 60%of the size of the USA in terms of estimated commodities (steel and coal).

                                                                                                                                              But as every rise has to face down fall ,Brezhnev period began with the high speed economic growth ended up with social, economic and political stagnation in soviet union. Throughout his rule no major reforms were initiated .The chairman of the "council of the ministers" ,Alexei Kosygin introduced two reforms to reverse the declining trend of growth but Brezhnev used his powers to stop these reforms introduced by reform minded Kosygin. After the death of Brezhnev in 1982 ,his successor ,Andropov assumed powers and introduced modest reforms but he died very next year of his rule in february,1984.His successor Cherenkov continued much of Andropov's policies which never changed the standstill situation of the economy. This era of stagnation is ended up with the successor of Cherenkov, Mikhail Gorbachev who introduced many policies leading to 'Revolution of 1989' and the "Dissolution of USSR" in 1991. 

          

                      Pakistan relationship with USSR

At the time of independence, when Pakistan came into being, the world was divided into two blocks i.e.; communist and capitalist. Communist block was led by soviet union and capitalist block led by united states of America. Confrontation of these two blocs put newly established country Pakistan into dilemma to join which one bloc led by these two super powers of that time. Finally ,Pakistan made the decision and aligned with the western bloc which created hostility in Moscow against Pakistan.

                                                    In 1965,    Z A Bhutto, paid a first state visit to Moscow, and resolved the bilateral political and territorial issues between two countries. On April 3, 1965,president Ayub Khan paid a first ever state visit to Moscow. In result of this visit both countries concluded on an agreement signed on 5june,1965.USSR,helped to build technical industries, oilfields and funded in energy sector. In 1971,USSR  helped Indian aggression in East Pakistan by blocking Chinese and US support to Pakistan and in result of this soviet help a new country came into being named as Bangladesh.

                                           After the intervention of soviet union in Afghanistan, Pakistan took it's revenge from USSR for it's unconditional support to India and soviet role in 1965 and 1971 war by an covert operation in Afghanistan. ISI, with the help of CIA armed the islamist mujahidin and eradicated all the communist elements from Afghanistan.