The Economy of Russia
The 1990s: Shock Therapy and Privatisation
After the Soviet collapse in 1991, prices were freed and firms privatised at breakneck speed, causing hyperinflation and deep hardship.
The transition was painful.
Price liberalisation
In 1992 prices were freed, and inflation soared, wiping out savings.
Voucher privatisation
Citizens received vouchers to buy shares in state firms, but many sold them cheaply.
Loans for shares
In 1995, banks lent to the government in return for stakes in valuable companies, creating powerful business figures called oligarchs.
Output collapse
GDP fell sharply, and life expectancy dropped for many years.
Worthless savings
A family's lifetime savings lost most of their value in a few months.
Treating the 1990s as a clean success or failure
Effects varied and remain debated.
Key takeaways
- Prices were freed in 1992.
- Vouchers and loans-for-shares created oligarchs.
- GDP collapsed.
- Hardship was severe.
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