Question

what were the consequences of shock therapy​

Answer 1

Answer:

Consequences of the Shock Therapy

The shock therapy ruined the economies of Russia and east European countries. Since restructuring was carried out by market driven forces and not by the government implement policies, there was a disappearance of almost all industries in the region.

Answer 2

$\huge\mathcal\red{ShócK TherapY}$

• After the disintegration of the Soviet Union, the model of economic transition in Russia, Central Asia and east Europe which was influenced by the WB and IMF came to be known as ‘shock therapy.

$\huge\mathcal\red{Consequences}$ of the Shock Therapy:-

• The shock therapy ruined the economies of Russia and east European countries.

• About 90% of industries in Russia were put up for sale to private individuals and companies

• Since restructuring was carried out by market driven forces and not by the government implement policies, there was a disappearance of almost all industries in the region. Valuable industries were undervalued and were sold at throwaway prices. This came to be known as “the largest garage sale in history”.

• The value of the Russian currency, ruble declined considerably. People lost all their savings because of high rate of inflation.

• The collective farms disintegrated leaving people without any food security. Russia began to import food. Its old trading structure broke down without any alternative in its place.

• The government withdrew subsidies on various goods and services which further pushed people into poverty. In such a situation mafia began to control economic activities in Russia. Privatisation led to greater inequalities among the people.

• Establishment of democracy was not given a priority. Constitutions of the former republics of the USSR gave wide powers to the President. The President in some eastern European countries became dictators.

• The economies of the eastern European countries including Russia began to revive from year 2000 onwards.