1. The Soviet Union collapsed in 1991 due to economic and political problems including a weak economy, widespread corruption, and rising nationalism in the republics. 2. Mikhail Gorbachev's reforms of perestroika and glasnost weakened the communist party's grip on power and emboldened independence movements. 3. The Soviet war in Afghanistan and military spending drained the economy while Gorbachev's openness policies destabilized communist rule, leading to the dissolution of the USSR and formation of 15 independent republics.

1. THE COLLAPSE OF THE SOVIET UNION,
SOCIALIST BLOC AND ITS ECONOMIC
CONSEQUENCES
Kumar Nalinaksh
75771
Master of Management (Business Management)
Wyzsza Szkola Menedzerska W Warszawie
kumarnalinaksh21@gmail.com

2. Index
The collapse of the Soviet Union, Socialist Bloc and its economic
consequences can be explored by going through following topics: -
1. USSR and Republics.
2. Socialist block and aligned states.
3. Problems with USSR.
4. Factors which led to the disintegration of the USSR
i. Second cold war (1979 – 1985)
ii. Soviet war in Afghanistan
iii. Reagan and Thatcher
iv. Polish solidarity movement and martial law
v. Economic issues, Soviet and US military confrontations
vi. Gorbachev reforms – Perestroika and Glasnost
vii. Revolutions of 1989
viii. Fall of Berlin wall and German unification
ix. 1991 August Coup
x. Dissolution of Soviet Union and The Commonwealth of Independent
States.
5. Consequences of the disintegration of the USSR
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3. USSR and Republics

4. Confederation of 15 republics with Russia as the
leader.
The Union of Soviet Socialist Republics (USSR) had a total of 15 republics before its disintegration in 1991.
1. Armenia
2. Azerbaijan
3. Belarus
4. Estonia
5. Georgia
6. Kazakhstan
7. Kyrgyzstan
8. Latvia
9. Lithuania
10. Moldova
11. Russia
12. Tajikistan
13. Turkmenistan
14. Ukraine
15. Uzbekistan
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5. USSR and Neighbors
Europe Asia Sea Boarders
Norway
Finland
Poland
Czechoslovakia
Hungary
Romania
Turkey
Iran
Afghanistan
Mongolia
China
North Korea
Japan
USA

6. Socialist block
Warsaw Pact and Comecon
1. Albania (until 1968)
2. Bulgaria
3. Cuba (from 1959)
4. Czechoslovakia (until 1989)
5. East Germany (until 1990)
6. Hungary (until 1989)
7. Mongolia
8. Poland (until 1989)
9. Romania
10. Soviet Union
11. Vietnam (from 1976)
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Other aligned states
1. Afghanistan (1978–
1991)
2. Angola
3. Benin
4. China
5. Congo
6. Ethiopia (1974–1991)
7. Grenada (1979–1983)
8. Kampuchea (1979–
1989)
9. North Korea
10. North Vietnam (until
1976)
11. Laos (from 1975)
12. Mozambique
13. Nicaragua (1979–1990)
14. Somalia (until 1977)
15. South Vietnam (1975–
1976)
16. South Yemen
17. Yugoslavia (until 1948)

7. The Socialist Bloc or Second World
• USSR ≠ Socialist Bloc.
• Not to be confused with USSR; these are east Europeans countries, which
showed allegiance to USSR and socialist/communist principles.
• USSR was the leader of the socialist bloc.
• Socialist bloc is the super set and USSR is the subset.
• Most of these countries were under Fascist rule during second world war, when
USSR liberated them, they came under USSR control.
• Warsaw pact was the military alliance which kept the socialist group together.
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8. Problems with USSR
1.Bureaucratic and authoritarian system.
2.Lack of democracy.
3.Lack of freedom of speech.
4.One party system (communist) – unaccountable to the people.
5.Dominance of Russia; neglect of the interests of other republics.
6.High expenditure on defense, low on infrastructure and technology.
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9. Second cold war (1979 – 1985)
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1. Reagan went all out against USSR by supporting
insurgencies.
2. US increased military, diplomatic and economic
pressure on USSR when it was already suffering
economically.

10. Soviet war in Afghanistan
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1. Soviet suffered 15000 dead.
2. 1988 accord signed with USA, Pakistan
and Afghanistan to withdraw troops.
3. Withdrawal completed by 15 Feb 1989

11. Reagan and Thatcher
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1. "My idea of American policy toward the
Soviet Union is simple, and some would
say simplistic," said Ronald Reagan. "It is
this: We win and they lose.”
2. Margaret Thatcher denounced Soviet
Union and its ideology.
3. CIA encouraged and facilitated Pakistan’s
ISI to carry out Jihad against Soviet.

12. Polish solidarity movement and martial law
• Pope John Paul II provided anti-communist stimulus in 1979.
• Solidarity, a polish trade union, was formed in 1980.
• Its membership reached 10 million and it was not communist
controlled.
• Carried out strikes for economic and political reforms, free elections
etc.
• Martial law imposed on Poland as USSR declined military
intervention.
• Reagan imposed sanctions on Poland.
• Solidarity legalised in 1989 with government agreeing to its demands.
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13. Economic issues, Soviet and US military
confrontations
• USSR surpassed USA in military arsenal in 1980s.
• US missiles installed in Europe.
• USSR response declined due to heavy economic costs.
• Saudi increased oil production, which hurt USSR as its revenue was based on
oil.
• USSR shot down Korean flight 007
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14. Gorbachev reforms – Perestroika and Glasnost
• Gorbachev identified the economic and political problems of USSR, and
started a series of reforms, with the intention to revive economy.
• This was a deviation from the communist policies, and was more closely
associated with the market economy.
• Many communist leaders in USSR opposed reforms initiated by
Gorbachev.
• Perestroika means restructuring. It allowed private ownership, eased
foreign investment and relaxed production quota.
• Glasnost means openness. It was a step towards democracy.
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15. Revolutions of 1989
• It is called Autumn of Nations.
• Romania threw the communism violently.
• Tiananmen Square protest in China brought negative reviews for USSR.
• East Germany, Poland, Hungary and Czechoslovakia gained freedom.
15

16. Fall of Berlin wall and German unification
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1. The Berlin Wall was a guarded concrete barrier
that physically and ideologically divided Berlin
from 1961 to 1989.
2. The Wall cut off West Berlin from surrounding
East Germany, including East Berlin.
3. The fall unified the East and West Germany.

17. 1991 August Coup
17
1. It was done to take control from Gorbachev.
2. He was put under house arrest.
3. His resign was requested, he refused.
4. USA supported Gorbachev and opposed the Coup.
5. Yeltsin broke the coup and emerged as the successor.
6. This marked the death of USSR.

18. Dissolution of Soviet Union and The
Commonwealth of Independent States.
• USSR dissolved in 1991.
• Russia, Ukraine and Belarus decided for form CIS as an alternate union.
• It was aimed to act as a medium of dialogue between states.
• They invited others to join the CIS.
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19. Consequences of the disintegration of the USSR
• The fall of second world.
• The period marked the end of many communist regimes in response to mass
protests.
• End of cold war: End of arms race, end of ideological confrontations.
• Change in power equations: Unipolar world, capitalist ideology, IMF, World Bank
etc.
• Emergence of new countries and new alliances – Eg: Baltic countries aligned with
NATO.
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20. Summary
• The weakness of the economy was the major cause of dissatisfaction among
the people in USSR. There was sever shortage of consumer items. The reason
for economics weakness were the following.
1.Huge military spending.
2.Maintenance of satellite states in Easter Europe.
3.Maintenance of the Central Asian Republics within the USSR.
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21. Summary
• The communist party regime (single party rule) for around 70 years turned
authoritarian.
• There was widespread corruption, nepotism and lack of transparency.
• Gorbachev’s decision to allow elections with a multi-party system and create a
presidency for the Soviet Union began a slow process of democratization that
eventually destabilized Communist control and contributed to the collapse of
the Soviet Union.
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22. Summary
• Once people started to enjoy freedom under Micheal Gorbachev’s reforms,
they demanded more.
• The demand grew into a big force which turned difficult to control.
• The people wanted to catch up with the west quickly.
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23. Summary
• Rise of nationalism among countries like Russia, Baltic republics (Estonia,
Latvia, Lithuania), Ukraine, Georgia etc. is the most important and immediate
cause of disintegration of the USSR.
• The national feeling was strong among the more prosperous areas in USSR
and not in Central Asian republics.
• Ordinary people among prosperous republics didn’t like to pay big price to uplift
the backward Central Asian republics.
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References

26. The End!
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