Perestroika meaning “restructuring”, aimed to change the economy and government. The policy introduced capitalist features, including private businesses. Military expenditure was reduced to increase spending for production of daily necessities. Leaders who were more receptive to new ideas were introduced to the government.
Inflation surged due to the increase in price of goods and salaries. There was no strong and stable market to replace the centrally planned economy. Factories were unable to cope with changes as the workers were used to state control and were of poor standards and lacked funds to operate. The pace of the policy was too fast and private enterprises were unable to cope. Governmental officers were not in full support of the policy and were reluctant to help the private enterprises. Combining capitalist and communist systems was difficult since Gorbachev wanted to run the economy in a capitalist way but the government in a communist way. The policy caused more problems in the state as fewer basic goods became available, increase in unemployment as state-owned enterprises retrenched workers to cut costs. The policies caused resentment of the government and Gorbachev.

References:
http://upload.wikimedia.org/wikipedia/en/b/be/Perestroika.jpg
http://en.wikipedia.org/wiki/Perestroika
http://www.answers.com/topic/perestroika

Perestroika meaning “restructuring”, aimed to change the economy and government. The policy introduced capitalist features, including private businesses. Military expenditure was reduced to increase spending for production of daily necessities. Leaders who were more receptive to new ideas were introduced to the government.
Inflation surged due to the increase in price of goods and salaries. There was no strong and stable market to replace the centrally planned economy. Factories were unable to cope with changes as the workers were used to state control and were of poor standards and lacked funds to operate. The pace of the policy was too fast and private enterprises were unable to cope. Governmental officers were not in full support of the policy and were reluctant to help the private enterprises. Combining capitalist and communist systems was difficult since Gorbachev wanted to run the economy in a capitalist way but the government in a communist way. The policy caused more problems in the state as fewer basic goods became available, increase in unemployment as state-owned enterprises retrenched workers to cut costs. The policies caused resentment of the government and Gorbachev.

References:
http://upload.wikimedia.org/wikipedia/en/b/be/Perestroika.jpg
http://en.wikipedia.org/wiki/Perestroika
http://www.answers.com/topic/perestroika

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