What legacies of the Soviet period and the Soviet system have influenced Russia's path since 1991

 

The USSR legally ceased to exist on December 31, 1991. The new state called the Russian Federation, set off on the road to democracy and a market economy without any clear conception of how to complete such a transformation in the world's largest country. Upon independence, Russia faced economic collapse. The new Russian government not only had to deal with the consequences of the mistakes in the economic policy of the Gorbachev period, but it also had to find a way to transform the entire Russian economy. In 1991 alone, gross domestic product (GDP) dropped by about one-sixth, and the budget deficit was approximately one-fourth of GDP. The Gorbachev government had resorted to printing huge amounts of money to finance both the budget and the large subsidies to factories and on food at a time when the tax system was collapsing.

By 1991 few items essential for everyday life were available in traditional retail outlets. The entire system of goods distribution was on the verge of disintegration. The transformation of the command economy to a market based one was fraught with difficulties and had no historical precedent. Since the central command economy had existed in Russia for more than 70 years, the transition to a market economy proved more difficult for Russia than for the other countries of eastern Europe.