Wittes Russian Economy

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What steps did Sergei propose to modernize Russian industry?

The situation and the economy was not very good in Russia. They were having lots of problems, like for example they had a population explosion, there were harvest, and famine, there was a bad system of land distribution, they did not have very good farming equipment, and many other things. Peasants were suffering a lot, but also every Russian. One of the most important facts in Alexander III’s and Nicholas II’s ruler ship, ways they’re idea of industrialization. In this ruler ship, the minister of finance from 18 to 10, was Sergei Witte.

Sergei Witte was a very important person in the Russian government. He was a very intelligent and necessary man. He realized that Russia’s key to success, was industrialization. Wittes economic policy promoted industrialization, and also had political and social consequences. First he started with the banks. They offered peasants loans to purchase land at low prices. He encouraged migration to sparsely populate areas like for example Siberia, because there was not enough space, and because population was growing too much. Other policies, and important facts he idealized as solutions were, first, export wheat, which was a something that had a lot of production, but peasants produced it, and they used it, in order to make bread, they’re main food source, this gave money to the government, not to the peasants, this shows that the government were not much concerned about their people. This was called, starvation exports. Another method he used, was a massive investment of foreign capital, specially France, Belgium, and Britain. The idea was them to invest in Russia . This capital would stimulate Russian industry and protect government, by creating employment, higher wages and cheaper goods. He also introduced protective tariffs, in order to guard Russian industries against international competition. He also made banks to give loans to peasants in order for them to produce. Wittes ideas were very modern and interest, and he was seen as a genius in economics at that times. His plans were interesting, but also had problems, and were not totally successful. Some the problems and difficulties his plans had were that industrialization occurred in large cities, were the minority of the people lived, so very small percentage of the population, who was mostly the higher class took advantage of this, the people getting benefits were the higher class, who worked in banks, and in the important industries, so finally the rich became richer and the poor became poorer.

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Wittes plans, were definitely useful and had many success. As a result, Russia got to industrialized, having the coal, petroleum, steel and iron to dominate in the market, and increase its production. He got a growth in St Petersburg , Moscow, and other regions. Foreign investments did rise, starting with metallurgy and mining at the top, and oil and banking coming after, which came from French, Britain, German and finally Americans, respectively. This countries saw Russia as a stable country, and that’s why they trust them. As everything not everything shines, it had its problems too, which have been already mentioned, but as a conclusion, he was succeeds, and help much with Russian economy, but did not knew how to deal with social problems, that’s why I think he was not absolutely brilliant, if he would have known how to deal with the population problem, and bring benefits to the poor people, who are the major percentage of a country, he would have been successful.

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