The results of ďshock therapyĒ were
controversial. Gaidar and his circle, the media who supported him
and the individuals who benefited from the reforms, appraised them
very positively. They pointed out that the release of prices brought
the country closer to a balance between supply and demand. Free
prices brought most basic goods back on the shelves, putting an end
to the omnipresent lines that were a major part of the consumerís
life in Soviet Russia.
mechanism was started. Despite the horrendous rate of inflation, the
rouble recovered its function as money, as
a means of circulation and payment, that it had nearly lost in the
Soviet economy. This helped to restore links between enterprises.
Without this, a complete stoppage of production would have been
institutions of a market economy have appeared with astonishing
speed. Until the end of Gorbachevís presidency in 1991, most forms
of private business were still illegal. Since then, Russia has seen
the rise of a vigorous financial services industry, with hundreds of
newly created commercial banks and investment funds.
transformation of the economy took place in the early 1990s, with
cuts in defense spending. Even as Russiaís manufacturing and
military industries lay paralyzed, the services sector experienced
remarkable growth, rising from one-third of the gross domestic
product in 1990 to nearly two-thirds in the late 1990s. For the
first time since Stalinís industrialization, the production of
services exceeded the production of goods. The reforms gained a
self-sustaining character. Powerful interests were now bound up with
the continued marketization of the economy.