To understand what difficulties the new economy is experiencing in Russia, it is worth looking at statistics on industrial production in the nineties. The transition from a planned economy to an open market was painful enough for the economy and for the population. At the very beginning of the reforms, it was assumed that their successful implementation will allow building an efficient economy in the state using the most modern standards and technologies.
Short review: what difficulties is the new economy experiencing in Russia?
The period of the 90s among economists is considered to be the time of the so-called transformational recession. As a result of the change in the economic formation, a huge number of people found themselves without a permanent job, and the resources needed to engage in entrepreneurial activity fell into the hands of yesterday's party nomenclature, which had previously used them for enrichment.
However, not only the decline in production measures the difficulties experienced by the new economy in Russia at that time. The change in state structure was combined with a change in the moral guidelines of citizens of the former USSR.
Suddenly, the rule of law was replaced by a cult of power, which made building a business much more difficult. Pressure from corrupt officials, criminal communities, and dishonest competitors made effective business management difficult.
However, the devaluation of the ruble led to the fact that the demand for domestically produced goods began to exceed the demand for imported products. This allowed enterprises to significantly replenish working capital, which, along with a reduction in non-core expenditures, significantly improved the country's economy and created the basis for the construction of a new system.
Unfortunately, non-core assets included significant elements of social infrastructure, such as motels, children's summer camps and clinics. Not all enterprises managed to maintain at least partially social benefits for their employees.
Transition difficulties
Giving a brief answer on social studies - what difficulties is the new economy experiencing in Russia? - It is worth taking a look at neighboring countries that have less successfully overcome the dividing line between the socialist economy and the market.
All countries with economies in transition inevitably go through approximately the same stages of liberalization, privatization, stabilization, and structural adjustment, which is also impossible without the psychological adaptation of the population to new living conditions.
Particularly well illustrated by the problems of transition to a new economy can the state of military industry enterprises and related areas. All of them faced a severe crisis caused by a drop in the number of government orders. Huge efforts were required to re-equip the military facilities and adapt them to civilian needs. However, the reduction of a large number of jobs was inevitable.
The collapse of the labor market was also associated with the fact that in the planned economy there was the so-called hidden unemployment, which increased due to the creation of jobs that were useless for the economy.
The psychology of modern times
Building an effective market economy is impossible without the participation of a private owner who is interested in the result of his work and responsible to the consumer.
All the difficulties that the new economy has been experiencing in Russia in recent years are inextricably linked with neglect of private property and an underestimation of the role of the private owner. As a result of reforms in Russia, state capitalism with oligarchic features was built. Small and medium-sized businesses developed extremely slowly, and in the middle of the two thousandths they practically stopped their development.
All the difficulties that the new economy is experiencing in Russia now are associated with a huge number of frauds that took place during the period of privatization. Enterprises deliberately went bankrupt, workers lost stable income and left without compensation. Thus, we can conclude that the main beneficiaries were owners of large capital, while workers were in a losing position.