Whenever these consumer goods would become available in markets, consumers had to stand in long lines to be able to buy them. The decreasing standard of living also had an effect on the collapse of the Soviet Union.
After the collapse of the Soviet Union in 1991 and collapse of Russia's controlled economy, a new Russian Federation was created under president Boris Yeltsin in 1991. The Russian Federation had multiple economic reforms, including privatization and market and trade liberalization, due to the collapse of communism. Russia followed the lead of Bolivia and chose 'shock therapy' to shake off the economic inactiveness that was caused by the transition from communism to the capitalist system. Characteristics of shock therapy include the ending of price controls, the privatization of publicly-owned entities and trade liberalization. It is a strategy that involves moving quickly to eliminate the old system and to make a new one. Shock therapy is intended to cure economic matters such as hyperinflation, shortages and other effects of market controls in order to start economic production, reduce unemployment and improve living standards. This new reform didn't work exactly as planned, but things gradually got better. Though the economy is much more stable compared to the early 1990's, inflation still.
GDP Changes from 1970-2010 Remains an Issue for Russia.
Transition to a Market Economy (1991–1998).
Following the collapse of the Soviet Union, Russia had gone through an enormous transformation, moving from a centrally planned economy to a globally unified market economy. Yeltsin's program of market-oriented reform came to be known as a type of shock therapy. The result was disastrous, with the GDP falling by more than 40% by 1998, hyperinflation which removed personal savings, and caused crime and poverty to spread rapidly. The majority of state projects were privatized among great controversy and later became owned by insiders for far less than they were worth.
