On March 1985, Mikhail Sergeyevich Gorbachev was elected general secretary of the Communist Party in Russia. Gorbachev inherited by his predecessors a stagnant economy and a "well fed" bureaucracy. Moreover, he was called to face a population that had learned to live in fear of the government and that didn't trust the government's promises and actions. As Gorbachev was gaining power quickly in the Party, he introduced some radical reforms that he believed would benefit the country.
His reform policies of "Perestroika", "Demokratizatsiya" and "Glasnost" meant restructuring, democratization and openness. The purpose of these reforms was to elevate the Soviet standard of living in order to regain the citizens" loyalty towards the Communist Party and to enable the rebirth of the Soviet economy and ideal. He also wanted let the Russian people participate in the modernization of the Soviet Union because he hoped that this way he would have a successful reform.
Perestroika implemented more profit motives for the people and the private ownership in agriculture. Farmers could now lease land from the government and keep the profits made from selling products grown in their land. Moreover, the reform encouraged private businesses and cooperatives- individuals could now own small businesses and hire workers. Perestroika also shut down many ministries and bureaucratic centers.
With these policies, Gorbachev planned to modernize Russia. In other words, he aimed for the country's westernization. With the fostering of private businesses, 5 million people were employed. After 1 April 1989, all enterprises were allowed to trade with foreign partners. This triggered the development of joint ventured companies of the West, such as PepsiCo, Kodak, Time-Warner Despite these reformations though, the Russian economy was heading to crisis. The Union's industry was heavily dependent on military orders, which by 1989 were remarkably reduced since the military action of Russia was reduced as well.