Soviet Union-Serge Witte and Accelerated Industrialization, 1891-1903

In the late 1800s, Russia's domestic backwardness and vulnerability in foreign affairs reached crisis proportions. A famine claiming a half-million lives in 1891 exemplified the domestic crisis, and activities by Japan and China near Russia's borders were perceived as threats from abroad. In reaction, the regime was forced to adopt the ambitious but costly economic programs of Sergei Witte, the country's strong-willed minister of finance. Witte championed a combination of foreign loans, conversion to the gold standard, heavy taxation of the peasantry, accelerated development of heavy industry, and a trans-Siberian railroad. These policies were designed to modernize the country, secure the Russian Far East, and give Russia a commanding position with which to exploit the resources of China's northern territories, Korea, and Siberia. This expansionist foreign policy was Russia's version of the imperialism so characteristic of the relations of advanced capitalist countries with weak and backward areas during the nineteenth century. The accession of the pliable Nicholas II in 1894 resulted in the domination of the government by Witte and other powerful ministers.

The results of Witte's policies were mixed. In spite of a severe depression at the end of the century, Russia's coal, iron, steel, and oil production tripled between 1890 and 1900. Railroad mileage almost doubled, giving Russia the most track of any nation other than the United States. Yet Russian grain production and exports failed to rise significantly, and imports grew faster than exports, although the latter subsequently rose. The state budget also more than doubled, absorbing some of the country's economic growth. Western historians have differed as to the merits of Witte's reforms, with some believing that many domestic industries, which did not benefit from subsidies or contracts, suffered a setback. Moreover, most analysts have agreed that the TransSiberian Railway and the ventures into Manchuria and Korea were economic losses for Russia and a drain on the treasury. Certainly the financial costs of his reforms contributed to Witte's dismissal as minister of finance in 1903.

Data as of May 1989