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Russia: Witte and Accelerated Industrialization
Country Study > Chapter 1 > Historical Setting: Early History to 1917 > Transformation of Russia in the Nineteenth Century > Witte and Accelerated Industrialization

WITTE AND ACCELERATED INDUSTRIALIZATION


In the late 1800s, Russia's domestic backwardness and vulnerability in foreign affairs reached crisis proportions. At home a famine claimed a half-million lives in 1891, 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 Sergey Witte, the country's strong-willed minister of finance. Witte championed 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 imperialist logic displayed in the nineteenth century by other large countries with vast undeveloped territories such as the United States. In 1894 the accession of the pliable Nicholas II upon the death of Alexander III gave Witte and other powerful ministers the opportunity to dominate the government.

Witte's policies had mixed results. In spite of a severe economic 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. The state budget also more than doubled, absorbing some of the country's economic growth. Western historians differ as to the merits of Witte's reforms; some believe that domestic industry, which did not benefit from subsidies or contracts, suffered a setback. Most analysts agree that the Trans-Siberian Railroad (which was completed from Moscow to Vladivostok in 1904) 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.




Last Updated: July 1996


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Russia was first published in 1996. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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