Khrushchev's Economy - Industry

Industry


The Seven-year-plan : Light industry in January 1959


The plan was designed to boost agriculture by investing in light industry. He hoped that more chemical production would lead to better fertilisers and therefore increased production of crops as well as synthetic fibres. He thought that chemical production through light industry would encourage growth in the 2 sections of the economy. He believe that further investment in heavy industry was unnecessary.


Production of chemicals ad consumer goods increased between 1959 and 1965.There was a 60% increased production of consumer goods, which is 5% below Khrushchev's target. 


However, the reforms were often counterproductive or so short that they did not have time to work.


* In Feb 1962 Khrushchev divided the Party in two; one half was responsible for agriculture and the other half for industry. These reforms were unpopular and took place in the middle of the 7 year plan.
* Khrushchev changed targets of the Plan in 1962 to more ambitious goals.
* Factories produced light fittings that were too heavy to hang on the ceiling.


Military spending:


The economy did not produce enough wealth to continue high levels of military spending and improve living standards. Military spending fell from 12% of GDP in 1955 to 9% in  1958. However, in 1962 Khrushchev increased military spending again due to series o nuclear stand-offs between Soviet Union and USA. This means that by 1962, military spending was around 11%.  Increased military spending led to a reduction in economic growth.


Khrushchev's vision:


In 1962, he stated that the Soviet Union would achieve Communism by 1980, at which stage housing, transport and food would be all available freely, and consumer goods would be cheap and widely available.