History of Kazakhstan: Crisis of 1991

Student name: Alima Muratova
Student number: 201019248
Course: History of Kazakhstan
Assignment: 1991 paper
The late 20th century (aka “dashing 1990s”) period is remarkable for significant structural changes in political, economic and social spheres of the Union of Soviet Socialist Republics (USSR). In 1991 the USSR collapses and new 15 independent republics are formed. The political system is totally destroyed, new governments being established lack stability; previously interdependent industries established in various republics of the USSR lose connections and production mostly stops resulting in extremely poor industrial development of states; economy experiences degradation resulting in the deterioration of general living conditions of citizens. As a consequence, society experiences feeling of uncertainty in the future, the anxiety grows among the population.
The unstable political and socio-economic situation in most former Soviet republics, and namely Kazakhstan, is expressed in economic crisis significantly affecting the whole state. Citizens are put in the conditions where one could survive relying only on own abilities and hoping for the best future. The ways in which people living in the period of crisis of 1990s experienced it could be classified in three main categories: unemployment, depreciation of money and provision scarcity. Each of them stem from certain changes happening in the system and society that time, and each of them lead to particular consequences also affecting the society.
The main economic force of the Soviet Union was working class, most population was involved in industrial and agricultural spheres of economy. Different factories of USSR were arranged throughout the whole Union: some manufacturing processes were segmented and allocated in various soviet republics. For example, several republics were engaged in the process of machine manufacturing, and various parts of the machine were produced in various parts of the USSR and then assembled into the final product. The interconnections between republics were tight and the industry was highly interdependent. Therefore, after the collapse of the Soviet Union this system was disintegrated and individual factories and plants in republics were not sufficient to produce final products – as a result, the industrial sector degraded and depreciated. The factories closed leaving people without work or even though some of the plants were operating the salary was not paid properly for months (Document 2, p.2, Document 8, p. 18). Similar situation were in the sector of education and health care: teachers and doctors were experiencing the highest level of competition in the labour market and there was a delay in the payment of wages, since previously there was a great number of specialists in these spheres and after the collapse the demand for their labour decreased (Document 6, p. 11). Therefore, one of the major stress factors for the people in post-Soviet states in the days of economic crisis was unemployment. People had no means to find money to buy necessities, rare people were able to find a job with proper salary, many people worked in several places to provide at least some amount of money for their families (Document 28, p. 58).
People who were less successful in getting a job got desperate, many of them were gradually sinking to the bottom of society: there was an increase of criminals and racketeers, alcohol and drug abusers, number of people committing suicide also increased contributing to the high mortality rate that time.
The collapse of soviet economy and formation of new and raw economic systems in former parts of USSR and independent republics have led to the depreciation of money. The value of old currency dropped drastically resulting in the sudden decline of capital of population. The fortunes people have been saving for decades became miserable in a moment: as one of thw witnesses of that time remembers, 1000 rubles that previously were enough to buy an apartment became only the money for ice cream for two. Moreover, the value of money was unstable, for example, in Kazakhstan, the exchange rate of rubles-tenge was fluctuating almost daily (Document 8, p.16, Document 17, p.32) as well as the prices for goods in stores. Additionally, as an individual giving interview says (Document 5, p.10) the talon system was introduced, talons served as a substitute of money for workers’ salaries and as a mean of obtaining necessities in the stores. All these led to the uncertainty emerging in the society: people did not know what to expect in the future, they did not feel safe (Document 14, p.26, etc). This situation could be considered as a factor of decreased birth rate: people were not confident in their possibilities to raise children.
Economic crisis mainly expressed in massive unemployment and money depreciation resulted in significant shrinkage of the whole market: post-Soviet republics’ citizens experienced critical scarcity of essential goods and services. Various factors like inflation, disintegration of previously tightly connected industries and depreciation of production industry contributed to the shortage of necessities on the shelves of the stores. As Rustem (Document 15, p. 26) and numerous other citizens experienced crisis (Document 26, p.52, Document 20, p.37) recall, population mainly lacked food, clothes, electricity and gas supply. Even though people had access to the limited amount of basic food products (such as bread, tea, milk, butter and sugar (Document 5, p.10)) per capita according to the talon system, numerous citizens were starving; malnutrition became a common phenomenon in the society. The stores get refilled occasionally, and as Botakoz, post-soviet Kazakhstani citizen remembers, people were spending hours in long queues without even knowing the product for which the line was formed (Document 31, p.67). This shows the growing anxiety in society which produced a huge socio-demographic impact as the increase in mortality rate, and reduced birth rate.
The economic crisis of the dawn of 1990s was the reality of the people living in post-Soviet republics, so they had to cope with it, to struggle for their existence and prosperity. There were several factors that determined the level of success with which people were coping with the situation. The identified factors of success comprise of smart investments and privatization accomplished by people in a right time, opening of new businesses in the spheres of extreme demand, existence of rations supply from rural areas, working at comparatively stable industries which products were always in demand and finally, existence of connections with higher structures and powerful friends and relatives.
One of the most significant factors contributing to the crisis overcoming success of the population was right business decision taken at a proper time. Some people showed great awareness of the opportunities opened by the political and economic chaos in the country: speculation, selling on the streets, sales of deficit goods, clothes, and basic necessities from cities to villages on extreme price, financial pyramids were happening all over the country (Document 28, p.58). Some people managed to get goods from China, Poland, Moscow or Bishkek (Document 7, p.13, Document 10, p.19) and sell them on streets, trading at the black market. Moreover, citizens who made smart investments, as for example Kim Faina’s family did in jewelry, or Beisen Karagulova’s husband in real estate or gold, both in the times of USSR and after its collapse, were more protected from the crisis and the changes it brought about ()Document 1, p.1). Furthermore, people who had an access to the information about the forthcoming events planned by government, particularly privatization, were committing frauds by buying-up the talons for privatization of industrial plants and other previously public institutions from general population, who were unaware of the need for these talons and were happy to sell as they thought useless sheet of paper for some money. As a result a single person could own a whole plant or factory - this was the way how many millionaires and well-off people of today made their fortune (Document 5, p.10, Document 8, p. 16, Document 30, p.68).
As unemployment was conventional in early 1990s and people were mainly lacking sufficient job placements, as there was no work in production and manufacturing industries, working in an sphere relatively stable and persistent to crisis was one of the factors enabling people to manage the economic problems of that time. For example, some people working in meat processing factory, oil industry or English-teaching education realm asserted that they have been living secure lives, and the crisis had not such a profound toll on them as it used to have on their acquaintances doing job in another spheres of life (Document 4, p.8, Document 1, p.1, Document 22, p.40, Document 31, p.67).
The aforementioned effect of having access to useful information (resulted in privatization available for a limited number of people) illustrates that people sharing kinship or friendship bonds with individuals from higher structures had more opportunities to live through the crisis period safely. Several witnesses of that time recall that “blat” and corruption took place in all spheres of life: people with powerful relatives got preferences in terms of getting jobs and housing (Document 23, p.42, Document 24, p.44, Document 25, p.46, Document 26, p.47). Furthermore, urban population who had some support from the rural regions had an advantage over those who had not such support. Since people in the villages were less-dependent on the range and availability of products, they were more secured from the hunger, and in most cases they helped their relatives from the cities by providing food from the own gardens and livestock. Thus having powerful and ‘useful’ relatives and friends was one of the factors of people’s ability to overcome the crisis.
Additionally, several interviewees stated that massive repatriations took place across the post-soviet space. Many Russians, Germans, Polish and other nations were returning to their motherlands, since they experienced pressure from the prevailing nations: for example, as Kharbi (Document 21, p.38) and Raya Wolovich (Document 1, p.1) describe, more preferences were given to the individuals of a indigenous nation. This could imply the formation and solidification of the notion of nation.
All aforementioned types of challenges through which people of collapsed Soviet Union had undergone in conjunction with the success determining factors initiated particular changes in societies of post-soviet republics. Firstly, due to the unstable situation in economy, high level of unemployment, inflation, uncertainty in the future, need to start profit-making ventures to survive human resources of nations depreciated. Numerous specialists of industries, teachers and doctors left their vocations and transferred to small businesses sector, contributing to the decreased amount of national cadres in educational and health care spheres, which in turn lead to the decrease of intellectual potential of the country. Moreover, many people experienced depression: some of them became criminals, some started to consume a lot of alcohol or to abuse drugs, and numerous individuals committed suicides, leading to the increased mortality rate in the society. Furthermore, as it was mentioned, birth rate indicator also went down. Additionally, repatriation of masses of people resulted in partial brain drain. All these factors lead to the depreciation of human resources both in quantity and quality.
The second consequence of the economic crisis of early 1990s is the emergence of the division of the society for rich and poor citizens. Since particular group of people developed and implemented various profitable business ideas, and another group has privatized large factories and plants and others were left with the option of making the profit for these two groups, the division for classes seems to be inevitable. It could be said that this process was a natural transition from the socialistic to capitalistic system.
The collapse of the USSR at the dawn of 1990s was a shocking event in the lives of the soviet citizens: the countries and their population were not ready for such drastic changes in every realm of the life, from political system to the everyday routine. This resulted in economic crisis of early 1990s making people undergo certain difficulties such as unemployment, money depreciation and provision scarcity leading to various social changes. These changes comprise depreciation of human resources and division of the society for classes. These changes are expressed in the society by sinking of less successful workers to the bottom of the society by becoming criminals, alcoholics, drug addicts, or even self-murderers; anxiety in society, hunger, increased poverty and mortality rate, decrease in birth rate also illustrate the details of the aforementioned changes. However, some people managed to cope with the crisis and even use it for the benefit. Generally, these are people who made intelligent investments and privatization in a proper time, those who opened small but demanded businesses in the time of chaos in the market. Additionally, individuals working in comparatively stable industries from the Soviet times were successful at being employed and getting systematically paid, thus feeling less stress put by crisis in a country. Moreover, kinship and friendship relations between people also had a particular effect on people’s success with crisis overcoming. Citizens of rural areas and those who have relatives living in villages were supported by livestock being less dependent on the food lack in the shops. Furthermore, those who had some connections to the above standing structures and powerful relatives and friends tend to be more successful by being more informed of forthcoming issues and events such as, for example, privatization, or by being supported by getting preferences in terms of living buildings access and job placement. Thus, the USSR collapse followed by economic crisis brought about drastic changes in social and economic structure of independent states and determined the future of a republic with respect to its potential and strength of human resources.