Russias Economic Crisis

In November of 1997 markets fall worldwide,
marking the beginning of the worldwide economic recession.
On March 23, 1998 Yeltsin sacked his Prime Minister Viktor
Chernomyrdin and replaced him with not so well known
Kiriyenko, the energy minister to Viktor Chernomyrdin. May
12, 1998 coal workers strike over unpaid wages. They block
the Trans-Siberian railway. This turns foreign investors
off. Stock prices fall in the same month after the passing
of a law calling for the removal of all foreign investment
in Russia’s largest energy company. The IMF pulls back
aid, claiming that the government wasn’t doing enough to
collect taxes. On June 15, Russia asked for more aid from
the IMF to stave off financial collapse. After Yeltsin and
the Duma fail to compromise on an anti-crisis tax package,
property tax was raised. On August 14, Yeltsin reclaims
that the ruble will not be devaluated. Three days later
Yeltsin devaluated the currency to nine and a half ruble
per dollar. August 21, The Duma holds a special session,
calling Yeltsin to resign. All world markets down on the
news, investors fear of instability. August 23, Yeltsin
sacks the Kiriyenko, recalls Chernomyrdin, world markets
fall again on the news. Two days later, the ruble fell
forty percent, its worst in four years. Yeltsin suspends
ruble trading, the rubles officially at 7.9 per U.S.
dollar, yet U.S. Dollars on the streets of Moscow go for
up to 12 rubles. Later, that week Chernomyrdin was rejected
as the premier of Russia. Veteran Foreign Minister Yevgeny
Primakov is appointed Russia’s Prime Minister. Yeltsin’s
choice of the former spymaster and Middle East hand was
seen as the best hope of uniting hard-line Communists and
Reformers behind an emergency program to deal with an acute
financial crisis. These are the causes over one year which
led to the collapse of the world, Russ…


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