Gorbachev came to power in the Soviet Union as a young reformer from the outside. He introduced the reforms of political freedom, known as glasnost, and economic restructuring or change, referred to as perestroika, designed to revitalize and strengthen the Soviet Union. At the same time, he made it known that Eastern European governments needed to change and that the Soviet Union military would not meddle in the internal affairs of their satellite states. As a result, Eastern European countries began to debate the need for change. However, both in Eastern Europe and the USSR, debates over change led unexpectedly to debates over the legitimacy of the entire system, even as some governments such as in East Germany refused to implement any reforms.

The outside world influenced events in the Soviet Union. The United States, under Reagan, increased military spending forcing the USSR to overspend. The technology of Western Europe–especially television–showed those in the East how far their living standards differed in a manner that no amount of propaganda could overcome.

Soviet Union was unwilling to keep subsidized the economies of the Eastern European countries. Therefore, many of the Eastern Europeans countries borrowed money from abroad in order to help guarantee employment and a certain standard of living for their people, which resulted in huge external debts that could not be repaid. Pollution, alcoholism and poor working conditions resulting in live expediencies actually following during the 1970s and early 1980s. The economies of these countries, along with the Soviet Union, suffered from over-planning, inefficiency, and a resistance to change that resulted in limited economic growth in the 1970s and 1980s. The only solution was to increase prices for consumer necessities, especially food, that people resented especially as their wages failed to grow. Simply, the radiant future that communist leaders promised in the 1920s and in the late 1940s was not to be realized. This prompted people to start demanding for change from the government and in an increasingly noisy manner.

Gorbachev’s Speech to the Supreme Soviet: The time has come when we can expect nothing from further instructions from above, when we must actively implement the adopted decisions everywhere: in every collective, in every city and village. Here a very important role belongs to the soviets, as genuine bodies of people’s rule.How do I imagine this role in practical terms? How do I see it being implemented today? First of all, revive a Leninist spirit and style in the soviets. Make them both people’s bodies and bodies of power, in the full sense of these words. Assertive, energetic, businesslike defenders of the interests of citizens. Powerful engines of the development of their villages, cities, districts, provinces and republics …In accordance with the decisions of the 19th Party Conference, the working out of draft laws of changes in and additions to the Constitution and on the election of USSR People’s Deputies is nearing completion. In the near future, these draft laws will be submitted for broad nationwide discussion, and then, in November, we intend to present them to the Supreme Soviet for its consideration. After these laws have been adopted, preparations will begin for elections to the country’s supreme body of power. The newly elected Congress of People’s Deputies will form a new structure of central state agencies. Then this work will be conducted in the republics and at the local level.

Boris Yeltsin achieved fame when he resigned from the Soviet Politburo in 1987, terming the pace of Gorbachev’s reforms as too slow. Subsequently, he emerged as the face of the opposition and was one of Gorbachev’s most powerful political opponents. He was elected in the first post-Soviet era election in 1991 and deposed in a coup by the communist hardliners and the military in August of the same year. Upon re-election in 1996, Yeltsin presided over the transition of the Soviet state from communism and socialism to capitalism. For those without political connections that allowed a few insiders to amass fortunes, the 1990s that witnessed the privatization of the Soviet state’s key economic sectors was a disastrous decade. Most people lost their savings. Many more lost their jobs as unemployment drastically increased while wages fell. The industrial output collapsed and levels of crime, especially organized crime, increased. The government under Yeltsin seemed powerless and unable to control the daily chaos. Before leaving office, Yeltsin picked Vladimir Putin to be his successor.

Figure 6: Russian Economic Growth Since 1989

In another example of the re-assertion of nationalism and the chaos following the collapse of communist rule, the Bosnian crisis broke out with the collapse of the communist Yugoslav state. Dividing up the state proved impossible and soon ethnic violence broke out. The Serbs quickly resorted to war under Slobodan Milosevic using much of the former Yugoslav army. The attacks against non-Serbs, especially Bosnians, resulted to a genocide, committed in the name of Serbian nationalism, and forced NATO and the UN to intervene.