During the 1980s, in an attempt to reverse the stagnation of the Soviet economy, General Secretary Mikhail Gorbachev (1985-91) introduced policies of glasnost (openness) and perestroika (restructuring). These attempts at modernisation inadvertently released forces that by December 1991 fragmented the USSR into 15 independent republics. A decade later, Russia has yet to build a democratic political system and a strong market economy.
Serious problems persist. Russia remains heavily dependent on exports of commodities, leaving the country vulnerable to swings in world prices. The agricultural sector remains beset by uncertainty over land ownership rights, inhibiting investment and restructuring. The industrial base is increasingly dilapidated and must be replaced or modernised if the country is to achieve sustainable economic growth. The economic crisis of 1998 led to a 4% drop in GDP; inflation rose to 84%, unemployment reached 11.8% and real incomes fell by 40% from 1997 levels. GDP per capita was US$4,228 in 1998.
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