Which factor hurt the Soviet economy in the 1980s? More spending on social welfare. Lower oil prices. High military spending. Poor agricultural production.
All of the factors listed contributed to the decline of the Soviet economy in the 1980s. However, it is worth noting that high military spending, poor agricultural production, and lower oil prices were the primary factors that significantly hampered the economy during this period.
1. High military spending: The Soviet Union exerted immense resources towards maintaining its military dominance during the Cold War. The substantial costs associated with defense industries, military infrastructure, and maintaining a large standing army strained the country's finances and diverted resources from other critical sectors.
2. Poor agricultural production: The Soviet Union faced chronic inefficiencies in its agricultural sector. Collective farming methods and centralized planning hindered productivity and innovation, leading to low crop yields and food shortages. The inability to meet domestic demand for food created reliance on costly imports.
3. Lower oil prices: The Soviet Union heavily relied on oil exports as a significant revenue source. However, in the 1980s, global oil prices plummeted, severely impacting the Soviet economy. The drop in oil prices reduced the country's export earnings and disrupted its trade balance, making it difficult to finance imports and pay off debts.
Though not listed as a key factor, it is worth mentioning that excessive spending on social welfare programs also played a part in straining the economy. Generous social benefits and subsidies placed substantial financial burdens on the state, contributing to budget deficits and inflation. However, the impact of social spending on the Soviet economy was less drastic compared to the three primary factors mentioned above.