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In the 1890's due to Tsar Nicholas II's Minister of Finance, Sergei Witte, There was a great economic boom, sometimes known as the 'great spurt'.

During this time Sergei Witte planned to expand Russia economically and raise it to a level of industrial growth where it could compete with western European powers such a Britain and Germany. Witte believed that he could do this by state capitalism. (Control of the economy by the government, using its central power and authority).

To achieve his intentions he negotiated large loans and investments from abroad. (However he also imposed heavy taxes at home). Witte also limited the import of foreign goods, setting up tariffs to help protect the home industry. He also put the Russian economy on gold standard, which encouraged other nations to invest in Russia. He also invited over experts from western nations who helped with industrial planning.

Wittes attempts were largely successful. Russia could raise capital on a large scale with which it's economy could flourish and expand. Capitalists did well from the economic boom.

Witte also improved and modernised the Russian railways which encouraged more exports and foreign trade. It would not be an exaggeration to describe this time period as a transport revolution.

However, this was all done not for the benefit for the Russian people. The tsar was only interested in Wittes economic reform as a better and more efficient industry would mean better and more guns and ships for the Russian army. Although Witte unintentionally helped the capitalists, the peasants were not taken into account and there situation actually got worse due to heavy taxes.

Although, Witte's achievements were undoubtedly great, Tsar Nicholas II never trusted him. This was because Nicholas was suspicious of any change and any modernisation of Russia. His mistrust and dislike of Witte was demonstrated in 1906 when Nicholas dismissed him after Witte had just finished successfully negotiating a large loan from France.

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15y ago

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