The economic problems Soviet Union faced before the Gorbachev era were rampant corruption in forms of bribery due to the shortage of goods and services in the open market. Theft of state owned property was carried out secretly in collaboration with the forces. In addition, corrupt deals by the communist leaders in high-level employment were largely practiced and no criminal charges were pressed against them. In addition the cost of maintaining, a big force due to the cold war constant attacks of their enemies added to the economic problems. This led to squandering of the natural resources like oil, land and gas.
The political problems facing Soviet Union before the Gorbachev era were the suffocating bureaucratic command systems. The communist party was the only party that participated in elections with single candidacy. This party was controlled by hard liners and dictators who were opposed to reforms. These hard liners had intervened using the soviet military in any attempt of reform. They had stormed countries like Poland, Hungary and Czechoslovakia when they attempted to elect a non communist government to head their legislature (U.S. history, 2011). However, the government had half-heartedly attempted to introduce reforms, but filed one after the other.
Gorbachev brought about economic reforms in the land sector when the residents were given land to farm and freedom of the producers were signed to law. This gave the enterprise the freedom to determine the output level depending on the demand and competition in the market. In addition, this law enabled the enterprises to manage its own operations because the mandate was taken away from the ministries and delegated to the workers’ elected collectives. Another economic reform was the law on cooperatives that gave rise to privatization of businesses in the manufacturing, service and foreign trade sectors. Under the Soviet Union’s foreign sector, Gorbachev eliminated the trade ministry monopoly that it held over foreign trade operations. It allowed other ministries to conduct direct foreign trade in their dockets rather than through the bureaucratic ministry of trade. It also permitted individual state enterprises, local and regional organizations to involve themselves with the foreign trade foreigners were allowed to invest in Soviet Union through joint ventures with the cooperatives, soviet ministries and state enterprises.