Russi’s Economic Meltdown Russia’s Economic Crisis In November of 1997 markets fall worldwide, marking the beginning of the worldwide economic recession. On March 23, 1998 Yeltsin sacked his Prime Minister Viktor Chernomyrdin and replaced him with not so well known Kiriyenko, the energy minister to Viktor Chernomyrdin. May 12, 1998 coal workers strike over unpaid wages. They block the Trans-Siberian railway. This turns foreign investors off.
Stock prices fall in the same month after the passing of a law calling for the removal of all foreign investment in Russia’s largest energy company. The IMF pulls back aid, claiming that the government wasn’t doing enough to collect taxes. On June 15, Russia asked for more aid from the IMF to stave off financial collapse. After Yeltsin and the Duma fail to compromise on an anti-crisis tax package, property tax was raised. On August 14, Yeltsin reclaims that the ruble will not be devaluated. Three days later Yeltsin devaluated the currency to nine and a half ruble per dollar.
August 21, The Duma holds a special session, calling Yeltsin to resign. All world markets down on the news, investors fear of instability. August 23, Yeltsin sacks the Kiriyenko, recalls Chernomyrdin, world markets fall again on the news. Two days later, the ruble fell forty percent, its worst in four years. Yeltsin suspends ruble trading, the rubles officially at 7.9 per U.S. dollar, yet U.S. Dollars on the streets of Moscow go for up to 12 rubles.
Later, that week Chernomyrdin was rejected as the premier of Russia. Veteran Foreign Minister Yevgeny Primakov is appointed Russia’s Prime Minister. Yeltsin’s choice of the former spymaster and Middle East hand was seen as the best hope of uniting hard-line Communists and liberal Reformers behind an emergency program to deal with an acute financial crisis. These are the causes over one year which led to the collapse of the world, Russian, and American markets. Causing a downward spiral in the FTSE5000 (London), Nikkai (Tokyo), BOVESPA (Brazil), Hang Sang (Hong Kong) and various other markets in all countries.
In addition it caused potential investors to be cautious about the economic risks of investing in a previously bull market. Due to the increasingly global markets all countries were affected by this crisis in Russia. Current Events Essays.