Witte's Attempts to Modernize

1890-1905
Russian Weakness:

• Agricultural inefficiency: medieval state of agricultural technology and division of land equated to the inefficiency of production. This was caused by the lack of investment put into agriculture and the prevention of innovation. 
• Russia quickly fell behind Britain and the USA in industrial output and understandably, their economy as well. 
• Complications in communications and transport: the vastness of Russia as a country hurt their communications and transport of materials. The lack of railways and the scattered nature of its major cities became a huge issue for Russia

Solutions of Sergei Witte:

• Sergei Witte: Russian Minister of Finance from 1892 to 1903. He was able to bring large changes to the economy
• Belief that rapid forced industrialization was the way to success. Industry would create an economically self dependent Russia
• Four goals: taxes on foreign goods to repel competition from the outside, using loans to attract foreign capital, Gold Standard raised to encourage foreign investment, squeezing resources from peasant class through high taxes, collection of surplus crops and low wages for the working class

Success and limitation of Witte's Policies:

• Foreign Investment: heavily invested in foreign economies from 200 million in 1890 to 900 million in ten years
• Industrial Output: Output quadrupled between 1890-1910
• Railways: railways improved from 7k in 1890 to 60k in 1905 in order to improve communications and transport
• Major advances occurred, but Russia was still far behind other European states. Railways was still insufficient. Where the railway improved, other forms such as roads still lacked behind. 
• Foreign capital meant regular interest payments that eequated to an annual 20% of government budget
• Discontentment among peasants due to the heavy grain and monetary taxation especially during times of famine. 
• Poor work and living conditions for industrial workers leading to revolts and a call for more political power for workers.

Summary: Overall, Witte's policies strengthened Russia in many areas. The railways would become useful by 1914 when World War 1 happened. The economy, industry and military experienced huge benefits. All this came at the cost of the working/peasant classes. They suffered because of Witte's policies and this created societal tension that became the grounds for mass uprisings