By 1991 the Soviet Union was collapsing, and two men shaped what came next: Mikhail Gorbachev, the Soviet leader trying to save communism, and Boris Yeltsin, the Russian leader who buried it.
Gorbachev had come to power in 1985 with two reforms: glasnost and perestroika. He wanted to fix the Soviet system, not destroy it.
Two rivals, two visions: Gorbachev was President of the USSR and wanted a reformed union of Soviet republics. Yeltsin was President of Russia (elected June 1991) and wanted a fully independent, market-based Russia. Their rivalry decided the USSR's fate.
In August 1991, hardline communists tried to stop reform with a coup, holding Gorbachev under house arrest. Yeltsin stood on a tank outside the Russian parliament in Moscow and rallied resistance. The coup collapsed within three days.
The failed coup destroyed Gorbachev's authority and made Yeltsin the real power in the country. One by one, Soviet republics declared independence.
December 8, 1991
Yeltsin meets the leaders of Ukraine and Belarus at Belavezha and signs an agreement declaring the USSR no longer exists.
December 21, 1991
Eleven former Soviet republics join the Commonwealth of Independent States (CIS), a loose association replacing the USSR.
December 25, 1991
Gorbachev resigns as Soviet president. The Soviet flag is lowered over the Kremlin for the last time.
Belavezha kills the USSR in name; Gorbachev's resignation makes it official.
How a source reveals this: A photograph of Yeltsin on the tank (August 1991) is USED by historians as evidence of his personal popularity and courage — but its CONTENT only shows one moment. A historian must ask what it leaves out: it doesn't show the confusion inside the coup plotters' own ranks, which also mattered.
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Once the USSR was gone, Yeltsin had to build a new political system almost from scratch. This was not smooth. Russia's old Soviet-era parliament (the Congress of People's Deputies) still existed, and it increasingly fought Yeltsin's reforms.
By September 1993, the disagreement had turned into a full constitutional crisis. Yeltsin dissolved parliament, which he had no clear constitutional power to do. Parliament refused to leave and declared Yeltsin removed from office.
October 1993 — tanks in Moscow: When armed protesters loyal to parliament tried to seize the Moscow TV centre, Yeltsin ordered the army to shell the parliament building (the White House) on 4 October 1993. Around 150 people died. Yeltsin had won, but by force, not by law.
Yeltsin used his victory to push through a new constitution. In a December 1993 referendum, voters approved it — though turnout and results were disputed by critics.
- A strong presidency — the president could appoint the prime minister, dissolve parliament, and rule by decree in some cases.
- A weaker parliament — the new two-chamber parliament (Duma and Federation Council) had less power to block the president than the old Congress had.
- Centralized authority — after the chaos of 1991–93, the constitution deliberately gave the presidency the power to act quickly without deadlock.
This mattered for the whole decade. The 1993 constitution is why Russia's presidents — Yeltsin, then Putin from 2000 — could push through unpopular economic reforms without needing parliament's constant approval.
Reading context for Q2: A source about the 1993 crisis written by a Yeltsin ally in 1994 will likely frame the shelling as a necessary defence of reform. A source from a parliamentary deputy will likely call it an illegal power grab. Same event, different context, different use.
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Alongside the political battle, Yeltsin's government was tearing up seventy years of communist economics. The plan was known as shock therapy, led by economist Yegor Gaidar from January 1992.
Old Soviet system
- State set all prices
- State owned all factories and land
- No real taxes on private business (little existed)
- Guaranteed jobs, low but stable living standards
Shock therapy (1992 onward)
- Prices freed to find their own level overnight
- Privatization — state firms sold or given to private owners
- New tax system built to fund the state without central planning
- Prices spiked, savings collapsed, unemployment rose
Freeing prices in January 1992 caused instant hyperinflation. People's life savings, built up over decades, became almost worthless within months.
Privatization ran in two big waves. From 1992, every citizen received a voucher worth 10,000 roubles to buy shares in state companies. In practice, most people sold their vouchers cheaply out of need, and a small number of well-connected buyers bought up huge stakes.
The rise of the oligarchs: Later in the 1990s, the 'loans-for-shares' scheme let a handful of bankers acquire Russia's most valuable industries (oil, metals) at low prices in exchange for loans to the cash-strapped government. This created the powerful business elite known as the oligarchs.
| Reform | Aim | Effect on ordinary Russians |
|---|---|---|
| Price liberalization (1992) | Let market forces set prices instead of the state | Hyperinflation; savings lost value almost overnight |
| Mass privatization vouchers (1992–94) | Spread ownership of state firms to all citizens | Most vouchers sold cheaply; wealth concentrated in few hands |
| Loans-for-shares (1995–96) | Raise government cash before the 1996 election | Created a small class of super-rich oligarchs |
| New tax system | Fund a state that no longer controlled the whole economy | Weak collection; many firms and individuals avoided paying |
By 1998, weak tax collection and a fragile economy contributed to a financial crash: the rouble collapsed and the government defaulted on its debt. Shock therapy had built a market economy, but at a steep human cost.