Question

The collapse of Soviet Union was followed by Shock Therapy. Which of the following statements is NOT correct about Shock Therapy?

Options

• The transition involved a breakup of the existing trade alliances among the countries of the Soviet bloc.

• Shock therapy involved a drastic change in the external orientation of these economies.

• FDI and free trade were to be the main engines.

• The Eastern capitalist states guided and controlled the development of the region.

Answer 1

The Eastern capitalist states guided and controlled the development of the region.

Explanation:

This statement is incorrect because the development of the region after shock therapy was not guided by Eastern capitalist states. Instead, the countries themselves adopted market-driven reforms under Western influence, often leading to economic turmoil.