In March 1985, Mikhail Gorbachev became the General Secretary of the CPSU. Under him, a new group of officials and leaders started a process of changes in the politics and economy of the Soviet Union. They also tried to improve relationships with Western countries like the US.
At that time, the Soviet economy was doing okay but it was slower than its competitors' economies in the West. Also, the cost of maintaining the Soviet Union, as a superpower was huge. These costs included running a large military; running the KGB networks; and giving money to countries close to the Soviet Union. At the same time, the Soviet Union’s technological development had fallen behind. For example: many of its factories used out-of-date technologies and it had fallen behind in the use of information technology.
In view of these and other reasons, Gorbachev and his team started three important policies:
Since the time of Vladimir Lenin in 1920s, the people of the Soviet Union did not have any right to own personal property and business. The government owned almost everything. In 1988, the government permitted the people to own some types of businesses in the service sector, manufacturing, and foreign trade. A system of cooperative restaurants, shops, and manufacturers came into existence.
Glasnost gave a greater freedom of speech to the citizens and allowed them to criticise the government - something they had never been allowed to do. The government reduced censorship and control on publication. The government set free many political prisoners. In January 1987, Gorbachev started a process of democratization of Soviet politics. In June 1988, Gorbachev started a process to reduce the control of the CPSU on the different parts of the government.
In December 1988, the Supreme Soviet had approved the establishment of a Congress of People's Deputies, the Soviet Union's new legislative body. In March and April 1989, elections to the Congress of People’s Deputies took place. The members on 15th March 1990 elected Gorbachev as the first executive President of the Soviet Union.
Many steps taken by Gorbachev gave results different than the intended results. Thus the "perestroika" and "glasnost" intended to make the Soviet economy stronger resulted into something very different. Many factors and events combined and finally they resulted into the dissolution of the Soviet Union.
Under the policy of "glasnost" (political openness), the Soviet government and the Communist Party lost control over the media. A free media brought to notice of the public many bad aspects of the society and the economy of the Soviet Union. These bad aspects included poor housing, alcoholism, drug abuse, pollution, out-of-date technologies in many factories, and corruption. People also learnt of many crimes committed by Stalin. For example, they learnt about prisoners at Gulags, agreement with Adolf Hitler, and large massacres of Stalin opponents. Further, people also learnt details about such events as the ongoing Soviet war in Afghanistan and bad management of nuclear meltdown at Chernobyl (the Soviet Union didn't publicly admit to the meltdown until three days after it happened). In short, people learnt about the negative aspects of the Soviet life. People began to lose faith in their Soviet system and ideology of Communism.
By 1989, the Soviet government found it to be too difficult for the Soviet Union to keep its control over its Eastern European bloc and decided to let them choose their own futures. After the end of the Second World War, with the support of the Soviet Union, communist governments were ruling all these countries. The change in the policy of the Soviet Union resulted into fall of the communist governments in many such countries by 1990: in Bulgaria, Czechoslovakia, East Germany, Hungary, Poland and Romania.
Seeing all these developments, many "republics" of the Soviet Union wanted to become independent. The Glasnost policy also released long wanted nationalism in the "republics" that the Soviet government had suppressed and covered up. Some republics tried to become independent.
The leaders had thought that the policy of "perestroika" was a bold step to improve the economy. But, the steps were not very strong to improve the bad economic conditions of 1980s. Despite many changes, Gorbachev and his team had left many aspects of the Soviet economy unchanged. For example, price control, inconvertibility of the ruble, and government control over most means of production continued. By 1990 the economic situation had become worse. The examples include:
On 7th February 1990, the Central Committee of the CPSU was forced to loosen its control over power. At around the same time, different "republics" of the Soviet Union started to claim their right to become independent. They stopped following the laws of the central government of the Soviet Union. They also stopped paying taxes to the central authorities (of Moscow) of the Soviet Union. These weakened the Soviet authority and economy.
During a 1990 visit of Gorbachev to Vilnius, capital of Lithuania, about 250,000 persons protested in a public meeting. On 11th March 1990, leaders of Lithuania declared its independence from the Soviet Union. However, the Soviet central-government demanded Lithuania to give up its independence and sent the Soviet Army continued to keep many troops in Lithuania. The government said that it would have to follow the Soviet constitution if it wanted to leave. The Soviet Union also did economic blockade of Lithuania. Estonia and Latvia were also illegally taken by the Soviet Union in 1940. On 30th March 1990, the leaders of Estonia declared that the control of their country by the Soviet Union from 1940 was illegal. They also declared independence. The leaders of Latvia also started process of independence on 4th May 1990.
On 17th March 1991, people of the Soviet Union voted to keep the existing Soviet Union in a slightly changed form. The Baltic States (Lithuania, Estonia, Latvia), Armenia, Georgia and Moldova boycotted the voting. In each of the other nine "republics" of the Soviet Union, a majority of the voters supported the retention of the Soviet Union. In June 1991 an election took place in the Russian Republic of the Soviet Union. Boris Yeltsin got 57% of the vote. He was a critic of Mikhail Gorbachev. Gorbachev’s preferred candidate, former Premier Nikolai Ryzhkov, got only 16% of the vote.
The "republics" of the Soviet Union had agreed to sign on 20th August 1991, an agreement making them almost independent republics but part of a federation, with a common president, foreign policy and military. However, many persons disagreed, and they wanted a fast transition to market economy even if it meant dissolution of the Soviet Union. There were many others in the CPSU and the military of the Soviet Union who supported continuation of the Soviet Union.
On 19th August 1991, some senior leaders of the Soviet Union formed a "State Committee on the State Emergency." They prevented signing of the above-mentioned agreement on 20th August 1991. These leaders included Gorbachev’s vice president Gennadi Yanayev, prime minister Valentin Pavlov, defense minister Dmitriy Yazov, KGB chief Vladimir Kryuchkov, and many other senior officials. At that time Gorbachev was holidaying in Crimea). These officials put him under house arrest. They also issued orders banning all political activities and banned most newspapers.
This was like a coup. The organizers had expected popular support for their action. But, the people did not support them. Instead, they supported "White House" (Yeltsin's office), then the symbolic seat of Russian sovereignty. The organizers of the coup tried but failed to arrest Boris Yeltsin. After three days, on August 21, the coup failed. The authorities detained the organizers. Gorbachev returned as president of the Soviet Union. However, Gorbachev's real powers had reduced.