by Elena Zinchenko, May 2000


Planned economy is a very important feature in the economic policy of the Communist Party and Soviet state. The planning is usually based on the applications of the basic economic laws of socialism, which is the law of the planned (proportional) development of the socialist economy.

In the Soviet Union, including the Ukraine the planned economy was achieved through the long-term plans, which were supposed to solve fundamental tasks of socialist and communist construction. Each Five-Year plan corresponded to a definite stage in the construction of the new society and had its special basic economic and political tasks.

The first state plan was the GOELRO plan of electrification in 1920, which was designed for the countryís electrification over a period of 10 to 15 years. This plan was elaborated by Lenin and ratified by the 8th All-Russian Congress of Soviets on December 29th ,1920. The implementation of the plan was assisted by the inaguration of the New Economic Policy.

The GOELRO plan provided for the construction in the Ukraine of four district electric power stations, a considerable growth of the metallurgical, machine, chemical and other branches of industry and the construction of new railways, some of them electrified.[1] The fast restoration of Donbas was an important part of this plan. Russia provided Ukraine with equipment for the major industries and skilled workers, which played a significant role in successful implementation of the GOELRO plan.

Thanks to the aid from the fraternal republics and hard work of the Ukrainian working class the improvements in the Republicís industry were significant. All power stations were restored and enlarged. Electricity output increased almost 6-fold, surpassing the pre-war period.[2] In 1925-26 large-scale industry in the Ukraine attained 99% of the pre-war production level.[3] Most of the branches of the food industry and consumerís goods exceeded the pre-war production level. The annual growth of industry in the Ukraine was 46-70% in the period of 1921-25. The consumerís goods industry developed more rapidly up to 1923-24, but later the development of basic industry became more rapid.

 The share of the gross production of Ukrainian industry in the U.S.S.R. output increased from year to year, being 13.1% in 1921-22, 18.5% in 1922-23 and 21.6% in 1923-24.[4] Unemployment was reduced noticeably. The number of workers occupied in production increased in the Ukraine from 316,500 in 1921 to 570,600 in 1925-26.[5]

With time the socialist sector in the economy grew, while the capitalist elements were drawn out of industry. In 1925-26 the share of the socialist sector in the Ukraineís industry grew to 91%.The accomplishment of the GOELRO plan led the Ukrainian economy to its higher level. The Republic has become an industrialized state with the foundations of socialism.

[1]P. F.  Zhmachenko, Soviet Ukraine (Kiev, 1969), p.255.

[2] Y. Kondufor, A short history of the Ukraine (Kiev, 1986), p. 184.

[3] Ibid. , p.255

[4] Ibid.

[5] Ibid.


 Kondufor Y. A short history of the Ukraine (Kiev, 1986).

 Mace J. Communism and the Dilemmas of National Liberation (Cambridge, 1983).

  Zhmachenko P. Soviet Ukraine (Kiev, 1969).





OK Economics was designed and it is maintained by Oldrich Kyn.
To send me a message, please use one of the following addresses: ---

This website contains the following sections:

General  Economics:

Economic Systems:

Money and Banking:

Past students:

Czech Republic

Kyn’s Publications

 American education

free hit counters
Nutrisystem Diet Coupons