By Frank B. Tipton, Robert Aldrich
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Extra info for An Economic and Social History of Europe, 1890–1939
The necessary foreign loans were paid for by exports of grain and petroleum products and by heavy taxes levied on the peasantry, and Russian maintained a consistently positive balance of payments. The government's programme achieved impressive results during the 1890s, with rapid increases in industrial output and employment. However, the boom suddenly slowed around 1900, and industrial production stagnated until 1908. The economic crises of 1901 and 1907 both affected Russian output, as did the war with Japan in 1904-5 and the subsequent revolution.
Where the share of agriculture in the economy remained high, notably in parts of the Netherlands, the expanding industrial sector focused on food processing, primarily for export markets. If the Low Countries seemed obvious candidates for economic development, Switzerland looked unpromising in the extreme. Switzerland possessed no coal and had a mountainous terrain, which reduced agricultural productivity and increased the cost of internal communications. Nevertheless a machinery industry had growh up to serve traditional manufacturing export branches such as clocks and watches, and the railway system provided further impetus.
The remaining areas of northern Europe found their possibilities for development affected by political dependence as well as by social and ethnic conflicts. Norway only became fully independent from Sweden in 1905. Finland, in theory enjoying a certain degree of autonomy within the Russian empire, suffered under an aggressive Russification campaign begun in 1899, and large agricultural estates continued to dominate the economy. In Estonia, Latvia and Lithuania, all Russian possessions, the large agricultural estates, active commercial life and beginning industrialisation were controlled by a minority of ethnic Germans who often did not speak the language of the majority of the population, a situation which had significant effects when the three states achieved independence following the First World War.