Mikhail Gorbachev and his team believed that a key reason for the poor performance of the Soviet economy lies in the issue of ownership, and the main task of economic reforms during perestroika was, as the Soviet leadership put it, "denationalization and demonopolization of the economy and the development of enterprise and competition".
[1] In addition to state enterprises, "промысловая кооперация", i.e., production cooperatives, which comprised small producers, artisans and craftsmen, existed until the mid-1960s.
These were liquidated and their enterprises, if any, were transferred to state ownership by the resolution of the Central Committee of the CPSU and the Council of Ministers of the USSR of April 14, 1956 "On the Reorganization of Production Cooperation" (О реорганизации промысловой кооперации).
The New Economic Policy (NEP) reintroduced private enterprises for small and medium-sized businesses,[4] while the state continued to control large industries, banks and foreign trade.
The "Law on Individual Labor Activity" capitalized on the experience of other states of Eastern Bloc, Poland and East Germany in particular, where small private enterprises demonstrated success.
[10] By that time, tens of thousands of people were officially registered to engage in economic activities, primarily in crafts and trade sectors.
The first officially registered international joint entity was Литтара-Воланпак, between Littara (of Lithuanian SSR) and Volánpack[15] (of the People's Republic of Hungary), which was engaged in packaging.