From Russia with Mixed Emotions
by Tim Goodwin
So here we are in Russia, sitting in our three room flat in downtown Nizhny Novgorod, formerly Gorky in Soviet days, having a breakfast of Russian white cheese and black bread with homemade jam from a Russian dacha, orange juice from a Cypriot firm, bananas from South America, instant coffee from a German company and tea from Sri Lanka. For dinner, we're looking at chicken from the USA, local potatoes from the open market and maybe a bottle of Bulgarian wine.
On the streets these days, in this the third largest city in Russia, it seems anything and everything is for sale. You want Nike sportswear, just a block down the street; Reebok, a block the other way; perfumes from Paris, try that new store on the corner. Wrangler, Lee and Levis, it's in that store over there. At Christmas time, the line was so long at a local store selling foreign electronic goods and appliances that it stretched half-way down the block as guards at the door limited the number inside at any one time.
And even though this is Nizhny Novgorod, an oblast (or state) that's often held up as a model of economic reform, it's a scene played out in many larger cities across Russia.
Still, it's not just a foreign invasion. In the markets, Russians are giving new meaning to entrepreneurship. Here, folks sell everything from raisins, apricots, herbs and vegetables to butter, hog heads and cabbage. State and collective farmworkers sell bread and eggs from the back of their trucks, from tanker milk trucks the same. Babushkas stand on street corners hawking their knitted socks, afghans and mittens. An aging opera singer sells his voice for donations. Others sell former Soviet military medals, hats and watches from suitcases. Book sellers are everywhere. So are vendors selling rip-offs of popular Western audio and video tapes. Photographers offer pictures atop ponies, others a ride in a horse-drawn surrey. Gambling casinos sell dreams. And money exchanges sell dollars, Deutsch marks and Swedish krona for rubles, the surest way for Russians to hedge their savings against an inflation that sees their rubles devalued by double digit percentages monthly.
At every street, and even in designated outdoor malls, steel kiosks stand like military sentinels selling whatever products, Western and Russian, they can get their hands on.
Days of scarcity are a Soviet anachronism, and choice is the new Russians' credo as foreign companies and savvy new Russian ones willing to brave the uncertainties of this economic frontier rush in to answer the clamor for consumer goods long denied a product hungry populace. In the shadow of a five story statue of V.I. Lenin in the middle of a square once reserved for state functions, everyone unabashedly sells everything.
This is not Joe Stalin's Russia, or even Mikhail Gorbachev's. This is something entirely different, an economy in transition from what was once the most controlled economy in the world to what is still to be determined. Thank you Boris Yeltsin. It's hard to believe it was only a little more than three years ago that Yeltsin essentially decreed that anyone could sell anything anywhere anytime. His comrades took him to heart.
All this is quite a change from the days when your greatest currency was your authority. When there were no dollars to be had and little to spend your rubles on anyway; when everyone was guaranteed a job, and the basic necessities of survival provided, you traded in the only currency you wielded, and that was power, from the lowliest babushka controlling the entrance to a public restroom to the Communist Party apparatchik holding the key to your employment. Favors were repaid with favors. Today, more and more, money talks.
All this is quite remarkable in a country where the average reported monthly salary is only little more than $100, where bus drivers earn more than professors, where hard goods cost as much or more than they do in the states, where taxes on business profits exceed the profit, where it's easier, and a whole lot safer, to deal with the criminal element extorting protection money than your local tax authorities.
You do what you need to do as the social safety net that existed under the state is systematically shredded in the name of fiscal responsibility. Inflation, the International Monetary Fund intones, will only be addressed when government stops printing money to address its every need, like waging war in its breakaway republic of Chechnya, like guaranteeing a minimum wage and social services to those displaced by the changes.
I'm torn as I see this proud country at a crossroads. The trade-offs enroute to a market economy are painfully evident. Here, higher education was a given, and literacy almost 100 percent, but where soon government support will end. Here, culture was a fact of life, and opera, ballet, symphony, theatre and museums cost only token admission, a situation bound to change as these institutions are forced to pay their own way. Here, unemployment was official because the state provided jobs. Here, some semblance of health care was assured, but where now the mortality rate is increasing, the average length of life decreasing, and alcoholism, always a problem, is worsening. Here, staples and foodstuffs are still measured out of bins into home brought bags, and prepackaging was a novelty, but likely soon to become a new pollution problem. Here, after 75 years of Soviet authoritarianism, old folkways are just beginning to be rediscovered, only to face an onslaught of things Western seen daily on television and in magazines.
But here too, the flaws of state socialism also were painfully evident, where party membership meant more than individual ability, where initiative went unrewarded, where there was no incentive to become efficient, where industrial pollution was simply a price of trying to keep up with the West, where real needs bore little relation to production as long as quotas were statistically met and government credits kept coming. And where they'll never be able to resume their place in the global community, unless they do, in fact, fall into line with the rest of the world in pell mell pursuit of the globalization of the economy.
Privatized former state industries are learning what it means to compete, what the real bottom line is without government credits to prop them up. The picture is not necessarily pretty, as workers are displaced and social services cut. Bankruptcy may be a blessing, as former party functionaries controlling those industries are displaced by a younger, more managerial elite, which understands business in a capitalist world.
This is not Adam Smith's favorite fantasy, however. The obstacles to a market economy are promethian in this country where the laws are still being written to determine such things as taxation, contracts, and private property. If anything, it's still only capitalism with a Soviet mentality, one where blat (or connections) still determine your chances at success. And business is reviled by many, who see wealth as a crime, who see the disappearance of the Soviet empire and wonder what happened to their country in this new world. Gorbachev is a dirty word to most. Yeltsin is fast becoming one.
In the midst of such chaos, it should have been an opportunity to remake society along terms of a green economy, educated by the lessons of their past, enriched by those of their Western models. Many elements already exist, evidenced everyday in the marketplace and a new breed of small scale entrepreneurs. But here the carrot of western aid, the demands of a global economy, its own existing industrial infrastructure, and the models held up as examples seem likely only to remake this country into something resembling the West.
Even those reforms are far from certain, however. Most Russians' material lives are worse today than they were under the Soviets. The trickle-down drops of supply-side economics have yet to reach the majority of Russians, though a middle class is beginning to emerge.
Legislative elections coming up this December will say a lot about the mood of an electorate that has little faith in politics anyway, capitalist or communist. Another more important test will come in June 1996, when presidential elections are held in what will probably be a referendum on reforms, a return to the past, or some other, maybe fascist, course.
It was 10 years ago this month that Mikhail Gorbachev launched perestroika, only four since Boris Yeltsin stood defiantly atop a Soviet Army tank, and less than two since the last remnants of Soviet orthodoxy fell in a hail of bullets at the Russian White House -- little time really for any nation in the throes of chaos to see its future. And certainly for now, still too early to call.
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