By Tim Goodwin

Nizhny Novgorod.
The name doesn't exactly roll off your tongue as one of the 500 cities in the world with a million plus population. Maybe even its communist era name of Gorky doesn't strike you, but this city of 1.5 million people on Europe's longest river, the Volga, in the heart of European Russia is this country's third largest city, a lesser cousin to the 10 million living in Moscow and the five million in St. Petersburg.

Unlike them, Nizhny Novgorod was a closed city when communists ruled, home to much of Russia's defense research and industry. Submarines, aircraft and electronic components were produced here, and nuclear research carried out. Foreigners were prohibited, phone lines poor, and the travel of citizens employed in defense industries even more circumscribed than other Russians. Nuclear physicist and Nobel Prize for Peace recipient Andrei Sakharov, father of the Soviet Union's atomic bomb, and his wife, human rights activist Elena Bonner, were exiled here. And somewhere in America there was a nuclear warhead with the city's name on it. Maybe there still is.

What a difference a decade can make, or even half a decade. Only 10 years ago Mikhail Gorbachev was calling for peristroika, only five that Nizhny Novgorod opened its doors to the world and reclaimed its historic name. And only a year ago that Nizhny Novgorod held the first popular elections in its 775 year history.

And yet today, Nizhny Novgorod is often called the "capital of reforms" in Russia, i.e. capitalism. It was here the first auctions of state industry were held, state stores sold to their employees, agricultural land privatization begun, and it was in Nizhny Novgorod that the first bankruptcy in Russia was filed, a dubious but significant development towards a market economy.

There was a pre-Revolution saying in Russia that went "Moscow is Russia's soul, St. Petersburg its brain, and Nizhny Novgorod its pocketbook." Nizhny Novgorod enjoyed a century as Russia's market barometer before the Revolution, where goods from around the globe were traded and some world market prices set at its Yarmarka, or trade fair. It's a reputation the city is working hard to restore, beginning with its Yarmarka, a now-sparkling century old French Renaissance building in the shadow of a towering statue of Lenin, site of a week-long all country "Future of Russia" exhibition and extravaganza this September.

Much of the credit goes to the Nizhny Novgorod oblast's (state) 36-year-old governor Boris Nemtsov. Telegenic, athletic, well-spoken, the darling of reformists -- Nemtsov has become one of Russia's most prominent governors, at least partly by chance. Passing through Moscow in August 1991 during the abortive coup against Gorbachev, he saw the tanks in the streets and joined Yeltsin in his historic stand-off. He was rewarded a week later with an appointment as Yeltsin's presidential representative to the oblast, and then as governor that November. In December of last year, he was elected outright with some 60 percent of the vote.

Nemtsov was never a member of the Communist Party as were many regional and federal leaders in Russia today. A former physicist and disciple of Sakharov, he led a successful, local protest against construction of a nuclear heating plant near the city following Ukraine's Chernobyl disaster. He's a frequent speaker these days at global economic summits, and rare is a day that doesn't have at least one local newscast with him in it, or a newspaper without his picture. He knows how to charm constituents.

His high profile prompted some to suggest he run for president this year. Nemtsov wisely declined in a volatile election year. The future still calls, though many say his half-Jewish heritage would doom him in Russia. His overwhelming election a year ago amid Communist Party victories for federal Duma (parliament) seats from the oblast spawned a new political term -- the "Nemtsov Effect" -- something for which many incumbent governors are hoping as Russians go the polls to elect 52 of Russia's 89 administrative leaders this fall and winter and with it a seat in Russia's upper chamber, the Federation Council.

What's been good for Nemtsov has been good for Nizhny Novgorod, however. While Moscow has attracted the lion's share of foreign investment (more than $850 million in 1995) and oil producing regions a fat chunk, Nizhny Novgorod saw some $56 million in foreign investment pour into the region last year. In the transition to a market economy, as Russia comes to terms with itself, that's not pocket change. And though you might bemoan the globalization of still another spot in the world, anything that creates jobs in this economically torn society is welcome relief, especially when it turns the proverbial swords into ploughshares.

Coca-Cola and Pepsi head a list of global giants coming to Nizhny Novgorod. The Cola War combatants will invest some $150 million here between them over the next several years. Even this is dwarfed by a proposed $250 million deal currently in negotiation between Japan's Toyota and the automaker GAZ, the city's largest employer with some 120,000 workers. And in a sure sign of global acculturation, McDonald's recently announced they would open five outlets in Nizhny Novgorod in 1997, a measly $2 million investment.

Others have followed as well -- Daewoo, LG Electronics, Westdeutsche Landesbank and a host of others. There are rumors of Intel, Dupont and Honeywell, and interest from several global hotel chains. The German carrier Lufthansa now flies into Nizhny Novgorod. More than a 100 joint ventures between Russians and foreigners are registered here. And Nizhny Novgorod, an oblast of four million, is the center of the greater Volgo-Vyatsky region of some 14 million, the size of some European countries. It's not for humanitarian reasons they're here, though assistance organizations have come too, among them the Peace Corps, International Finance Corporation, Opportunity International, British KnowHow Fund, and Dutch, Swiss and German groups.

But there are no more empty shelves in Nizhny Novgorod's stores, as there were only a decade ago, when you needed a passport and ration card to shop in the store assigned to you and lines were long and even basic products sometimes scarce. One friend tells the story of how he would stand in line for hours once a month to get his ration of vodka, one bottle for each member of his family, regardless of age, as long as he presented their passports. And he didn't even drink then, but his father-in-law did and would visit only if their was vodka on the shelf. Vodka is Russia's apple pie.

Media is opening up. Private commercial television and radio stations compete with state stations for advertising dollars, newspapers are proliferous, and four service providers vie for Internet customers, though beyond email it's often an exercise in frustration trying to connect with the web, where poor lines can doom you to 2400 baud. Community access to media remains a foreign notion in a country still struggling with the concept of a free press.

Amazingly, this city seems smaller than my hometown of Grand Rapids, Michigan, yet boasts more than six times as many people. Maybe it's the lack of skyscrapers, the absence of single-family dwellings, or the 600 years it has on Grand Rapids. Nizhny Novgorod's extended skyline is dominated by sprawling blocks of apartment buildings, 8-to-12 story concrete and brick boxes, a Soviet achievement in monotony repeated in cities from St. Petersburg to Vladivostock across eight time zones. You begin then to get a sense of the 1.5 million here.

Fortunately, Nizhny Novgorod is saved, if not defined, by its past. Founded in 1221 as an outpost against invasions into Russia from the south and east, its most enduring legacy is its 16th century, brick Kremlin overlooking the junction of the Volga and Oka rivers, which still houses municipal and oblast government within its walls, not to mention a nice little bar in one of its many towers. Look riverward from its hillside grounds and the massive Alexander Nevsky Cathedral across the Oka River draws you, to the left the ornate Stroganoff Church. Churches are being reclaimed and restored all over Russia, their days as Soviet storage sheds over, their polished onion domes once more glistening golden in the sun. From its main gate along Nizhny Novgorod's walking street, Bolshaya Prokovka, runs a kilometer long pedestrian thoroughfare lined increasingly with handsomely restored 19th century stores and the pre-Czarist, castle-like Central Bank, all part of the new market culture where you can get almost anything you want from Levi's to Nikes.

Cultural life remains rich and affordable. Theatre, symphony, opera, ballet. museums abound. Writer Maxim Gorky, the city's communist era namesake, has two to himself, Sakharov another. Many buildings bear plaques denoting former famous Soviet inhabitants, though I still search for one that says V.I. Lenin conceived here. Trees and parks green the city in summers. Log buildings predating the Soviets, their filigreed window dressings an art for which the area was once famous, still punctuate streets, home these days to the communal apartments that still exist in Russia. And there is the emergence of a new Russian architecture, neither western nor eastern, but a melding of each. UNESCO designated Nizhny Novgorod as one of the 100 most significant cities, culturally and historically, in the world.

Ah yes, if it wasn't for all this, Nizhny Novgorod would be like a hundred other Soviet cities. But scrape away the surface, and Nizhny Novgorod is still in economic turmoil, albeit better than most. While cultural and educational literacy were Soviet hallmarks, they're suffering under the new order, as schools and cultural institutions too must adapt to the market system. Teachers, professors, scientists occupy the low rung of the economic ladder, no longer scions of the society, their status usurped by new Russian capitalists in their Mercedes and BMWs. And artists of every stripe are learning the meaning of struggle. Russia will be hard pressed to retain its stature in the arts and education. At the moment those institutions survive, born by a stubborn dedication of its workers. But how long?

Population is in limbo. An underfunded, deteriorating health care system, the Russian Diaspora, and economic hardship have led the population of Russia to actually decline, and Nizhny Novgorod's remains static. Yet this is the largest country in the world, twice the territory as the United States, with only half as many people. The ills that plague Russia, plague Nizhny Novgorod too.

Nor is Nizhny Novgorod a capitalist's paradise. Even the best of Russia is sometimes no better than the worst of the West when it comes to business. There were even rumors that the city would be closed again had the communists claimed the presidency this year. Talks of coups, Kremlin intrigues, Yeltsin's health, mafia contract killings (560 already this year by one account) all discourage foreign investment in Russia, as well as feed a growing disillusionment in democracy. Maybe things weren't so bad afterall in the old days. It's the darker side of capitalism, reminiscent of 1930s' America, exacerbated by draconian federal tax laws that turn otherwise honest small business folk into criminals, an obstinate bureaucracy that still makes getting anything done a chore, and a Soviet legacy where power and connections were the medium of exchange, not rubles.

Yet could it be otherwise? The Soviet Union couldn't continue as it had. America didn't defeat communism single-handedly either. Maybe the global economy did. The state socialism that passed for communism imploded on itself, under the weight of its own ideology, exhausted after 75 years of trying to catch up with the West militarily and economically, a hollow husk of once noble ideas, turned against individual initiative and creativity, and against efficiency and innovation driven by market demands, while the world economic system was going global. Russia had little choice, unless it was to remain an isolated, closed, command economy.

In the transition Russians traded the surety of the state for freedom -- freedom of thought, expression, the press, economics, but also for the freedom to fail. Foreigners have come, phone lines are improving and citizens of Nizhny Novgorod are free to travel anywhere they can afford to these days. No one said it would be easy, but who would have thought it this callous? Imagine your own life turned 180 degrees from everything you've known.

Andrey Sakharov called for a democratic socialism. Grigory Yavlinski, Russian economist, presidential candidate, head of the social democratic Yabloko (or apple) party, and mentor to Boris Nemtsov, called for a more humane minded reform in Russia, and I came here with hopes that Russia might find a middle way between the hard edge of capitalism and its stultifying Soviet system, more along the words of Martin Luther King, who said "This revolution of values must go beyond traditional capitalism and communism...The profit motive, when it is the sole basis of an economic system, encourages a cutthroat competition and selfish ambition that inspire men to be more I-centered than thou-centered. Equally, communism reduces men to a cog in the wheel of the state."

Some see a capitalist oligarchy developing in Russia, others claim it's only a stage through which the country must pass, but Nizhny Novgorod, for all its own significant, singular achievements, this city which I've come to love will forever be wedded to the development of the nation. For as goes Russia, so too will go Nizhny Novgorod.

He also produces a monthly economic digest on the region, available on the WWW at
http://www/inforis.ru/n-nov/nn-update/update.html

Previous articles about Nizhny Novgorod in Synapse are available at
../synapse34/goodwin.html or
../synapse31/goodwin.html

Return to the Index of Synapse 37, Fall 1996