Snapshots of Russia - June 1994
Inflation and the Exchange Rate since 1989
The rouble, which (like the Argentine peso) only a few years ago had a spurious official parity with the U.S. dollar, is now worth 1,900 times LESS. That is about 1,400 to the Australian dollar, but don't try to change the latter over there in Moscow - and if you wish to avoid paying a 20% tax on foreign currency on leaving Russia, DO ask for the appropriate form to declare ALL your foreign currency and traveller's cheques on ARRIVAL.
In 1989, a paperback book cost one and a half roubles, and a Saint Petersburg [Leningrad, as was] Underground railway ticket cost 5 kopecks (i.e. one twentieth of the over-protected Russian rouble). In 1994, the book costs 3,000 roubles and the overcrowded underground (where it is an advantage to be a rugby player) costs 150 roubles. With medicines, the inflation is much worse: a strip of aspirins that used to cost 5 kopecks now fetches the astronomical sum of 5,000 roubles.
Companies as well as individuals are suffering. The Saint Petersburg NEVA NEWS (in English) reports that the nuclear Power Station at Sosnovsky Bor is virtually bankrupt and can no longer pay wages or buy nuclear fuel.
Conversely, the mafia and criminal gangs are flourishing and hold great power. The night in Moscow and St. Petersburg is a dangerous time to be out of doors, especially for foreign tourists.
Wages and Salaries
These have tended to move up very slowly while prices have spiralled out of control. The catastrophic fall in real income and buying power is seen by very many Russians as being entirely due to the Yeltsin-Gaidar special economic measures of 1992.
Teachers and factory workers now earn approximately one hundred thousand roubles ($70) per month. Even though husband and wife work, which is usual, their combined incomes are now worth little, which explains why the entrances to Underground Stations are lined with people holding up all sorts of food and clothing for sale. Some even offer medicines. At the approach of a policeman, they melt away, only to re-form seconds later on the same steps in the hope of a sale.
The situation is obviously critical. Russians are shocked, resentful and angry. As they go to work on hopelessly overcrowded, antiquated public transport, they know that today, because of the inexorable devaluation of the rouble, they will earn a little less than yesterday. They are barely surviving, but the several new McDonalds fast food shops in Moscow are always crowded.
Along some main streets in Moscow and St. Petersburg, and particularly in the vicinity of suburban Underground stations, lines of rectangular sales kiosks have sprouted up in the past two years of capitalism, The kiosks resemble shipping containers (with windows) and they offer cigarettes, liquor, soft drinks and other small items. The liquor is said to be adulterated, at best with tea, at worst with more dubious substances.
The kiosks belong to the new entrepreneurs. Though it is said that some are financed by 'dirty money'. Like other ares of the new Russian commercial life, the kiosks are subject to mafia control, or protection.
Ivan's parents are desperate. The nine-year old's illness has just been diagnosed as a kidney disease, but there is no suitable treatment available in Russia. Even if there were, it would no longer be available to Ivan, since medicine is no longer provided free of charge, except to children under 3. Valentina, a Moscow pediatrician, says that when she prescribes antibiotics in her children's clinic, the patients plead with her, with tears in their eyes, to certify that the child is under three years of age. Otherwise, they would not be able to buy the medicine. Sometimes Valentina takes the professional risk and signs the necessary form ...
1. Russian sociological surveys indicate that an alarmingly high percentage of 70% of the population are dissatisfied with their present living conditions And they believe that they are now living below the poverty line. Certainly family meals seem very basic. To make matters worse, for the few privileged people, who had savings before, their real value was also wiped out in 1991 when cumulative inflation in Russia reached 1,000%.
2. St Peterburg this month stages an exhibition of works of Soviet propaganda produced between 1940 and 1950: posters, paintings, official portraits, sculpture, crockery, songs, etc.). The aim, presumably, was to further discredit the Soviet era and provoke liberating sniggers and ridicule from the public. But a Russian journalist who studied the Visitors' Book at the Exhibition has found that a majority of the written comments express GRATITUDE for the welcome reminders of the 'good old days'!
3. For those Russians who are prospering under the "changes", the motto of a young Moscow tourism entrepreneur, with a big car and an admiring subordinate ex-KGB Colonel old enough to be his father, seems to be very apt: "If there's money around, grab it!"
4.Those (many) who long for the return of the Soviet Union, and the Ancien Regime, seem convinced that its break-up was basically due to Western influence. I met an ex-Professor, who had prospered under the Communist years and enjoyed a high salary and a comfortable apartment and perks like holidays at Black Sea resorts. He is now very much OUT of favour and is feeling the economic pinch, like most of his compatriots. His sincere opinion was that "we feel that the Soviet Union still exists in our hearts. The people wanted to keep it, but the leadership didn't." Incidentally, he also strongly advocates as a means of national salvation the immediate reunification of Russia, Ukraine, Belarus and Kazakhstan (because of the latter's large numbers of ethnic Russian citizens) though he could happily face a future without the troublesome "Southern Republics" (especially strife-torn Georgia - and later Chechnya). Many Russians agree with him when he states:
- Crimea is Russian.
- "Hands off the Soviet Union!"
- Any disaster suffered by Russia will seriously affect the whole world, particularly the West.
The Zhirinovsky Factor
The inflammatory populist leader of the so-called 'Liberal Democratic Party of Russia (LDPR) - whose Christian name, Vladimir, means 'Master of the World' - appeals to many disgruntled Russians. His outspoken, even outrageous and crude, pronouncements, echo their own unspoken concerns and wishes. In his broadsheet, "Zhirinovsky's Pravda" (Truth), he sets out, among other aims, and principles of his party, the following:
"LDPR - The Party which oppposes the shock therapy which is being carried out, at the behest of the I.M.F., controlled by the U.S.A. and Japan. It is against the anti-national government, which is destroying the State Sector and turning Russia into a raw material supply for Western Capital[ism]."
We must wait and see, but don't forget the disgruntled, humiliated Russian Army, which (according to some reports) in 1993 at first refused to fire at the Parliament building and the rebels. And don't forget that Hungary recently voted against its 'Liberal' Government and returned the Socialist Government to power.
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