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Moscow stares into the abyss 

Wednesday, Sep 9 1998
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I didn't travel to Moscow to write about the crisis, but rather to be with my wife, Lena, a Russian who is temporarily living and working in Moscow, financially and emotionally helping her family through the travail of her aging father's eerie and metaphoric paralysis. Yet during my 10-day visit, the ruble collapsed, and I found myself on Moscow's streets and in her kitchens and living rooms, listening to the reactions of the people most affected by the week's chaos. The feeling was that of a city, like its currency, slowly sinking.

In that last week of August, as the Democrats, the Communists and President Yeltsin (whose influence was waning by the hour) haggled over a new balance of power, exhausted Russians watched prices soar. On Friday of that week, Lena eyed a pair of shoes in a department store marked at 450 rubles. When she returned on Sunday, they'd been re-tagged at 1,300 rubles. Imported sunflower oil shot up from 8 rubles to 40. Though salaries remained constant, purchasing power dwindled, especially on imported goods, for which the plummeting value of the ruble manifested itself in the cost of imports. There's no market explanation as to why the price of domestic foodstuffs should have risen from 20 percent to 60 percent, other than local opportunism.

Lena's cousin called from the Siberian city of Sverdlovsk, saying that shops there were empty from people unloading their rubles and hoarding for the winter. Moscow was comparatively calm, soothed by the insistence of a finance minister that there would at least be food staples available and affordable through Russia's most daunting winter in a decade. But by September 5, as an autumn chill descended on the city, those words appeared to be yet another in a stream of lies by public officials; meat was noticeably hard to find in shops. Meanwhile, the governor of the traditionally impoverished gold-mining republic of Yakutia announced that, for the first time in this century, its gold would remain in the republic rather than being sent to Moscow - an alarming indication of how the nation's center is no longer holding.

If there is any single perception, however tenuous, that glues a society together, it is that of fair play in a country's policies and laws. In Russia, that perception is awfully hard to find.

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Despite all the talk of "privatization," Russia still has only one telephone company, which charges customers $6 even for a failed attempt to call the United States when the circuits are jammed. (There is no utilities commission to monitor and approve rate hikes or business practices.) This is a country with no federal insurance for banks, which have been run by a core of freewheeling magnates, accurately called "oligarchs," who have routinely stolen their depositors' life savings and who, in most Russians' opinion, bear the blame for the nation's current woes.

Like America in the '20s, capitalist Russia has almost no labor movement or employee protections. I spoke with people there who have worked months in succession, up to 12 hours per day, without any days off, only to be paid weeks late. One woman, employed by an American company, told me her repeated requests for an unpaid vacation have been denied through three years of employment. And there is no agency, private or public, to which she can appeal.

The poorest citizens, living in rural villages miles from the capital, barter with goods rather than currency. (The International Monetary Fund's insistence that Russia collect its taxes is rendered somewhat absurd when wages are paid in pickled fish.) Meanwhile, the oligarchs, transferring millions of dollars from former state budgets and IMF funds into personal accounts in the West, simply refuse to pay their taxes. It's hard to believe that the IMF has been ignorant of this reality, and its tacit participation in the charade, by continuing to funnel more millions of dollars to known embezzlers, indicts the IMF in the crisis as much as it does the Russian leadership.

Nobody I spoke with believed that President Yeltsin had become anything but a national embarrassment - a crusty, bewildered alcoholic - or that Viktor S. Chernomyrdin (the former prime minister and ex-head of Russia's natural-gas utility, whose return to power Yeltsin was trying to orchestrate) would do a single thing to help the economy. In fact, people generally regarded him as a "fat cat" in the service of the oligarchs. (According to a European newswire report, Chernomyrdin personally profited by about $5 billion during his tenure in Russia's post-Soviet government, while it was announced last week that the entire Russian economy had only $13 billion in reserves.)

Russians' cynicism about their leaders is now so entrenched, most people say they'll support anyone, thief or not, who can stop the ruble's plunge into oblivion and let them get on with their lives. The very words capitalism and democracy have now replaced communism as synonyms for chicanery. Yeltsin's aura has so faded, the Communists (now the majority party in the Duma, the Russian parliament's lower house) can reasonably speculate that the Democrats have earned sufficient public contempt to allow the Communists to roar back into power.

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