Soviet shoppers resigned to absorbing price shock

April 03, 1991|By Scott Shane | Scott Shane,Moscow Bureau of The Sun

MOSCOW -- A disembodied voice greeted commuters yesterday as they entered the Moscow subway, repeating again and again: "The price of a ride is now 15 kopecks. You may insert one 15-kopeck coin in the 15-kopeck turnstile, or three 5-kopeck coins in the 5-kopeck turnstile. The price of a ride is now 15 kopecks. . . ."

So, with a threefold increase in the long-sacred cost of a subway ride, the day of the steepest price increases in Soviet history began.

It continued, in stores that were mostly still empty, with much anger, fear and resignation, a little understanding and a trace of hope.

It ended with no explosion of protest from this long-suffering people, who in the past, after all, have put up with far worse at the hands of their rulers.

In the Moscow Department Store, at a display of men's gray suits made by a Soviet-Swiss joint venture, there was a lot of looking and not much buying. The price tags that had said 200 rubles Monday said 497 rubles yesterday.

"Whew! I'd have to save for four or five months to be able to buy that suit," said Vladimir Ulyanov, a 37-year-old engineer whose name just happens to be the same as the real name of Vladimir Lenin. ("No relation," he said.)

Mr. Ulyanov's 500-ruble monthly earnings are nearly twice the Soviet average, but his excursion among the clothing racks ended without a purchase.

"Bread and milk, I can understand that they had to raise the price. At the old price, a lot got thrown away," he said. "But with manufactured goods, I don't get it."

Still, Mr. Ulyanov predicted no major strikes or demonstrations.

"People are ready for it," he said. "There's been so much talk about it. People wanted to get it over with."

A few floors below, a big grocery store had little on sale except for milk -- thousands of blue, 1-liter cartons. The price had climbed overnight from 28 kopecks to 50 kopecks, but the line grew swiftly to more than 100 people.

One was a 26-year-old medical student named Marina. "For me, it's going to be very hard," she said. "I get just 120 rubles a month."

How will she cope? "I'll have to find part-time work," she said. "There's work at my institute. I could work 10 or 12 hours a week and still get my studies done."

If the price increases mean that people spend more time working and less time standing in line, that may be an achievement. Earlier price increases in the Baltic republic reportedly have had a positive effect on productivity.

Higher prices will sharply reduce the 250 billion rubles now spent annually on subsidies for food and other goods, permitting a reduction in the state budget deficit.

But even the first hours of the new prices were enough to demonstrate that prices set by bureaucrats still prevent supply and demand from coming into balance, creating shortages and gluts.

In the Moscow Department Store's electronics section, eight Soviet-made "Korvette" stereo amplifiers were swept away by the first shoppers who spotted the shipment, said salesclerk Alexander Golovyov.

The price had gone up from 650 rubles to 934 rubles, he said. But the black-market price is nearly 2,000 rubles, because like most consumer electronics, the amplifiers are in short supply -- yesterday's were the first the store had received in three months, he said.

"So these prices don't scare people," Mr. Golovyov said. "To balance the market, you'd have to raise prices [for electronic goods] four or five times."

In the capital's House of Footwear, riot police had to be summoned to control crowds trying to buy Hungarian shoes, Moscow television reported.

Grigory A. Yavlinsky, a prominent market economist and co-author of the acclaimed "500 Days" reform program discussed and rejected by President Mikhail S. Gorbachev last fall, warned in a televised interview that the attempt to control the market could backfire.

He said the Soviet Union risked ending up in the position of certain Latin American countries where market forces are distorted to benefit a specific part of the population.

"The market's going to take revenge against us for our failure to understand its laws today," Mr. Yavlinsky said.

In the newspaper of the opposition coalition Democratic Russia, commentator Alexei Chernichenko called the price increases "an economic Afghanistan" -- that is, a disastrous policy decision carried out by a narrow circle of top officials.

Mr. Chernichenko charged the government with raising prices while blocking many essential preconditions for a market economy. For instance, he said, it is blocking the distribution of land to farmers and using the KGB to intimidate entrepreneurs.

Prime Minister Valentin S. Pavlov, who designed the price reform, met yesterday with several hundred representatives of coal miners, both those on strike and those still working.

Mr. Pavlov promised economic concessions, such as a free trip anywhere in the Soviet Union every three years. But he refused to discuss the miners' political demands, which include the resignation of Mr. Gorbachev and the dissolution of the Supreme Soviet.

Many of the strikers support Russian Federation leader Boris N. Yeltsin, who had a moment of triumph yesterday at the Russian Congress of People's Deputies. Ivan K. Polozkov, the leader of the Russian Communist Party, which had hoped to unseat Mr. Yeltsin, in effect admitted defeat.

Mr. Polozkov announced -- on the fifth day of the congress -- that his conservative Communist faction had no intention of seeking the removal of Mr. Yeltsin. Many of the 1,000 deputies responded with uproarious laughter, interpreting the statement as dramatizing the hard-liners' defeat at the congress.

But Mr. Yeltsin's supporters have failed to gather the necessary votes to put the question of creating an elective presidency for Russia on the agenda.

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