As Summit Applause Dies, Gorbachev Goes Back to Russia Here's the Trouble with the System: There's No System

July 21, 1991|By WILL ENGLUND

MOSCOW. — What was so good about Mikhail S. Gorbachev's trip to London to see the leaders of the capitalist world?

Push through the crowds that jam every available square inch of the ABV clothing and souvenir shop on Tverskaya Street. In the back room upstairs you'll find Alexei R. Kazakov, a young man with a Benetton fanny pack and the imposing title of chief commodities expert -- which means he's the buyer for the store. He'll explain the significance of the London summit: ''The closer to the West, the better for our shop.''

It's that simple. Never mind that the West didn't offer a whole lot. Cut through Mr. Gorbachev's ponderously vague language -- ''the integration of the Soviet Union with the world economy'' -- and you'll discover that what he's talking about is building a replica of a Western capitalist democracy.

That's actually a lot further than he's gone before, although it's what many people here have been expecting. Mr. Kazakov, for one, is delighted with the news.

The ABV shop perfectly mirrors the weird distortions that are sapping the logic of everyday life in the Soviet Union, as the country wanders in some uncharted region that's neither socialism nor anything else.

While American rock music blasts through the store, shoppers admire clothing that should be fantastically expensive. A dress costs 1,600 rubles: That's only about $59, but it's also about four times the average monthly salary here. Yet someone steps up to buy it. If they want, customers can opt instead for a handsome brass candelabrum as a souvenir. Price, just 12,250 rubles.

Prices here seem totally out of line with reality. The store finds customers because there are enough Soviet citizens walking around who, for one usually suspect reason or another, have bulging wallets. But Mr. Kazakov would rather do business in a system that created reasonable prices -- and a large middle class.

But the Soviet Union is not yet a Western country and ABV is not yet a shopping-mall boutique. Out front it's all English signs and stylish clothing, but upstairs, where Mr. Kazakov works, there's the ubiquitous old Moscow wallpaper and an even older Moscow smell. Tea is brewing somewhere and a tough-looking old man is quietly keeping an eye on things from behind an empty desk. As at so many quasi-private businesses in this city, there must be a dozen other people back here, performing not-quite-recognizable jobs, an incredibly top-heavy staff by American standards.

What ABV needs if it is to operate logically is a logical system to operate in -- and that's what Mr. Kazakov sees coming out of the London summit.

Mr. Gorbachev didn't get any money out of the West last week, but he began the long job of trying to tie his country inextricably into the Western way of doing business. The Western leaders happily promised to hold his feet to the fire, through follow-up conferences and an associate membership for the Soviet Union in the International Monetary Fund.

But, assuming he truly wants to pursue this change to the end, can Mr. Gorbachev do it? Vladimir V. Mitrofanov is by turns totally optimistic and totally pessimistic, in such short order that you can only guess which way the conversation is headed next. He is executive director of the Association of Joint Ventures, a sort of private trade group of firms that have formed partnerships with Western companies.

Business is lousy and it's growing worse and he, too, says it's because the Soviet Union lacks a system. Capitalism in the West has evolved into an incredibly complex structure, buttressed by contracts and a legal system that provide investors and business executives with security and an assurance that things will work in a certain understood way.

There's nothing like that now in the Soviet Union, Mr. Mitrofanov says, and naturally investors are wary of doing business here as a result.

''What we are lacking is this legal support and legal defense of our new businessmen,'' he says.

The only problem, as he sees it, is that a lot of people like it that way.

''Public opinion in this country is still very conservative, and many sectors of the state government are opposed to us,'' he says.

But the problems facing reform go beyond disgruntled Communists. The political task in building a new society is enormous -- this in a country where new political parties opposed to Mr. Gorbachev are springing up on both the left and the right, and where the Russian parliament just spent five days simply trying to elect a chairman, and failed.

Moreover, the economy itself is clearly in worsening shape. Inflation is threatening to run out of control, production is dropping, with the Gross National Product down 10 percent this year, and a drought in the agricultural heartland is cutting into the harvest. Meat, butter and cheese production is already down 13 percent this year.

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