One by one, Russians find their own market economy As prices multiply, so does deal-making

January 14, 1992|By Kathy Lally | Kathy Lally,Moscow Bureau of The Sun

MOSCOW -- While prices nervously jump up and down here and politicians angrily accuse each other of ruining the country, some Russians have found their own way to a market economy.

Nadya, a factory worker in her late 30s, has worked her own miracle. She and her husband and four children have given up their apartment -- renting it for dollars to foreigners willing to pay anything for scarce housing.

The dollars can be traded in for enormous amounts of rubles, making the family virtual millionaires on the ruble economy. But they are paying a terrible price.

Nadya and her family moved in with their best friends, neighbors who also have a large family. Four adults and nine children share three rooms, a kitchen and bathroom. It would be an unbearable way to live if it weren't for the dollars.

Nadya charges $700 a month for her apartment, which she rents from the city for 35 rubles a month. She can get 130 rubles for each dollar, or 91,000 rubles a month. She splits the money with the friend whose apartment she shares. So each family is getting up to 45,500 rubles a month in a country where the average pay has been 500 rubles.

All of this is highly illegal, which is why Nadya was not interested in mentioning her last name. It is also widely overlooked by officials. Every week, an English-language newspaper published for foreigners is full of advertisements for such apartments.

For anyone with dollars or lots of rubles, food abounds in Moscow. Nadya can go to the unregulated farmers' markets and buy as many chickens as she wants for 150 rubles each. She can get a fine cut of beef for 100 rubles a pound or oranges for 10 rubles a pound.

What is unavailable, such as milk, she can buy at the Irish Store, which imports products for foreigners and requires payment in hard currency. But she cherishes her dollars and spends them carefully.

"We convert the dollars into rubles so we have many rubles instead of few dollars," Nadya says. "Then we save as many dollars as we can. If things get worse, we will need them."

If times get better, "we will buy an apartment or start a business."

Nearly two weeks after the Russian government removed the subsidies that kept food prices artificially low, it is impossible to judge whether life will get better or worse here.

As prices shot up, speculation erupted about when, not whether, food riots would start.

Amid the uncertainty, the optimist can find a few faint signs that a market economy is developing.

For example, in Yaroslavl, on the Volga, sour cream was selling at 70 rubles a kilogram (2.2 pounds), which was considered outrageous. They decided they could do without. Most of the sour cream had to be returned to the factory, and discussions began about a new price.

In Kursk, in southern Russia, chickens that had been 5 rubles each shot up to 58 rubles, then came down to 37 rubles when they sat untouched.

However, the pessimist can find signs that it will all end in disaster.

In Stavropol in the northern Caucasus, crowds smashed shop windows to protest the high prices, according to reports from the Tass news agency.

The newspaper Kuranty reported that in a poll of 2,040 Muscovites, 31 percent said they would not take part in demonstrations to protest the rising prices. Most were pensioners who feel the burden of hunting for food most heavily, the newspaper said.

Meanwhile, life goes on. Nadya, the apartment entrepreneur, isn't the only one who has found a way to make do.

Mironenko Aleksandrovich, a bus driver, said yesterday that he bought huge mounds of bread before the prices went up, dried it and now happily eats it with soup.

Lydia Sneger, a high school chemistry teacher, said her grandmother works in a vegetable store and saves carrots and cabbage for her. Another relative works in a sugar store, and Mrs. Sneger can trade the sugar she gets for desirable canned goods.

Peter Zamkov, an engineer, has a network of friends who shop for him or phone him when they see a bargain.

They are managing. But no one likes to think about what might happen by March, when the winter crops are exhausted and the new harvest is months away.

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