Russian inflation means poverty on 4,400% raise

March 02, 1993|By Kathy Lally | Kathy Lally,Moscow Bureau

MOSCOW -- Tatyana Diachenko has a catalog of the despair into which her country has fallen since it began the painful lurch toward a market economy.

Fifteen years ago, she began keeping track of every kopeck she spent. Today, the worn notebooks she filled in at her tiny kitchen table provide a glimpse of the terrible financial pummeling Russians have suffered and the enormous psychological adjustment they have had to make.

These notes help to explain the tug-of-war under way between President Boris N. Yeltsin's determination to forge ahead with economic reform and the conservative hard-liners' desire to slow the pace and soften the blows of the economic revolution.

"At first I was shocked by the new prices," says Dr. Diachenko. "Every day it seemed there was an extra zero."

In pre-perestroika years, she earned 165 rubles a month as a doctor, and her husband, a colonel in the military, earned 400 rubles. That income held steady until 1990. "When I look back," she says, "I can't believe we could live so well on so little."

In two years of lightning change, everything was turned upside down. Now, a revolution and many zeros later, Dr. Diachenko's family barely scrapes by on a monthly income of 25,000 rubles -- which at current exchange rates is about $45. "It means we have no savings now," Dr. Diachenko says. "I can't budget for anything -- everything goes for food."

The speed of change has deeply threatened a people for whom prices were among the great certainties, offering reassuring ballast in an otherwise precarious world, even though many things were hard to find.

In December 1988, Dr. Diachenko spent 30 kopecks for a loaf of bread and 2 rubles for a kilo (2.2 pounds) of sausage. The monthly family income was about 600 rubles.

In December 1991, the loaf of bread cost 1 ruble, the kilo of sausage cost 60 rubles and the family income was 1,425 a month.

In December 1992, the bread cost 24 rubles, the sausage was 671 rubles and the family income was 25,300 rubles.

Toll on Russian psyche

The huge price increases have required an adjustment in thinking that has taken a tremendous toll on the Russian psyche. Not only do people have to accept the death of a philosophy they were taught to worship, but every time they make the smallest purchase they are confronted with evidence of the enormity of the change that still lies ahead. Once they could believe in the inevitability of affordable prices; now they can believe in nothing.

As a result, says Andrei Nuikin, a philosopher, many people have dropped the word "belief" from their vocabulary. "They have come to believe that believing is no good," he says. "One who does not believe in anything stands firmly on his feet. He cannot be disillusioned, no one can fool him."

Such a loss, especially a loss of faith in the future, exacts a price from every Russian, Mr. Nuikin says. "Even in the grimmest months of the war against Nazi Germany . . . people did not sink into that sinister gloom we see now at every turn. Faith in the future is lacking badly today."

The fear of looking ahead has made many Russians turn backward. Many -- especially older people -- have begun longing nostalgically for the pre-perestroika days.

Ask nearly anyone over 50 about the "years of stagnation" from 1964 until 1982 and inevitably they will say, "That's when we had everything." Those were the years when Leonid I. Brezhnev ran the country, and after the years of terror under Josef V. Stalin and the years of turmoil under Nikita Khrushchev, they were years of stability if not plenty.

A recent poll of 1,000 Muscovites found more than 24 percent thought Russians lived a better life during the Brezhnev years than at any other time in this century.

Another 17 percent thought life was best under czarism, 8 percent thought it was best under Stalin, 2 percent thought it was best under Mikhail S. Gorbachev and 5 thought it was best "today."

Not ready to turn back

Despite fears of the future, Dr. Diachenko, who is in her mid-40s, is part of the generation that is not yet ready to turn back. She, and thousands like her, are still committed to economic and political reform despite its high price.

"It is easier to breathe now," she says. "I lived as a rat before. I was afraid of everything.

"Now it's much easier to live, from the point of view of freedom."

But from the point of view of finances, life is much harder.

According to Russia's Ministry of Economics, the average cost nationally of 19 basic items of food necessary for minimum nutrition was 4,954 rubles last month, seven times higher than it was a year earlier. In Moscow, the cost was higher than average -- 6,893 rubles.

A year ago, prices in regular Russian stores were much lower than in special stores where imported, higher quality, food is sold for dollars. Now, many regular stores are selling food at the same price or even higher, at a time when the salaries in Russia are much lower than in the rest of the world.

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