Disorder remains legacy of Soviet collapse Glints of free enterprise and freedom sparkle, however

August 19, 1993|By Boston Globe

MOSCOW -- Exactly two years ago today, a gang of Kremlin hard-liners ordered tanks into the streets of Moscow. After three tense days -- after Boris Yeltsin had stood defiantly atop a rebel tank and thousands of citizens had rallied to his defense -- the gang called off its coup.

The old order -- the Communist Party and the Soviet Union -- died. A new order has not yet been born.

For now, disorder reigns.

Crime is rising, wars are ravaging Russia's southern rim, inflation is raging and industrial production is down sharply. But grim statistics tell only part of the story. For a country locked in a rigid order for the previous 75 years, disorder is not altogether bad.

The freedom to say anything, go anywhere, buy and sell everything, start a business, make a profit and spend it on whatever you like -- these are liberating experiences, unlike anything ever tasted in the country's 1,000-year history.

"Two years ago, the economy was hopeless, nobody thought you could do anything with it," Maxim Boycko, a top official at the Russian Commission of State Property, recalled yesterday. "Now the situation is only very difficult. To me, this is great progress."

Moreover, it is now impossible to go back to the old way of life. Everyone recognizes this, including those few who mourn its passing.

According to a poll this week by the Mneniye public-opinion firm, only 14 percent of Russians -- in Moscow, just 8 percent -- think life would be better if the Communists were still in power.

Exposure to Western goods, styles and information is virtually universal. The state agencies that once set all production rates, prices and distribution channels are dead. Even if Josef Stalin himself rose from the dead, he would have a hard time recreating the levers of social and economic control.

60,000 shops

Nearly 3,500 large-scale state factories, employing 20 percent of Russia's industrial workers, are now privately owned, sold off through auctions just in the past eight months. About 60,000 small enterprises, mainly shops, are also in private hands.

A stroll through the center of Moscow offers a daily display of the new life: well-dressed people, bustling streets, bright storefronts with merchandise of all types.

Long lines and empty shelves, once the visual signature of Russia, are conspicuously absent -- a direct result of Mr. Yeltsin's economic reforms, which let prices run free and thus gave producers, distributors and merchants an incentive to produce, distribute and stock their stores with goods.

Goods in the stores meant people could buy things if they had money, and they went about finding ways to earn money, more quickly and cleverly than anyone had imagined possible.

"Russians are more adept at market behavior than people gave them credit for," says Anders Aslund, an economist who advises the government here. "All the talk about 'the uniqueness of Russia,' and how this makes a market economy impossible, is just a convenient excuse for . . . ignorant and anti-intellectual attitudes."

At least in the larger cities, a new middle class is forming. Thus, wrote political analyst Vladimir Guliyev in the newspaper Kuranty, "the democratic reforms in this country have acquired a social foundation they didn't have before."

In the smaller towns -- in fact, almost anywhere outside Moscow and a few other cities -- full markets and fancy stores are not found at all. Most provinces are still run by the same Communist Party chiefs as before, and they block reforms at every step.

Even there, however, the dribblings of a market economy, combined with the loosening of central control from Moscow, have meant a greater abundance of food and other basic goods than at any time in the past decade.

Still, the path from socialism to capitalism in Russia is proving to be a slow and winding one.

Reform in agriculture is painfully slow. Private farms occupy only 2 percent of arable land. The state collectives still reign supreme and control the bulk of resources.

Even the privatization of industry, however fast-paced, has produced limited results. The whole point of the program was to create a new class of owners and to trigger competition, leading to greater efficiency and lower prices.

However, 70 percent of the newly private factories are owned by the same managers and workers' collectives that have always run things. "These plants still depend on subsidies, guaranteed supplies and guaranteed customers," says one Western embassy economist. "There's been no industrial restructuring, no splitting up of these dinosaurs."

The property commission's Mr. Boycko acknowledges that no big factory has yet gone bankrupt.

Inflation remains the main bottleneck blocking a spurt in economic growth. "As long as inflation is high, there's going to be no long-term capital investment here," says Charles Blitzer of the World Bank.

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