Crisis, misery and the Russian winter

September 14, 1998|By William Pfaff

PARIS -- The fierce political struggle in Moscow closes the post-Communist era in Russia, as the events of October 1917 ended the period of inconclusive reform presided over by Alexander Kerensky. No one can tell what is behind the door now opening.

As always, political crisis is accompanied by misery for the Russian people. Winter is about to arrive, at a moment when existing channels of food and fuel distribution are failing because of the collapse of the ruble. Stocks of all kinds of goods are falling, and it is increasingly difficult to replenish inventories.

The outgoing government claims that there will be enough food for the winter, but it fears the effects of the hoarding that now has begun.

The grain harvest this year is reported to have been only two-thirds of last year's, and the potato crop has been devastated by exceptional rains.

People are buying up whatever is available in the shops -- food, but also electronics, white goods and anything that will enable them to transform their rubles into lasting value.

Inflation fears

This is sensible behavior for people who anticipate the arrival of what could be uncontrollable inflation.

Imports are said to amount to as much as 80 percent of the food and goods consumed in Russia's cities. As export earnings have precipitously dropped, the country's ability to pay for imports is drastically reduced. The fall in energy prices, Russia's most valuable export, was one of the main events triggering the present crisis.

Foreign loans thus have been crucial to Russia's ability to buy abroad, but unless the IMF and Group of 7 reverse their stated positions, there will be no more loans without policy changes -- renewed "reforms," meaning austerity -- that now seem extremely unlikely, if not impossible.

The internationalization of the urban economies has tended to cut them off from the regions, which have been forced into barter and various forms of agricultural and industrial improvisation in order to survive.

This leaves the regions today in somewhat better condition to get through the winter. There is a strong tradition of peasant solidarity, and nearly everyone who has had access to dollars in recent years has put as many of them away as possible.

Assurances needed

But while these resources will somewhat blunt the consequences of the ruble's crash, they only temporize with the fundamental problem that Russia is broke, heavily dependent on imported food and goods, and in for a terrible winter. If provisions and fuel are not assured, the population's reactions may become desperate.

Leaders of the European Union are committed to going to Moscow when a new prime minister is confirmed, led by the Austrian foreign minister Wolfgang Schuessel. They argue now that social cohesion and institutional reform are much more important to Russia than the West has until now admitted.

Misdirected reassurance

The West's insistence on market freedom and inflation control has been directed toward reassuring foreign lenders rather than Russia's citizens.

Mr. Schuessel says that emphasis now should be placed on the "European model" of capitalism "with its social security nets." However this change in the advice being offered Moscow comes rather late to have much practical application. The EU mission will allow Europe to "better appreciate" what is going on in Moscow. There is no ring of urgency in that statement.

Europe has plenty of money and might have imposed its own views on reform earlier, but as is usually the case concerning the more important world issues, the EU prefers to leave it to Washington (which, of course, is the way Washington prefers it, too).

But in this affair -- as the Clinton visit to Moscow demonstrated -- Washington has little to offer the Russians. They have abused Western confidence by allowing loans and aid to be stolen or squandered, and no one is willing to go on with that.

Getting through winter

Could something be done to deal with the fundamental problem of winter survival?

The answer is surely "yes." Some good can be done through religious and other private volunteer groups able to organize direct measures of relief. However, the most important step that could be taken at this point would be to exempt food from the general cut-off of foreign aid and loans.

It would be possible for Western governments and agencies to finance Russia's basic imported food needs for the winter.

This should be done without regard to the questions of basic economic reform, which are in the immediate term insoluble.

Given the policy paralysis in Washington, this would seem a matter in which the Europeans can and should take the lead. It is, on the political and even moral planes, an opportunity to demonstrate Western European solidarity with the Russian people.

It would be a measure of prudence, as well, for the peoples who share the continent with Russia.

William Pfaff is a syndicated columnist.

Pub Date: 9/14/98

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