October 19, 1998   
This Date's Issues: 2437 •2438• 

Johnson's Russia List
#2438
19 October 1998
davidjohnson@erols.com

[Note from David Johnson:
1. AFP: Tuberculosis Spreads to 2.5 Million Russians.
2. AFP: Poll: Moscow Mayor Would Win Presidential Elections.
3. Reuters: Siberian town struggles in pit of depression.
4. Renfrey Clarke: PROTEST DAY IN A RUSSIAN COAL TOWN.
5. Moskovskiy Komsomolets: Yelena Yegorova,"Abortion Victims." 
('Abortion' of Nascent Middle Class Viewed).]
6. Reuters: Russia Sept GDP down 9.9 pct-Prime quotes Committee.]

*******

#1
Tuberculosis Spreads to 2.5 Million Russians 

MOSCOW, Oct. 19, 1998 -- (Agence France Presse) A total of 2.5 million
Russians are now suffering from tuberculosis, a disease which has been
spreading rapidly in Russia, a senior Health Ministry official said Friday on
Moscow radio. 
The number of people sick with the disease increased by 8.5 percent in the
first 10 months of 1998, according to Gennady Onishchenko, the first deputy
health minister. 
The health authorities are losing the battle to strains of the disease that
are resistant to medication, he said. 
The problem is becoming widespread, alarming the World Health Organization,
but is particularly acute in Russia, where prisons are fertile breeding
grounds for tuberculosis. 
Doctors are also at odds over the best way of tackling the disease, between
imported Western methods or the national treatment developed under the Soviet
Union, which is longer and more costly. 
The prevalence of tuberculosis rose from an average of 7.7 cases per 100,000
Russians in 1990 to 17.7 in 1998. But among prisoners it is 50 times higher
than in the rest of the population, international bodies say.

*******

#2
Poll: Moscow Mayor Would Win Presidential Elections 

MOSCOW, Oct. 19, 1998 -- (Agence France Presse) Moscow Mayor Yury Luzhkov
would win Russian presidential elections if they were held now, beating
Communist leader Gennady Zyuganov or ex-Gen. Aleksander Lebed, an opinion poll
indicated late Sunday. 
The poll, conducted weekly by the independent NTV television channel, followed
Luzhkov's announcement last week that he was forming a new political party. 
Elections are not due until June 2000 but potential candidates have been
putting down markers in recent days following the latest illness of President
Boris Yeltsin. 
The NTV poll said that in a runoff Luzhkov would beat Lebed, the governor of
Krasnoyarsk, with 37 percent to 29 percent, and Zyuganov by 38 percent to 29
percent. 
A month ago Lebed was ahead of Luzhkov by 34 percent to 32 percent. In the
first round of voting, Luzhkov and Zyuganov would each win 19 percent of the
vote, followed by Lebed with 14 percent and Grigory Yavlinsky, head of the
moderate Yabloko party, with 10 percent. 
If Prime Minister Yevgeny Primakov were a candidate, the poll showed, he would
score 9 percent, taking votes from all three of his principal opponents. 
In that case, Zyuganov would score 17 percent, Luzhkov 16 percent and Lebed 13
percent. 
In the same NTV program which revealed the poll, Lebed said early presidential
elections were inevitable, adding that he viewed the prospect calmly. 
Lebed said Saturday that an early election would benefit Russia, as "Yeltsin
is so weak that no one pays attention to him." 
"He is an old man who enjoys neither the support of parliament nor the
confidence of the voters nor international respect," Lebed was quoted by
Interfax news agency as saying. 
Russian television stations all concentrated on the "post-Yeltsin" era in
their usual Sunday evening political analysis programs. 

********

#3
FEATURE - Siberian town struggles in pit of depression
By Peter Graff

BORODINO, Russia, Oct 19 (Reuters) - If you want to meet the victims of
Russia's great depression, you might take a small trip out to the centre of
Siberia. 
Drive a few hours east from the city of Krasnoyarsk, through rows of stunted
white birches and fields of tall grass. Pass a few wooden shacks and a single
flock of geese on the edge of the town of Borodino. 
Row upon row of concrete slab apartment blocks loom overhead. Huge letters
mounted atop one still read: ``Glory to Soviet Youth.'' 
Drive across the railway tracks and you can see the only reason why there is a
town here. The Borodino Coal Pit. The single largest open-cast pit in Russia,
proud and grey and six km (four miles) long, dominating even its own vast
cranes. 
Fifty years ago there was no town here at all. Now it holds 18,000 people, all
of whom owe their livelihoods to The Pit. 
The strong, uncomplaining men put in 12-hour night shifts at the excavators in
Siberian winters that hover around minus 40 degrees (Celsius and Fahrenheit). 
Their wives work in the company store, or the company school, or the company
health clinic. 
Now, of course, The Pit is dying. And so is the town. 

BODY BLOW 

Russia's coal industry has been dealt a body blow by the collapse of Soviet-
era industry. As factories shut around the country, plunging industrial output
has dried up demand. 
At some mines, especially old, deep-shaft mines in remote locations, costs can
be so high that the mine loses money with each tonne of coal brought to the
surface. 
Law enforcement officials say that at some mines, corrupt dealers have
embezzled money paid for coal before the cash reaches the mine. 
But the main problem at Borodino, workers will tell you, is summed up in the
single word ``neplatezhesposobnost'' -- the inability of customers to pay. The
workers in The Pit are buried at the bottom of Russia's mountain of internal
debts. 
Krasnoyarsk's giant aluminium plant owes money to the power plant, the power
plant owes money to the coal pit, the coal pit owes money to its workers, says
shift manager Andrei Barabash. 
``As soon as we started to ask for some money they call us monopolists. You
would think our consumers are wonderful and we are doing nothing.'' 
Like most of the men of Borodino, Barabash, in his mid-50s, has worked his
whole adult life in the town. 
``I remember when in a shift you would send off 45,000, maybe 50,000 tonnes.
That was work,'' he says. ``Now you scrape together maybe 12,000 or 13,000 for
delivery. It's tough.'' 
Of the orders that do remain, about 80 percent are paid for with barter:
heating oil or petrol. Supplies to keep the pit running -- nothing for the
workers. 
``We have grown used to potatoes and cabbage. Whatever you can grow in your
garden.'' 

``TALK TO THE GENERAL DIRECTOR'' 

Russia's miners have gingerly begun protesting this year. For several weeks
during the summer, groups of miners blocked branches of the trans-Siberian
railway. Others maintained a tent camp outside the government headquarters in
Moscow demanding that President Boris Yeltsin step down. 
Vladimir Mezhov, head of Borodino's branch of the miners' trade union, intones
a familiar litany. Until last month, the workers at Borodino had not been paid
since February. 
In September the union finally threatened to strike. The workers were paid for
two months -- March and August. 
They are still owed five months' back pay, some 41 million roubles. That was
worth $7 million a few months ago. Now that the rouble has collapsed, if they
ever get their money it will be worth a third of that. 
Meanwhile, the company lets workers sign for supplies at a poorly stocked
company store, going slowly into debt against the salaries they have yet to
see. 
And under the crumbling remnants of the Soviet system, the workers in this
one-industry town rely on The Pit for far more than cash wages. 
As Mezhov recites his tale, a man in a woollen cap enters the dispatching room
to have a word with him. 
``I need to talk to you about Viktor Solomatin,'' he says. ``The man can't
walk. He's ready to cry. He needs to have his operation.'' 
``You already know, our insurance company has unilaterally suspended its
contract. It won't pay for operations,'' Mezhov replies. 
``What are we supposed to do? Everything is money now. We need to pay for
medicine. We need to pay for blood...He needs his operation.'' 
``You have to talk to the general director.'' 

HOPE DIES LAST 

The night shift has arrived. The new shift leader is Grigory Bryankin, a
stocky, friendly, crew-cut man of 42. 
Out at a cliff there is a small vantage point overlooking The Pit, quiet now
as the shifts change. The sun has set, but in the lingering northern twilight
the shadows of the excavators can be seen on the horizon. 
Bryankin points out the seam in the pit face, 30 metres (100 feet) below
ground-level. After all the town's stories, it comes as a surprise that his
face lights up with enthusiasm as he sweeps his arm across the panorama. 
``It is good coal. And inexpensive,'' he says. ``You won't find better geology
anywhere.'' 
Although it is still only autumn, Siberia in the twilight already looks harsh
and spare. But Bryankin says it is rich land. 
``There were plenty of mushrooms this year. In the summer we have fruit. Wild
cherries and crab apples...This year I grew some watermelons. A local variety.
Small but very tasty.'' 
Nobody will starve in Borodino this winter, he says. 
``There are tomatoes and cucumbers. We make pickles that will last the whole
year.'' 
``Some day things will get better. I'm sure of it,'' he says. ``We say hope is
the last thing to die.'' 

*****

#4
From: austgreen@glas.apc.org (Renfrey Clarke)
Date: Sun, 18 Oct 1998

#PROTEST DAY IN A RUSSIAN COAL TOWN
#By Renfrey Clarke
#PROKOPYEVSK, Russia - "We're here to show Yeltsin we're capable of
putting up a fight," Pyotr Suldin, a fitter in the Ziminka mine, declared
to the crowd. "So long as Yeltsin is in power, we'll force the trade unions
- yes, force them - to mount further struggles!" 
#Before Suldin on Prokopyevsk's Victory Square were around 8000 citizens
of this grimy, run-down city in the Kuzbass coal and metallurgical region of
Siberia. Earlier in the week, workers at the city's Kalinin mine had held
the mine director hostage in his office for half a day after an expected
wage pay-out had failed to materialise. Later, the miners were to blockade a
local rail line as they tried to force a settlement of the arrears. But now,
on October 7, workers from the city were taking part in the nationwide day
of protest organised by Russia's main trade union federation.
#For anyone familiar with the last decade in the history of the Russian
labour movement, the scene on the square would have been charged with irony.
Suldin represents his mine on the Prokopyevsk Workers Committee. In 1989 and
again in 1991, led by an earlier committee, Prokopyevsk miners played a
vigorous role in the huge coal strikes that helped seal the fate of the
Soviet Union.
#In 1990 and 1991 Boris Yeltsin, as chairperson of the Russian Supreme
Soviet and leader of the liberal capitalist wing of the Soviet elite, was a
figure of hope for many of the Kuzbass miners. But behind the speakers at
the meeting in Prokopyevsk this year was a large banner proclaiming:
"Yeltsin should resign!"
#In Prokopyevsk in August the average miner was owed four months' wages,
and with the financial crisis that now grips Russia, the arrears continue to
increase. Massive numbers of Kuzbass workers now realise they were duped by
Yeltsin and the groups that thrust him into power. The result is a
formidable anger. The turnabout in popular thinking was put to me most
bluntly on October 5 in Novokuznetsk, the largest city of the Kuzbass, by a
middle-aged miner who would give his name only as Vasily Nikolaevich. "We're
ashamed of what we did in 1989," he said. "So far as we're concerned now,
Yeltsin is a criminal." 
#According to the Federation of Trade Union Organisations of the Kuzbass
more than 100,000 of the 3 million people of Kemerovo Province, which
includes the Kuzbass, took part in protest demonstrations on October 7.
Workers at 44 mines and open cuts declared one-day stoppages. A number of
the region's largest engineering plants ceased work as well. Participation
in the protests was also strong among teachers and health workers.
#The Kuzbass in Soviet times was among the most prosperous districts of
the USSR, and the region's largest cities still have an air of well-built
solidity about them. But somehow, the prosperity never left its mark on
Prokopyevsk. The centre of this city of 250,000 people has only a few
streets of brick buildings, their facades mostly blackened by coal smoke and
eroded by forty-degree frosts. Prokopyevsk for the most part consists of
small, often decrepit wooden houses, unsewered and without running water,
set along unpaved streets that wind between hills and pit-heaps. According
to the city's mayor, Yevgeny Golubyev, much of the housing dates from the
eras of crash industrialisation and wartime emergency, and was meant only to
be temporary. But it was never replaced, and now, one in eight of the
dwellings is unfit for habitation.
#The local economy in Prokopyevsk is focused on rich reserves of
high-quality coking coal. But with the steep decline during the 1990s of
Russia's industrial output, demand for coal has slumped. In addition, the
mines are near the end of the chain of payments that begins when finished
industrial products are purchased; in Russia's demonetised economy, little
of this cash ever reaches the coal enterprises. The problems of the coal
industry have hit Prokopyevsk with particular force, since the city has few
large employers apart from the mines, and the local administration depends
on the coal enterprises for as much as three-quarters of its revenues. The
financial starvation of the coal producers has turned into a near-universal
economic famine.
#According to Yury Kaufman, local head of the Russian Independent Union of
Coal Industry workers, about 25 per cent of the Prokopyevsk workforce is now
unemployed. Five of the city's 13 mines have been shut down, and other
important enterprises that are linked closely to the coal sector have cut
their payrolls drastically. "The electrical machinery plant used to employ
eight to ten thousand people," Kaufman says. "Now there are about 1500
there, working a short week."
#As increasing joblessness adds to the impact of wage non-payments, many
of the preconditions for modern, civilised life - and in some cases even for
physical survival - have ceased to exist. "There's real hunger here,"
Kaufman observes. "In the enterprises, workers are fainting on the job.
Miners are going down the shafts hungry. I've been in miners' homes where
there isn't even a crust of bread." Mayor Golubyev notes that the city
administration no longer even tries to collect rents for municipal housing,
since so few tenants are able to pay. 
#The provision of social services in Prokopyevsk has largely
disintegrated. Teachers and health workers mostly remain on the job, but
according to Golubyev their pay, meant to be provided through the Kemerovo
Province administration, is five months in arrears. The local authorities
save money by refusing to pay federal taxes, but money for any service meant
to be funded out of the local budget is almost non-existent. Communal
service workers - the people who collect the garbage and repair the
pot-holed roads - have not been paid in twelve months. The only medicines
which the city now provides free of charge are insulin for diabetics and
pain-killers for cancer patients. A loan fund has had to be created,
Golubyev says, so that pensioners can buy medicines on credit against their
pensions, which are four months in arrears. Nevertheless, people are dying
for lack of proper treatment. Says Kaufman: "The life expectancy of a miner
is 54 years, and the death rate is twice the birth rate. It's genocide."
#Among Prokopyevsk citizens, Golubyev notes, there is a strong sense of
having been abandoned by the federal authorities. Federal subsidies that
almost all the coal enterprises need in order to operate arrive late, and
according to Kaufman, the loss-making status of the local coal industry is
itself the result of deliberate government decisions. "The mines have drawn
up business plans that on the basis of minimal investments would allow them
to do without subsidies in two or three years," the union leader says. "But
the government just isn't interested."
#Meanwhile, reports abound of the proceeds from coal sales being
misappropriated. According to Vladimir Kochanovsky, chairperson of the
Prokopyevsk Workers Committee, many sales proceed through a labyrinth of
agents and intermediaries, each of whom takes a cut. The system is deeply
infiltrated by criminal groups, and Kochanovsky maintains that it is not
rare for mine managers themselves to be involved in shady deals. 
# With enterprises running at a loss and threatened with closure,
conventional methods of economic struggle are largely closed off to the
Prokopyevsk labour movement. Efforts to expose the actions of crooked
managers and coal dealers, meanwhile, can easily get labour activists
killed. For both reasons, workers in Prokopyevsk aim their struggles
primarily at the federal government, seen as having overall responsibility
for an unbearable situation. The result is that labour action in the city
usually has a directly political character. The tools of political struggle
have a distinctive cast that reflects local experience.
#A notable peculiarity is that fact that in Prokopyevsk as in much of the
Kuzbass, functions of leadership that in other settings would be carried out
by political parties are performed by trade unions. Parties do not have a
good reputation in the region; in 1989 the Communist Party of the Soviet
Union did its best to dampen and subvert the miners' struggle, with the
result that Kuzbass workers today regard organised political formations with
suspicion. The Communist Party of the Russian Federation (KPRF) operates in
Prokopyevsk largely as an organisation of pensioners, supporting labour
struggles but making little organised input, and enjoying only minimal
influence. 
#Meanwhile, the Kuzbass trade unions are extensively politicised, and
unusually responsive to their rank and file. In 1989 the Soviet trade unions
were almost irrelevant to the miners' strike, which was led by workers'
committees convened by elected workplace delegates. But as Kaufman explains
the process, activists from the workers' committees subsequently moved into
the local trade unions, renewing the leaderships and democratising the
structures. In the Prokopyevsk trade unions, almost no officials from Soviet
times remain. 
#The workers' committees still exist in most of the important cities of
the Kuzbass as networks of politicised militants who carry out propaganda
activity, monitor the work of the trade unions, and provide a channel
through which workers can influence local authorities.
#In Prokopyevsk, the political leadership which the trade unions and the
Workers Committee have provided for the local labour movement is impressive
in many ways. For months before the October 7 day of protest, Kaufman headed
a coordinating committee which met almost daily and drew a broad range of
forces - trade unions, political groups, and social-political movements -
into the organising tasks. 
#For the people who built it, the protest was a richly deserved success.
Most of the city's enterprises shut down for the day, and compared to the
size of the local population, the demonstration was among the largest in
Russia. The protesters heard speakers from many different sectors voice the
anger of a community that felt itself betrayed and plundered.
#"We've met with a dozen government commissions, signed a dozen
agreements, but here we are on the square having to demand what should be
ours," Mayor Golubyev told the crowd. 
#"The factories and farms are being crushed by the reforms," another
speaker charged. "The elite live in luxury, and pensioners don't even get
their pittance. All the benefits - health, education - that we used to enjoy
are being liquidated. It's genocide!"
#Health workers can't close the hospitals and leave people to die," one of
their leaders declared, "but we're not being paid. In many hospitals there
aren't basic medicines - not even food. Only united, massive action can
force the authorities to meet their responsibilities to the population!" 
#A common theme of the speeches was that the situation had become
unendurable, and that people's patience was running out. "A social explosion
is ripening in this country!" one of the speakers warned.
#On the national scale, the hundreds of demonstrations on October 7
reinforced the point - already clear from opinion surveys - that most
Russians are deeply discontented with the situation in their country, and
want Yeltsin to resign. In an abstract way, the actions also raised the
possibility that mass acts of protest and civil disobedience might at length
make Russia ungovernable. But even in Prokopyevsk, where the mood was
probably as incendiary as anywhere in the country, major political
opportunities were missed. Little flesh was ever placed on the bare bones of
the demands framed by the Federation of Independent Trade Unions of Russia
when it called on its affiliates to bring their members into the streets.
#"Yeltsin out!" But who or what should replace him? "Pay all wage
arrears!" But who should pay them? How are workers to answer the objection
that large numbers of debtor enterprises are privately owned and technically
insolvent? "Change the course of the reforms!" But to what? "We want the
reforms changed so that they support the interests of working people,"
declared one of the speakers in Prokopyevsk on October 7. But what are these
interests, and what concrete steps should be taken? For lack of clear
answers, much of the educative potential of the demonstrations was lost. 
#The Kuzbass miners are not economists or political theorists, and the
deeper questions which their struggle throws up are of a complexity that
rank and file militants cannot be expected to cope with on their own. This
is one of the key reasons why the forms of political leadership the workers
have developed spontaneously - rank and file committees and politicised
trade unions - can only take the movement forward a certain distance. Beyond
that point, further progress depends on an infusion of ideas from people
whose understanding of key questions is much more developed, and who are
bound to the workers and their struggles by ideological and programmatic
commitment. The need, in short, is for a workers' political party.
#As already suggested, the Kuzbass workers are skeptical that any
political party will defend their interests above the career prospects of
its leading cadres. Nor are the claimants to the role of political-party
leadership of the working class in Kemerovo Province especially appealing.
The KPRF is not a force to be taken seriously, in terms either of its
politics or membership. Smaller left groups combine a formalistic, dogmatic
"Marxism-Leninism" with a KPRF-style weakness for the "Russian national
idea", and with despotic internal practices.
# Such organisations, however, are not the whole sum of the political left
in Siberia. A few hours by train from the Kuzbass is Novosibirsk, the
"capital of Siberia", and the main educational centre in Russia east of the
Urals. Before arriving in the Kuzbass I spent several days in Novosibirsk,
including an evening of intense discussion with local leaders of the Russian
Komsomol. This radical youth group is the only sizable left formation in
Russia that combines sophisticated Marxist politics with a democratic
internal regime. Well-established in the universities and colleges of
Novosibirsk, the Komsomol has almost no presence as yet in the Kuzbass. 
#There are no customs posts on the border of Kemerovo Province, and even
if there were, they would not be able to stop the importing of ideas whose
time has come. The melding of radical intellectuals with militant workers is
something that has happened before in Russian history. In places like
Prokopyevsk, it is quite conceivable that such a process could see the best
and richest traditions of the Russian left return to life. 
******

#5
'Abortion' of Nascent Middle Class Viewed 

Moskovskiy Komsomolets
2 October 1998
[translation for personal use only]
Article by Yelena Yegorova: "Abortion Victims"

Anamnesis of the Middle Class
Date of birth: 1995-1996
Quantity: about 30 million persons--as a rule, urban
dwellers.
Professional composition: top managers, bank employees,
small and medium-size business owners, ordinary functionaries,
"shuttle traders," journalists.
Income: between $270 and $2,000 a month per family
member. Almost 80 percent have savings in banks.
Distinguishing signs: mobile telephone, car--Skoda,
Opel, or DEU (that is, between $10,000 and $20,000), famous Western
brandname quality clothes.
Abilities: vacations abroad, visits to restaurants,
educating children in private schools, attending gyms and fitness
centers.
Complaints: high income taxes, weak legislation in the
area of small and medium-size business, lack of bank--and most
important, mortgage--financing.

Such is the patient's medical history. And the diagnosis is
simple: After 17 August, the patient is more dead than alive.
Bankrupt banks have buried the money and the possibility of paying
off clients from other cities. Potential customers have been left
without work and untied funds. Skilled managers and workers have
been fired. But the worst part is that nobody seems to be planning
to treat the middle class. The anticrisis program being prepared by
the government does not contain a single word about those who only
half a year ago were honestly working, getting regular salaries,
paying taxes, and symbolized the democratic well-being of the
country. They seem to have been forgotten.
The middle class has decided to engage in self-treatment. A
new political party, which could be headed by Yuriy Luzhkov--and
nobody else--intends to register in Moscow as early as December. At
least, it was to the Moscow mayor that the movement's organizers--
representatives of small and medium-size business--intend to turn
for support.
In Russia, the middle class and its role in public life have
always been referred to with a certain deal of irony. Now, however,
the skeptics will have to have second thoughts: By the most modest
estimates, the new party can count on the votes of more than 30
million voters!
Will Russia survive without a middle class? In what situation
have thousands of skilled specialists found themselves at work and
at home in a country ravaged by ignorants and paralyzed by
crisis?

Final Analysis of the Victim

The debate over whether Russia has a
middle class ended before
having really started... Sociologists, politicians, and journalists
were not destined to exercise their eloquence anymore. Since 17
August, the question of the Russian middle class can be considered
rhetorical. It might be more productive to discuss, for instance,
whether there is life on Mars...
Some call it abortion. The Kiriyenko government killed an
unborn child, they say. It was already breathing, jerking its arms,
and kicking. The parents were busily preparing for the happy event:
For instance, this summer Gaydar held an international conference on
the topic "Formation of the Middle Class in Post-Communist Russia,"
and Yeltsin said a few encouraging words in his message to the
Federal Assembly. Faraway relatives were hurriedly buying gifts: The
Gallup Institute conducted an extensive study of the demand for
imported consumer goods. The best yogurt from Bavaria, Aunt Asya's
bleach, Huggies pampers, and hundreds of other goods were flowing to
Russia, equally unneeded by the very rich and very poor, but
essential to the newborn middle class.
Actually, there is also another opinion. According to data
from Boris Nemtsov's information server (!), this summer 42 percent
of surveyed Russians already unquestionably considered themselves
middle class. And since it is so, who said that there is no such
notion in Russian reality? It is another matter that for a number of
reasons our middle class was terribly far removed from the Western
standard.
Let us start from the fact that we all came from "April
Theses" and "Anti-During." A bank employee, a "shuttle trader," a
public relations agency man, a journalist, and a secretary all have
behind them the same unfinished road to the Communist future. We
went to the same schools, equally disliked farina cereal and first
grade counselor Lenka, and our only property was a Sever
refrigerator and a Vyatka washing machine. That in the end one
started work in a bank and the other selling Turkish consumer goods
in the street, and that by their income level they both can be
considered middle class, is nonsense in the eyes of the Western
system.
In developed countries, a baby born in a middle-class family,
as a rule, himself becomes a representative of this social group.
Money is passed on through inheritance, as is the lifestyle: an
automobile, piles of clothes, vacation trips, going to gyms and
parties. The mandatory condition is not only education and a job
bringing in a certain income, but also real estate, which can be
purchased on credit. In short, in the West the middle class is a
much more complex notion than in Russia, where it was decided to
measure everything by the presence of money in one's wallet. On the
other hand, this was indeed the only way to bring to a common
denominator a commentator in the culture department of a major
newspaper and an auto mechanic.
And although sociologists argued over what monthly income
guarantees unquestionable inclusion in this category (Goskomstat
[State Committee for Statistics] suggested $270, the Gallup
Institute--$250, independent Western experts--$350) and what
percentage of the Russian population it comprises (the data here
fluctuated between 3 and 25 percent), we had a middle class. Now we
do not.
For fairness' sake, however, one has to admit that the
authorities never promised anything to "the middle." The
relationship mostly developed by the love-hate principle... At least
two parties--Yabloko and the social democrats--kept saying that "the
formation of the middle class is the most important process" but did
nothing to help this formation. Meanwhile, according to the data of
the NII [scientific research institute] of Sociology, in the first
round of the 1996 presidential elections Yavlinskiy got the votes of
precisely this group of the population. At one time Yeltsin
attempted to gain the sympathies of the middle class, devoting one
of his radio addresses to this subject, but in vain. He had already
marked for tacit approval the government's tax policy that
established a progressive taxation scale. In addition, the
authorities could not resolve the problem of financing: Banks'
exorbitant terms did not permit the middle class to do what it was
entitled to by its status--acquire real estate on credit.
Actually, this was the wrong policy. Intelligently done, the
middle class would be nurtured and cultivated. If for no other
reason than because its presence confirmed the success of the
reforms. If 20 percent of the population starts living better and
happier in the new conditions, this means that we heading in the
right direction, comrades! This means that the remaining 80 percent
simply have not yet woken up and rolled up their sleeves. But we, if
you recall, chose with our hearts, not our heads, and therefore it
is stupid to demand sensible solutions--at least from the President.
Actually, a few days ago it came out that Yeltsin did not know
anything about 17 August and had spent the entire "St. Bartholomew's
night," when Kiriyenko devaluated the ruble and marked commercial
banks' doors with crosses, peacefully sleeping in Barvikha. In the
morning, like everybody else, he woke up and...did not understand
anything. But all he needed to understand was one simple thing:
While in the past Russian citizens were divided into those who had
gained from the reforms and those who had lost, now, as a result of
the August crisis, everybody found themselves flat on their backs.
He who was nobody remained nobody. Those who managed to achieve
something joined the former. Overnight, Russia turned into a country
of no consequence going nowhere. The agony of the middle class, now
in its second month, is the best testimony that the reforms in
Russia have resoundingly failed.
According to forecasts, in Moscow alone by the end of this
year the number of officially registered unemployed will increase by
70 percent and will reach about 50,000. Obviously the real
unemployment rate will be at minimum five and perhaps 10 times
higher. Finance and investment companies already are laying off up
to 90 percent of their staff, newspapers and advertising agencies--
30-60 percent, purchasing firms and retail enterprises--up to 50
percent. These unemployed will provoke the layoff of others: Because
of falling demand for services, tourist agencies and private
laundries, small restaurants and auto repair shops will start
closing. The consequences of unemployment among the middle class
will be most visible in food stores, since it was thanks to them
that the stores kept several brands of sausage and mayonnaise. Now
we have a real chance of returning to the food basket of stagnation
times.
In 1992, when mass layoffs began for the first time at state
enterprises, people could try to find an anchor in the developing
private sector. Today the blow has fallen precisely on medium-size
and small businesses. There is no choice. One can see hopelessness
in the eyes of just recently successful people.
At first glance, nothing has changed in the household of Lina
(she works in an advertising agency) and Andrey (formerly the top
manager of a shipping company). There is fruit on the table, yogurt
in the refrigerator, and for supper--their favorite deep-fried
potatoes and spikachki [larded meat] from the neighborhood
supermarket.
"Mom, I'm thirsty!" six-year-old Pavlik barges into the
kitchen from the other room. "Pour me some juice!"
"Yuck," he drawls disappointedly a minute later, "this one
again? I told you it was not good. Why did you buy it again?"
Only a month ago they were drinking imported Santal. Now they
only have enough for the domestic Sokos, and even with that Lina
says that lately she has been thinking about switching her liquid-
loving son to mineral water: "Grandmother has already started
telling him that Borjom is much healthier for boys playing hockey.
But this ploy did not work. Actually, neither are the adults yet
quite willing to change their accustomed lifestyle. Yesterday in the
supermarket I automatically put spikachki in my cart. It hit me only
when the cashier said the price aloud.
"I was digging in my purse, thinking: 'God, let there be
enough, let there be enough.' It would be such an embarrassment. All
the supermarket staff know me."
Everything happened so suddenly that Lina and Andrey's family
did not have any time to psychologically prepare for the change.
They prefer to not discuss the difficulties at all, although
everybody is aware that currently their aggregate income is R2,400.
This is for a family of six, including three adults, two children,
and a huge dog with a name appropriate for the times--Kris.
"Andrey's company closed at the end of August. He did not even
get his salary. Just $300 consolation money," says Lina. "So far I
am working, but I am paid only what it says in the contract--R2,000,
while before, my main income came from bonuses paid in dollars and
commissions from deals. Another R400 comes from grandmother's
pension. This is all we can count on. It may get worse later--our
agency has practically no clients left, and the question of
additional layoffs may arise any time."
We will not go into the precise figures of Lina and Andrey's
income in precrisis times. Suffice it to say that they could afford
not only vacations abroad and tuition in two private schools, but
also the purchase of an apartment adjacent to their own and starting
a grandiose remodeling of the combined space.
"On one hand, this remodeling saved us," says Andrey, "in July
I pulled all our money out of our SBS-Agro accounts. But on the
other hand, I had different plans. I planned to pay the workers in
August, buy furniture by the beginning of the school year, and start
gradually settling down."
They did pay the workers on time. Not without nerve-racking
efforts, though. The last construction materials were purchased with
difficulty: Prices were rising fast, clerks were refusing to sell
the goods, and so, as in good old times, they had to grease
everybody's palm. And nobody was taking extras in rubles any more
either. Anyway, somehow they finished the remodeling. But there is
no money left for furniture. It is huge European-style apartment--
and suddenly, in the middle of the kitchen, an ugly plastic table on
bent legs.
"We brought it from the dacha," explains the grandmother. "We
were playing bingo on it all summer, so it all cracked. Now we eat
at it. In two shifts. First the children, then the adults."
Instead of carpets--worn-out runners. A lamp on a thin wire.
All the clothes are in suitcases: They had carelessly thrown away
the furniture from the old apartment at the beginning of the summer
so it would not get in the way during remodeling.
"I like the bathroom most of all," says Pavlik. "It is bright
and pretty."
With the children, everything is unclear as well. Both schools
are paid for half a year ahead. However, it is already obvious that
they will not save the necessary amount by December. So perhaps it
is better to pull the kids out of school now, before they got used
to it? So far, however, they have tried to keep "kiddy expenses" at
the previous level. Thank goodness there are still choices, buying
grapes at R15 instead of R30. The adults' personal expenditures had
to be cut dramatically.
Lina had to do without her traditional fall shopping this
year. In the past, she shopped for clothes at Benetton, Sisley, the
British Trading House, and other stores specializing in fashions for
the middle class. Their prices have always been around $50-60 per
item, but this did not seem like much. Today a sweater from
Benetton's latest collection costs exactly one-half of their monthly
budget.
"I remember how the same item only a month ago was selling for
R300. I simply cannot grasp it."
It is indeed hard to grasp. One can read astute articles,
listen to experts--who, it turns out, predicted it all along--and
still understand nothing. This is like the American dream in
reverse: One morning, we woke up poor.
I have to admit that I too fell into the same trap. My friend.
who works at a friendly but competing publication, recently
complained that she could not pay for her apartment. "You have
bought an apartment?" I exclaimed with enthusiasm. "No, I just do
not have enough to pay the rent." We looked at one another, and, to
be honest, I felt chill crawling down my spine.
Some, of course, do not experience any feelings on the subject
of the collapse of the middle class. You can hear all sorts of
remarks in the streets. "They got what they deserved! Now let them
starve like us!" Yes, social justice has prevailed. The buffer that
divided the rich and the poor and allowed the preservation of the
balance of political power in society has been breached. Are the
poor better off for this? Is anybody better off for this? Very
doubtful.
First, the middle class was most conscientious about paying
taxes, reluctantly replenishing the state treasury. The amount of
monthly income tax was more or less equal to 10-15 average
statistical pensions. Which means that one top manager--or, as
people called them, "spoiled youngster"--supported a dozen old
women. Second, the middle class never marched in the streets under
the banners "Give Us!" and "Long Live!"--they had something to lose.
In the second round they unanimously voted for Yeltsin, and the
government of reforms generally could count on the continuing
support of the middle class. Finally, it was the emergence of the
middle class that brought about the development of the service
sphere. Russia was gradually becoming a more or less civilized
country, where one could have a leather coat quickly dry-cleaned,
send flowers to a loved one's home, or make reservations at a
restaurant from a mobile phone. By the way, lately it is precisely
the mobile phone that has become a symbol of the middle class. In
early 1998 there were about 220,000 subscribers in Moscow. Now those
who have already lost their jobs or are expecting a layoff--and,
according to the data of Rabota Segodnya magazine, they comprise 49
percent--are parting with this symbol.
A B-Line operator always asks sadly before saying
goodbye:
"Your phone has been disconnected. Do you want to retain the
number?"
So far, almost no one is saying "No." And this inspires some
hope. It means that they have not given up and are continuing to
struggle. The same Andrey admitted that at first he took it very
hard. Depression, panic, close to hysteria. Now he feels better. He
remembered how he got started four years ago and decided that the
situation now is not much worse. He is an experienced warrior, and,
if you do not start feeling sorry for yourself, you can find a way
out of any situation.
Others count not only on themselves but on the authorities'
support as well. At least the Moscow ones. Because the middle class
had the strongest positions in Moscow. Two weeks ago Viktor
Shenderovich at Itogo staged a sit-in of bank employees and medium-
size and small companies' staff at the Arbat. Well-dressed people
sat and banged their cellular phones and calculators on the asphalt.
The staging was memorable and brought about a result completely
unexpected for our country.
Last Friday, representatives of small and medium-size business
(the heads of about 100 companies were present) proclaimed their
intention to create a political party that would protect the
interests of the middle class. "The crisis has clearly shown that at
the level of the executive and legislative authority, our existence
is completely ignored. Not a single minimally significant social
movement realistically represents our interests. We do not have
lobbying tools, we cannot voice our opinion. Oligarchs and miners,
bankers and the unemployed have such tools, but the most
economically active and creative part of the population does not,"
say the "September Theses" put together by the initiative
group.
Saving the drowning is the business of the drowning... To
participate in 1999 elections, the new party must be registered no
later than December. This leaves very little time; the middle class
representatives are hoping for help from Moscow Mayor Yuriy Luzhkov
who, being "a man of business," should understand their problems and
fears.
In all countries, the middle class has a reputation as timid
and law-abiding, having created for itself the image of reliability
and the bulwark of support for the authorities. Water can be brought
to a boil even on a slow fire, however... In 1930, the middle class,
impoverished in the course of the Great Depression and the
government's faulty policy with respect to small business, brought
Adolf Hitler to power. In a matter of two years, the number of votes
cast for the NSDAP rose from 800,000 to 6 million.
The second encounter with nonstandard behavior on the part of
the middle class in Europe took place after the end of the World War
II. In 1945 the French, having lost their savings, real estate, and
most importantly, accustomed stability, voted in droves for the
Communists. As a result, the United States had to rush in the
Marshall Plan, whose chief, if not only, goal was to help the middle
class recover.
In short, let sleeping dogs lie...
Especially considering that the Russian middle class has
retained all the reflexes of the lumpen-proletariat.
Oksana Dmitriyeva, minister of labor and social
development in Kiriyenko's government: In principle, we had a
middle class. Especially in Moscow, where all the conditions were
created for its emergence and existence. Moreover, in the context of
the capital, where the standard of living is two to three times
higher than in Russia as a whole, one could speak of the middle
class in the Western sense of the word. The crisis hit Moscow's
small and medium-size business--both legal and illegal. Because of
the stupid monetary policy, enterprises that were only just
beginning to function properly found themselves on the brink of
bankruptcy. Will they survive? This depends on how intelligent the
government's stabilization measures are. I think the middle class
will survive, after all. People have not lost their brains or skills
in the crisis. Entrepreneurship in our country has never been easy,
but somehow people overcame the difficulties. They will overcome
them now too.
Sergey Kalashnikov, minister of labor and social
development in Primakov's government: By definition, a middle
class exists in every society. In the Soviet Union alone, it was
huge and comprised 98 percent of the total population: 1 percent
were vagrants and convicts, and 1 percent--members of Politburo and
owners of illegal enterprises. The whole country was middle class
then: a plant director had the same lifestyle as a rank-and-file
engineer. Thus, we had and still have a middle class. And it
comprises a substantial part of the population. This includes all
the self-employed, such as "shuttle traders," and all salaried
employees, that is, workers for hire. Not to mention a huge
administrative apparat--15 million at minimum. The middle class has
not disappeared during the crisis, and will not. The situation we
have now is similar to that of 1991: People have all the necessary
living conditions but do not have money for consumption. The middle
class has housing, furniture, clothes, and the majority--
transportation. This is the most active and enterprising part of the
population. They know where and how to make money. They are socially
active and therefore undoubtedly will survive and adapt to the new
conditions. It is another matter that middle class consumption will
fall dramatically, especially compared to developed
countries.

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#6
Russia Sept GDP down 9.9 pct-Prime quotes Committee

MOSCOW, Oct 19 (Reuters) - Russia's gross domestic product (GDP) fell 9.9
percent in September in year-on-year terms, Prime-TASS news agency quoted the
State Statistics Committee data as saying on Monday. 
Industrial production fell 14.5 percent in September year-on-year, Prime said.
GDP fell three percent in the first nine months of the year compared with the
first nine months of 1997. Industrial production in the first three quarters
fell 3.9 percent and amounted to 1.152 trillion roubles, it said. 
Only four out of 15 branches of industry surveyed by the State Statistics
Committee posted growth in the first nine months of the year, Prime said. 
Agricultural output fell 9.4 percent in Janaury to September in year-on-year
terms, it said. 
September GDP amounted to 257 billion roubles ($16.57 billion), while
September industrial output was 132 billion roubles. Agricultural production
fell 15 percent in September year-on-year and amounted to 53.9 billion
roubles. 
($ - 15.51 roubles) 

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