#10
openDemocracy.org
12 December 2001
Russia changing
By Susan Richards
Susan Richards is senior editor of openDemocracy
The impoverishment, corruption and violence of Russia’s first post-Soviet decade reinforced the fatalism in people’s hearts. In a recent visit to Moscow and Saratov, openDemocracy’s senior editor senses a shift. Political stability, modestly growing businesses, the respect of the West, and a leader who doesn’t shame people, are some ingredients of the mood. The inner change, palpable if not yet widely rooted, says: we can embrace the future and still be Russians.
Ten years ago, when I was setting out on my travels, looking for places which were going to prosper in provincial Russia after the fall of communism, a wise Russian warned me: “Never forget that foreigners come to Russia and expect to see change. But nothing in Russia ever really changes”. The argument was one I knew well: in Russia change never goes more than skin deep; whether the regime be Tsarist, communist or capitalist, nothing alters the Asiatic, authoritarian character of power in this vast, northerly land. I did not argue, but I wanted to prove the man wrong.
The 1990s seemed to confirm that fatalist view. As the economy of the old superpower broke up, its people surrendered to poverty and mob rule. President Yeltsin himself bemoaned that he presided over “a mafia state on a world scale”. In the early 1990s the top twenty-five banks were all controlled by, or involved with organised crime. By January 1997, Russia’s interior minister himself declared that forty per cent of all business was in criminal hands. The following summer, when the market crashed, it looked certain that neither I nor my children would live long enough to know whether Russia was going to be able to change or not.
The hard road to independence
Yet when I returned to Russia recently, my expectations were ambushed once again. I caught a new mood of optimism, one which is mirrored in the stories of two men whose fortunes I have been following for the last decade, Aleksandr and Nikolai.
Both set out to become businessmen after the fall of communism, and both were without capital, connections or any real notion of what business was about. Aleksandr had been a successful Soviet journalist on a national newspaper in Moscow. After the collapse of Soviet power his marriage fell apart, as many did. He had nowhere to live, and no job. He was penniless. Prices, which had risen by only eighteen per cent in thirty years, shot up when the rouble became convertible. With inflation spiralling, his savings melted. He was not young, he had no capital and he had none of the instincts of the born businessman. But he picked himself up and started making documentaries for Russian television. People liked and trusted him, and the business grew rapidly. By 1998 he was riding a wave, negotiating to buy a provincial television network. By now he had bought a house in Hungary, and was just moving into a brand new dacha outside Moscow.
Then, in August 1998 the market crashed and he was left $40,000 in debt. Rather than declare himself bankrupt, his new wife agreed to sell her Moscow apartment and their house in Hungary. The couple moved into his mother-in-law’s one room flat. Living off his wife’s salary, threatened by thugs operating on behalf of his creditors, he resolved to pay off his debts.
Today, he is back making documentaries, almost out of debt, and he and his wife are back in their own drafty (rented) home. He will never be rich, and he will never be a good businessman. But that is the point. The time has come in Russia when you do not have to be brilliant, or a thug, to make an independent living.
Nikolai, on the other hand, did have the instincts of a businessman. Ten years ago he left his job working as an engineer for a military factory in a small country town near Saratov. Together with two friends he started trading in the only product they could afford to buy – chewing gum. Those were the days when the Russian word biznismen was synonymous with violent racketeering. Nikolai was not like that at all. He was gentle and educated and honest. His friends used to fall about laughing when over a drink in the evenings he used to talk about how he was going to become a big industrialist. To them, he was a figure of fun.
He and his friends had nothing like an office or a mobile telephone. From morning to night they spent their time racing around in their battered Zhigulis, dodging the authorities (like everyone else, they could not afford to pay the impossibly high taxes) and doing deals for their survival with the protection racketeers. As soon as he had saved up enough money he bought a machine from Latvia for crushing sunflower seeds into oil. He kept it locked up in a shed, unused. For with inflation still raging, it was still not possible to go into production.
When I went to visit him in 1998, the machine was out of mothballs and Nikolai was supplying sunflower oil to the region’s shops. But he was still living with his wife and two small children in a tatty two-room flat. The only sign of the family’s comparative affluence was that they could afford to eat fresh meat and vegetables from the market.
This time when I visited Nikolai in Saratov I found that he and his partners had become established. One imports goods from Europe; another runs an excellent restaurant and a clothes shop in Saratov, while Kolya’s sunflower oil business is booming. In order to secure more supplies, he has decided to grow sunflowers himself. Unable to rent the small amount of land he needs (land reform being unresolved), he has been obliged to take over a six thousand hectare farm, together with its entire, wretched, workforce. He will turn it round. He is on his way. His family has finally moved into a brand new flat, with a conservatory and parquet floor, and he is grooming his eighteen-year old daughter to take over the business.
What was special about Nikolai was that even when Russia was at its most violent and lawless, he believed in the future. “You may think we’re just ropey traders in cheap goods,” he said to me in the early days, “but you wait – the West is going to have to watch out. The people who come through these years – there’ll be no stopping us! We may have started by lying and cheating off the state – but what else could we do? The state owned it all! That won’t last. Things are already settling down. It’s tough, of course, but it’s such fun! I wouldn’t want to do business in the West. Here you build your own world every day of your life – it’s a game of skill, and there are no rules, only ways of getting through”.
The political wheel turns
Now, up and down Russia, hundreds of thousands of small businessmen and women are beginning to share his visionary confidence. For last year, the country’s domestic economy, which had crashed in the summer of 1998, finally grew by 7.7 per cent. This year this trend has continued, though more modestly, with growth of four per cent. Salary arrears have fallen; real incomes and foreign investment are up; and there is less trade by barter.
The figure who personifies this could hardly be less expected. Eighteen months into his presidency, the “grey cardinal” from the secret services is emerging as someone of whom Russians are proud. For the first time in most of their lifetimes, the country is being run by someone who is neither decrepit, drunken nor deluded (as Gorbachev is judged to have been by his fellow countrymen). Ruthless he may be (who exactly did perpetrate the spate of ‘Chechen’ bomb attacks on civilians in 1998 which served as Putin’s pretext for renewed military engagement in Chechnya?). But few people accuse him of being crooked. He is a modern man, who speaks foreign languages and is perceptibly brighter than America’s President.
In his first eighteen months, he has already clawed back control of the provinces (Chechnya apart), begun to rein in the banks, introduced tax reforms and a more Western European approach to the judiciary. Russia’s own great oligarchs have responded by beginning to invest in their domestic market. Where they have done so in new equipment in farms in the famous black earth regions of the south, for instance, the returns have been good: harvests have leapt by fifty per cent.
Now, everything suggests that Russia will indeed be a great gainer in the global fall-out from the events of 11 September. Putin is using the opportunity to move against the corrupt old guard which still encircles him. Suddenly, the fact that oil in exploitable quantities lies under some forty per cent of Russia’s territory potentially rescues the developed world from its crucial dependency on Saudi oil. Suddenly, there seemed nothing foolish about the rash of articles I was reading in Russia’s national and provincial press which expressed confidence that Western capital would now start preferring to invest in Russia’s decrepit infrastructure, rather than in the West’s own jittery, saturated markets. Some Western investment analysts are saying the same.
On top of all this, the terrorist attacks on America have left the Russians feeling that at last the West has been forced to understand what they have been up against in Chechnya. Even genuinely democratic Russians have been inclined to be impatient with the trail of liberal delegations from Amnesty to Human Rights Watch which have made their way to the Caucasus in recent years investigating their abuses in Chechnya. “You just don’t understand,” they used to say, shaking their heads: “The Chechens – they’re different from other Muslims.” The NATO powers certainly seem to agree.
After the dark decade, cautious patriotism
The Moscow I visited at the end of this year certainly looks a world away from the drab, monumental vistas of the old Soviet capital. The authoritarian scale of Stalin’s city centre is tricked out now with bright Western brand names, gentled with azure and gold onion domes. The militant severity of the capital’s skyline is interrupted by new residential ziggurat in pastel shades, which sprout extravagant conservatories; de luxe hotels, smoked-glass office blocks. Those wide through-ways designed for military parades are now clogged with BMWs. The streets where bulging babushkas wearing medals used to shout at young couples if they necked in public now shimmer with girls in long furs and stiletto boots.
But when I left Moscow for the Volga city of Saratov I was reminded how little the rest of Russia has changed. Saratov is a city of nearly a million people. In Soviet times it was a rich place, a closed city whose industry was devoted to the military complex. Now those factories stand empty, at best small cells live on and are producing something – saucepans, prototypes for combine harvesters which someone, someday might order.
Here too you can see smart new tower blocks going up. You can buy Max Mara and Hugo Boss in the high street and you can eat at delectable restaurants where the waiters treat you with elaborate deference. However, here in Saratov these bright spots do not conceal the poverty, but rather show it up. The only people with the money to shop in such places are local government officials (all living on oil money), traders, and employees of the local tobacco factory, which has been taken over by British American Tobacco. The streets are full of potholes; ex-employees of arms factories, and pensioners (living on fifty dollars a month) creep along them, lethargic from malnutrition.
As for the countryside around – land which a hundred years ago was producing finest hard wheat for the European market – a terrible stillness prevails. Land reform has stalled. Each old collective farm still belongs jointly to the people who used to work it. On these farms no one has paid them for years. The enterprising have long since left. Those who have stayed have reverted to subsistence farming and the bottle.
From the vantage point of Saratov, or of almost anywhere in provincial Russia, does my optimism about change look premature? After all, it is arguable that the achievement of Putin’s first eighteen months only proves the point of the person who warned me against looking for change in Russia. Has Putin not reasserted control by confirming the age-old pattern of centralized, authoritarian power?
Putin himself is well aware of this problem. Just as I was leaving the country, the Kremlin and other branches of government were inviting some five thousand representatives of NGOs to a two-day Civic Forum, to discuss how to create the conditions for the development of a civic society. “Everyone understands that a civic society cannot be formed at the initiative of government officials,” Putin said disarmingly to the delegates. “I think it is absolutely unproductive, practically impossible and even dangerous to try to create a civic society from the top down.”
How indeed can a civil society be created where there was none before? Ten years ago, when the Soviet regime ended, many hoped that its fall would somehow, magically, result in change. Their naivety was understandable. For throughout their lives they had been protected from reality by a regime which had taught them that only obedience deserved to be rewarded.
Now, Nikolai and Aleksandr and others like them have come through Russia’s dark decade believing in change as a practice, not as an item of faith. After surviving in business through ten years of anarchy, these men and women know that the infrastructure of a civil society is what they require in order to run their businesses. They need regulated banks which will hold their money, not steal it, taxes they can afford to pay, law courts which can deliver enforceable judgments, land which can be bought and sold, government officials who can be held to account.
Ever since Peter the Great aspired to turn his backward country into a European power, Russia’s progressives have looked West. They have therefore been caught in a state of almost permanent disaffection with their motherland. To be patriotic has meant to be conservative. Suddenly, to be a Westerniser and to be patriotic no longer feels like such a contradiction.
If I were a Russian, I think that I too would be a cautious patriot today.
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