TIME: Almanac 1990s

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<text id=89TT0160> <link 90TT3140> <link 90TT1175> <link 89TT3170> <title> Jan. 16, 1989: Why The Bear's Cupboards Are Bare </title> <history> TIME--The Weekly Newsmagazine--1989 Jan. 16, 1989 Donald Trump </history> <article> <source>Time Magazine</source> <hdr> WORLD, Page 33 SOVIET UNION Why the Bear's Cupboards Are Bare </hdr><body> Nearly four years ago, Mikhail Gorbachev pledged that the payoff for perestroika (economic restructuring) would be an increase in the quality and availability of consumer goods. So far, to the profound distress of Gorbachev's supporters and the growing impatience of Soviet citizenry, precisely the opposite has taken place. The arrival of the new year, traditionally a time of gift giving and feasting in the Soviet Union, served only to highlight the burgeoning list of products that are hard to find, rationed or simply unavailable. Even Gorbachev sounded dispirited over what has turned into the most severe consumer crisis in recent memory. "Perestroika gave rise to great expectations in society," he noted in his New Year's message. "But changes are not coming as fast as we would all like them to." That assessment, if anything, understates the level of disillusionment. Soviet products that have often been in short supply, like meat and butter, are scarcer than ever this year. In the Russian Republic, the Soviet region that is home to about half the country's population, meat available at state stores is so scarce that 1 out of every 3 consumers obtains a ration card to ensure a supply. Now, however, everyday items like good shoes and toilet paper are also missing from the shelves. Shoppers in Moscow are queuing for laundry detergent, and last week the capital was virtually bereft of gasoline. Nor do the shortages seem to lend themselves to quick solutions. When sugar suddenly grew scarce 18 months ago, most consumers blamed Gorbachev's antialcoholism drive, which diverted substantial quantities of the commodity into home brewing. Authorities have somewhat relaxed their original strictures on liquor production, but sugar is still rationed in 67 of the Russian Republic's 86 administrative districts. Other goods that are frequently hard to find: good cheese, coffee, chocolate, fresh fruit and bath towels. "Fruit and vegetables have always been scarce in the Russian winter," said a gray-haired man shopping on Moscow's Kutuzovsky Prospekt. "But it's worse than ever this year." "The planners of perestroika are baffled," says Marshall Shulman, professor emeritus of Russian studies at Columbia University. "They don't know how to proceed because they found the economic situation far worse than their worst expectations. They are searching for new ways, but without luck so far." Price reform, perhaps the key element in perestroika's ultimate success, has been postponed until at least 1990. Glasnost has made the shortages seem even more acute. Soviet publications have lately devoted page after page to the plague of consumer shortages, documenting their intensity in editorial columns and letting readers vent their rage in letters sections. "Shortages attack us literally from all sides," complained the daily Vechernyaya Moskva. "It seems that soon it will be difficult to name an item that doesn't fall into a shortage category." Perhaps the most damning indictment of the Soviet economy was published late last month by economist Alexander Zaychenko in the monthly journal of the Institute of U.S.A. and Canada Studies. He charged that Soviet food products, housing, health care and consumer goods are not only poor in quality but also among the most expensive in the world in terms of the labor needed to produce them. As for the Soviet diet, which contains 28 lbs. of meat annually, according to official figures, Zaychenko scoffed that 10 lbs. of that is actually lard and bone, and calculated that the average Soviet eats only about one-third as much meat as the 55 lbs. consumed by an average American. In a comparison that might have cost him his job not too long ago, the economist asserted that the people of the Soviet Union today have a worse diet than the Russians under Czar Nicholas II in 1913, a year of prosperity before World War I and the October Revolution. As usual, the burdens created by today's shortfalls are borne unevenly. The Soviet elite has always had access to luxury shops, and even many ordinary Soviets buy groceries through factory and office outlets that offer a wider selection than is available in state stores. But not all rubles are created equal: a top Soviet bureaucrat can buy a food package that may include canned crab, high-quality cheese, imported hard salami and lean meat. For a factory worker, the package would more likely contain chicken, less desirable cheese, domestic sausage and canned fish. Even some of the artful dodges developed by resourceful shoppers over the years are proving unreliable in the current crisis. "I've always bought meat on the black market at a premium," says a well-off Moscow writer. "But now I'm having trouble getting meat anywhere. Even the larder of the black market is growing bare." The Soviet Union's winter of discontent is caused partly by the predictable functioning of the capitalist law of supply and demand. Soviet salaries have risen an average of roughly 8% over the past three years. Meanwhile, production of big-ticket consumer items like refrigerators and automobiles has been increasing at a much lower rate. As a result, says Yuri Luzhkov, chairman of the state committee responsible for Moscow's food supply, "people are investing their new money in food" -- and, in the process, creating the current spate of product shortages. Jan Vanous, research director of PlanEcon, a Washington-based think tank, agrees that Soviet supply and demand has gone seriously out of kilter. "By allowing increased purchasing power and providing nothing more to spend it on, the authorities have created a mind-boggling situation," he says. Economic planning seems to be in disarray. Pricing officials announced two weeks ago that state subsidies for such consumer goods as fabrics and some appliances would be modestly increased. But the plan contradicts Gorbachev's announced intention to make prices reflect the true costs of production and to curtail subsidies. Last week authorities unveiled new rules barring private cooperatives from engaging in certain kinds of businesses -- for example, selling jewelry and renting videos. Only five days before these restrictions were announced, Gorbachev had called for a "stronger cooperative movement" during 1989. Last fall, for the first time in two decades, the Soviets stopped publishing monthly economic statistics. Soviet economic planners not long ago discussed making the ruble a convertible currency. That would undoubtedly involve a massive devaluation of the Soviet currency, which is worth $1.60 at the official rate and about 20 cents on the black market. More recently authorities have said it will be at least 15 years before such a move occurs. Some Western analysts have suggested that Moscow should spend some of its estimated $80 billion in gold reserves on consumer products from the West. But Soviet officials have long held that any dependence on the West would be a dangerous precedent. Partly to mollify frustrated Soviet shoppers, authorities last week announced new restrictions on the export of Soviet appliances by visitors from abroad. As a practical matter, the rules will affect mainly East Europeans paying for their travel with other soft currencies who sometimes find in the Soviet Union products that are scarce at home. Western visitors and residents will continue to have access to a wider selection of consumer goods than most Soviets enjoy at stores called beriozkas that deal only in much desired hard currencies. The Communist Party newspaper Pravda pinpointed yet another reason for the empty store shelves. In a story accompanied by photos showing tons of consumer goods -- from TV sets to champagne to vegetables -- piled uselessly in railroad stations around Moscow, Pravda left the impression that the backup was caused by sabotage, presumably by freight handlers or other workers. Soviet officials issued a denial but in the process inadvertently indicted the whole system of transporting goods. The stockpiles, they said, were the result not of deliberate disruption but of poor management and lack of delivery trucks. "I know this problem well," said Luzhkov, growing red in the face when asked about the Pravda story. "There isn't the slightest smell of sabotage. It's the usual disorganization." Most Kremlin watchers in the U.S. believe that Gorbachev is still backed by the Soviet military and security establishments, whose officials realize that perestroika is vital to maintaining their own long-term primacy. But Gorbachev cannot expect to hold on indefinitely without delivering some tangible results from the policy on which he so boldly staked his political future. </body></article> </text>