TIME: Almanac 1993/TIME Almanac 1993.iso/time/011689/01168900.031

Text File | 1992-09-23 | 8.9 KB | 165 lines

                a"?                                                          WORLD, Page 33

SOVIET UNION  

Why the Bear's Cupboards Are Bare


    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.