TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/011689/01168900.031

Text File | 1990-09-17 | 9KB | 155 lines

WORLD, Page 33

SOVIET UNION


    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.