Latest from Fred Weir.
*****
Date: Tue, 18 Aug 1998
From: Fred Weir in Moscow
For the Hindustan Times
MOSCOW (HT Aug 19) -- Russians have endured several bouts
of currency chaos in the past decade, but this week's abrupt
rouble devaluation has left many saying they are angry, bitter
and thoroughly fed up with the government of Boris Yeltsin.
``That man has successfully lied to me for the last
time,'' says Maya Sinkayevicha, a 74-year old professor of
Russian literature at a Moscow technical university.
Ms. Sinkayevicha says she voted for Mr. Yeltsin in 1991
and again in 1996, despite having lost her life savings of 10,000
roubles in the financial turmoil that struck immediately
following the collapse of the USSR.
Her Soviet-era savings were worth about $12,000 a decade
ago but after the raging hyperinflation of 1992, the first year
of Mr. Yeltsin's reforms, it was barely enough to buy a Big Mac
and coffee at Moscow's new McDonald's restaurant.
``We took all that with patience because we hoped that
things would normalize after a period of transition,'' she says.
``But now I don't believe they ever will.''
Last week, as Russia's financial crisis worsened, Ms.
Sinkayevicha says she thought about converting the 8,000 new
roubles she has accumulated in recent years into a safe currency.
It would have been worth about $1,300.
But she says she felt reassured when Mr. Yeltsin went on
TV last Friday, from a government vacation spa in western Russia,
and insisted there was no cause for alarm.
``There will be no devaluation of the rouble, this is a
firm and clear decision,'' Mr. Yeltsin said. ``The situation is
under control''.
Then on Monday the government announced it would let the
rouble sink from 6.3 to 9.5 to the dollar, an effective
devaluation of more than one-third.
Amid the turmoil Ms. Sinkayevicha's bank, like many of
Russia's troubled financial institutions, has frozen all accounts
and won't say when depositors can get their money.
``I'm old and I will die soon, but I'll never forgive
Yeltsin for this,'' she says.
Experts say the most vulnerable are middle class people
like Ms. Sinkayevicha, who have decent jobs and incomes but
cannot protect themselves from the impact of rouble devaluation
the way Russia's handful of new rich, with their offshore bank
accounts and solid property, are able to do.
``The middle class was our hope to become a normal
society,'' says Igor Bunin, an analyst at the independent Centre
for Political Technologies.
``But it's exactly these people, the professionals, the
small businessmen, and skilled workers who will suffer the most
from rouble devaluation''.
The rouble's plunge will bring rapid increases in the
price of goods which must be purchased in hard currency, such as
imported cars, computers, appliances and foreign vacations.
In Moscow, where Russia's new middle class is heavily
concentrated, an estimated 60 per cent of all consumer goods on
the market are imported.
``Russian industry doesn't produce much worth having, so
people dream of all the Western goods they see advertised on TV.
As of today, they're going to have to dream at least 30 per cent
harder just to keep their hopes alive,'' says Mr. Bunin.
Pyotr Grishenko, 31, who operates a small shop selling
pirated computer software in downtown Moscow, says he is facing
bankruptcy.
``I have to pay for my stock, which comes mostly from
Bulgaria, in hard currency. But the market is so tight these days
that I simply cannot afford to raise prices to compensate for the
devaluation,'' he says. ``So I think I'm finished.
``Thank god I have no savings to lose.''
But many poorer people, who have been living on the
subsistence line for years, say they couldn't care less about the
fate of the currency.
``I have no roubles anyway, and there is no way to make
life worse for me,'' says Igor Vartazanov, a 29-year old day
labourer. ``If the rich geese are getting plucked and are
squawking about it, that just makes me laugh.''
--
Gregory Schwartz
Dept. of Political Science
York University
4700 Keele St.
Toronto, Ontario
M3J 1P3
Canada
Tel: (416) 736-5265
Fax: (416) 736-5686
Web: http://www.yorku.ca/dept/polisci
