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Russia continues to struggle


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Spring 2001



In August 1991, as the whole world watched, a handful of Soviet hard-liners kidnapped the president of the Soviet Union, Mikhail Sergeevich Gorbachev, holding him hostage at a Black Sea resort while they attempted to return Russia to communism. Operating under the false assumption that their authority was protected by the historical memory of coercion and terror, these hard-liners had not counted on the dogged resistance of the general population. The country had changed—they had not. In the end, the failed coup sounded the death knell for the Soviet Union and Soviet-style communism and marked the end of Gorbachev's tenure as president of the country and general secretary of the Communist Party.

Aided by his translator, Mikhail Gorbachev answers questions at the October 8 press conference at CSU, Chico.

In 1991, it was inconceivable that Gorbachev would oversee the relatively peaceful collapse of one of the world's last empires. I was struck by the irony that Gorbachev had successfully metamorphosed from Red to Green (as founder and president of Green Cross International) as I listened to his dynamic oratory last October in Laxson Auditorium on the place of Russian history in understanding Russia today. Unfortunately, Russia's metamorphosis has not been so successful; it is still struggling with the detritus of communism's failures and staggering under the weight of a handful of powerful oligarchs.

Nowhere was Soviet communism's failure more evident than in economics and finance. The centralized economic system outlined by Vladimir Ilyich Lenin and created by Joseph Stalin churned out vast amounts of coal, oil, and steel, making the USSR a leading military power from World War II to 1990. But it was an economy of shortages that provided little in terms of goods and services for consumers. By the 1970s, even industrial development lagged. Soviet economic planning was characterized by wasted capital in ill-conceived, protracted construction projects, underutilized productive capacity, squandered human resources, inertia, and growing red tape. Governed by a gargantuan and recalcitrant bureaucracy, the Soviet economy by the 1970s defied all reform attempts.

Social decline accompanied the economic decline. By early 1980, with rising crime, alcoholism, and infant mortality, and falling health care, living standards, and life expectancies, the Soviet population became demoralized and cynical. In fact, so dire was the situation that in 1982, the World Health Organization no longer considered the USSR a developed nation, but classified it as a "fourth-world country." Russians lost all hope for the future.

This was the situation Gorbachev inherited, and the system he tried to reform. In 1985, he launched a program of economic perestroika (rebuilding) in an attempt to transform the state central system to a free market. The method was "shock therapy"—immediate price liberalization and the slashing of state subsidies. The result was hyperinflation, massive unemployment, and critical food shortages. I was living in Moscow in the summer of 1988 as the Soviet Union lurched and jolted under perestroika, and found myself in a world gone mad: Huge grocery stores with row after row of empty shelves, yet street vendors hawking Snickers and Marlboros; state physicists making $36 a month and cab drivers pulling down $1,500 from foreign businessmen; grandmothers begging on the streets for food while young mafia types donned their finery to dine at McDonald's. Nonetheless, people were hopeful and optimistic: Communism had failed them; perhaps capitalism would not.

Within three years, the failed coup brought Boris Yeltsin to power. He was the tough, democratic, reform-minded maverick who became a national symbol of resistance and triumph. Anticipating great changes, I returned in 1992 to live for several years in Russia. I found that capitalism's bright promises had not materialized. In fact, things had gotten inconceivably worse.

Now, Russians are poorer than they ever have been before. Nearly 40 percent of industries have shut down completely, and those still open operate at about 50 percent capacity. In the last seven years, capital flight out of Russia is estimated at between $500 billion and $1.5 trillion. Officials place unemployment at 25 percent, yet actual figures are probably much higher. Average male life expectancy is 56 years old. Tuberculosis and diphtheria are epidemic, while the number one childhood disease is scurvy, owing to poor nutrition.

As Gorbachev intimated in his October lecture, much of the blame lies with the Yeltsin administration, which engineered what economists now refer to as the "great grab"—literally the fleecing of the Russian state by several rich and powerful men. And as Gorbachev also noted, much of Russia's future rests on current president Vladimir Putin and his ability to face down the mafia, take control of the economy, and impose the rule of law on the country.

Can he do it? I do not know. But I do know that Russia will weather this storm also. The great mystery about Russia, and what keeps me going back again and again, is the Russian people. No matter who sits on the Kremlin throne, the Russians have an ability to assimilate a painful, indeed brutal history, and come out the other side astonishingly authentic, courageous, and wry.


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