Inside Russia

Spanning more than a decade between my first visit to Moscow and a last assignment in Russia's Far East, I got a unique insight in political developments and social conditions during one of the most eventful periods of the old empire. Those were the days that the empire collapsed and market structures replaced the old command economy. Meeting with ordinary people in this vast country, I observed how their life was changing for better and for worse, in the wild days of early capitalism.

When I first checked in at the infamous Moscow Rossija hotel (10.000 bedrooms) overlooking Red Square, 19-year old Mathias Rust had just landed his Cessna 172B airplane near St. Basil cathedral's presbytery. Having eluded the Soviet air defences in a flight from Helsinki, Finland, his landing in the very heart of the Russian capital happened on the Day of the National Border Guards. His exploit looked as an omen for the profound changes at hand.

At that time in May 1987, a train ticket on the Moscow underground would cost you five copecks, salaries were between 100 and 200 roubles a month, and the exchange rate to the US dollar was fixed at 67 copecks. The name of the country was of course Union of Soviet Socialist Republics (USSR) and both state and government policy were in the firm hands of the Communist Party.

At age 54, Mikhail Gorbachev had been elected as secretary-general of the CPSU just two years before, on 11th March 1985. At the 27th Congress in February 1986, he had launched some refreshing ideas on glasnost and perestrojka, without much of a success for the time being as the catastrophic failure of his initial fight against the vodka bottle proved. However, the writing was on the wall - or so we liked to believe after the Reykjavík talks with US president Ronald Reagan on 11th October 1986. In February 1988 Gorbachev announced the withdrawal of Soviet forces from Afghanistan. By the time he was elected president of the Soviet Union on 15th March 1990, stories from survivors in the Gulag camps began to emerge, the Brezhnev doctrine had been given up, the Berlin Wall had come down, the post World War-II division of Europe was broken, and a string of mostly peaceful revolutions in Eastern Europe had sealed the end of the Cold War. Would Gorbi have imagined that the country itself would disappear, less than 24 months after he became her last president?

Things were changing very rapidly indeed. In October 1991, I found myself in Kaliningrad - which had been opened to foreigners (and to Russians) only a few months before. It was an unforgettable experience - speaking to ordinary Russian people at that time, next to the graveyard of Immanuel Kant in the former capital of East-Prussia. Criticizing the slow pace of reforms under Gorbachev, Boris Yeltsin had taken office as the first directly elected president of the Russian Federation on 10th July 1991. Politically, the power shift from 'the Centre' to the regions, was going and after his return from Crimea following the 18th August 1991 putsch, Mikhail Gorbachev was counting his last days as the Union president and party leader. In fact, in November 1991 Boris Yeltsin banned the Communist Party in Russia and after the Ukraine independence, he arranged for the dissolving of the Soviet Union on 25th December 1991. A full three months before Gorbachev resigned and Russia took over the UN-seat as the successor state of the Soviet Union, I saw in Kaliningrad the backyard slot machines appearing and I heard the local call for a reunion of businessmen in what was now named the Hong Kong of the Baltic - the former East-Prussian capital Königsberg of all places.

Life in Russia was very difficult all over the 1990's. According to official Russian statistics, GDP declined by 50 per cent from 1990 to the end of 1995 (During the Great Depression, GNP in the US fell by 'only' 32,6 per cent from 1929 to 1933). By the end of 1995, more than half of GDP and more than 60 per cent of the labour force in Russia were already based in the private sector. The lifting of price controls, the increase of taxes, the unpaid wages due to cash shortages in the enterprises, the initial reduction of government spending and finally the unrestrained credit expansion and rouble printing created chaos and poverty. In 1992, I returned to Kaliningrad, where I found that even the super secret ice-free naval base of Baltyisk was now open for journalists. Extending my journey to Leningrad, which had been renamed Sankt-Petersburg, I recorded very extensively the living conditions of ordinary people in those early days of wild capitalism. In that one year 1992, retail prices in Russia soared by 2.520 per cent, and the two following years inflation increased by more than another 200 per cent per year.

Yet, the worst was yet to come - as I witnessed in 1996 during an assignment both in Moscow and at the countryside. After the failure of the impeachment against Boris Yeltsin and the constitutional crisis of 1993, culminating in the siege of the 'White House of Russia' parliament building, the consolidation of power was sealed in a referendum and the crucial 1996 presidential elections. At the height of the First Chechen war, in the midst of a rouble crisis, in the chaos of a privatization program, after five years of general impoverishment and with most worker salaries no longer paid, I felt the pulse of history when covering the man-to-man fight between Boris Yeltsin and the communist party leader Gennady Zyuganov. Would the communists come back to power after ten years of difficult yet quite radical and far-reaching capitalist reforms? Beyond the high politics, it was a first hand opportunity once again to take the state of mind of ordinary people in Russia - ten years after Gorbachev had come to power.

Looking back on the twelve years I covered events in Russia, the human price for the necessary and unavoidable economic reforms has been very high - indeed a measure for 70 years of mismanagement by communism in the name of the same ordinary man. In the four years between July 1992, when the rouble first could be legally exchanged for US dollars, and June 1996 when the rouble became fully convertible for commercial transactions, the exchange rate against the US dollar had tumbled from 144 roubles to 6.100. Yet, when world oil prices sharply declined in the wake of the global recession that followed the Asian financial crisis of 1997, the 'new rouble' was introduced equalling 1000 old roubles. Less than eight months later, Russia defaulted on her foreign debt on 17th August 1998 - with the rouble losing yet another 71 per cent of her value against the US dollar by the end of the year (ending 1998 at 20,65 to the US dollar). In the following winter, I was assigned to Kamchatka in Russia's Far East where heating had fallen out as scheduled oil tankers did not arrive and power plants had to be closed. My reporting not only revealed what surviving in Russia was alike in 1999 but it gave evidence of how far the vast Russian land had already fallen apart in the first place.