Can Russia survive the horrors that lie ahead?

I am now deeply pessimistic about the Russian future and feel sorry for the Russians
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The Independent Culture
"MOSCOW IS like Mahagonny," says a friend - jazzy nightclubs, whores who can talk about Bulgakov, endless deals and a lot of money in suitcases. It has become the most expensive city in the world, where the hotels cost more than in Paris. This happens because there are not nearly enough competing hotels; because anyone trying to open a hotel that is sensibly priced can just be killed, or forced to pay protection money at such a level that the prices are forced up again. The children of the people who make this sort of money, incidentally, now attend language schools at Oxford, to such an extent that the taxi drivers there tell me that the foreign language they most often hear is Russian.

This is not surprising, because some Russians have made an enormous amount of money in a short time out of the process of de-Sovietisation. The exports of Russia may be somewhat less than those of Denmark but, if you are in charge of an essential process along the way, you can become quite rich, without tax, quite soon.

And then there is the Western money that goes in, for alleged stabilisation purposes. There is quite a lot of that, and each time interested parties in Moscow note that Japan, or South Korea, or Thailand, gets a hand-out, their ears prick up, and they can stage a crisis, too. That way, another $21m can be guaranteed to go in, to prop up an allegedly convertible rouble, the future sale of which ,at a much lower level can be organised. Moscow itself gets about three-quarters of the money that is invested, and it is a wonderful place to be if you are a young Western professional of some sort; it has the sinister charm of Weimar Berlin in the Twenties. And Weimar is where Russia is now heading.

In the Moscow traffic, you do not see it; in fact, you could pretend for quite a number of years that Russia was only going through a sort of Wild West capitalism, the sort that lifted America away from her small- town New England origins in the later 19th century.

This was always to forget two essential things. In the very first place, there were limits to the Wild West in the US; there was a sheriff, and, in the end, there was a Wells Fargo. And, beyond the Moscow ring road, there was a horrible life that did not make the obvious media. The statistic that truly deserves attention is this one. The average age of death of an adult male in Turkey is 68. In Russia it is 54 and going down. Yet Turkey was, once upon a time, the ultimate third-world country. Nowadays, she is host to 2 million Russians, fleeing their country's woes.

The present crisis shows that the ultra-shallow roots of Moscow's prosperity have reached the dry underground and are collapsing. Take a casual glance at Internet reports from Russia; every day brings its little catalogue of woes that, for a modern country full of intelligent people, are surreal.

In the far east there has been a long strike of ambulance men. The delays of delivery of coal to power stations is such that the coal has gone off in quality; the power-stations cannot, therefore, operate on existing lines, and so the power goes off. Once winter gets under way, we may well be seeing what some of us have expected these past few years - a black-out in Russia's cities. Which means that refrigerators will be switched, which means that the food which people freeze and depend on will go off.

At the moment, the mass of Russia's people depends on the things that they grow on allotments, much as in Germany after 1945. If these things rot, then starvation follows.

In fact, Russia's cities may be in for the sort of horrors that affected Bucharest in the bad old days of Ceausescu. Then, whether gas came on and off was unpredictable, and people sometimes forgot to turn off their stoves when the gas was still at the "on" position, and were killed when the stuff poured out again.

All of this has now affected the economy-as-seen-from-Moscow (and from abroad). I quote from the Wall Street Journal: "The Russian stock market has... shrunk to roughly $20m, about the size of a medium-sized S&P company"; "On Thursday, the yield on one-month Russian government Treasury bills jumped to an annual rate of 210 per cent... At one point, the price of dollar- denominated Russian bank loans was only slightly above the equivalent securities for Bosnia and Cuba, which doesn't even pay interest on its bank debt."

We are talking, here, of a country with magnificent material resources. What has happened?

A stock-market crash would, of course, have been par for the course, had we been dealing with an ordinary "emerging market" - these things happened again and again in the US, a century ago. But such crashes occurred against a background of tremendous economic growth, burgeoning population statistics, a flourishing of good schools, of trade. None of these "real" things has been occurring in Russia; quite the contrary.

There, Communism had three generations in which to kill off everything, except a capacity for withstanding misfortune, and an acceptance of death. The horrible thing was that the kind of people who knew how to profit from Communism were lowest-common-denominator men, intelligent enough to "play" the West, and able to get thousands of millions of dollars from it, by a sort of blackmail: nuclear weaponry sold abroad, or else.

They encountered a feeble-minded generation in the West which, since the oil-shock of 1973, had been dealing with detente, and who assumed that if you were nice to people, they would be nice back.

What we have in Russia is a group of people who grew up with the idea that capitalism was by its nature nasty and greedy, that short-termism would reign, that the history of the US is just a matter of ripping off innocent immigrant gulls, and that if Russia, allegedly turned democratic and "capitalist", can just show what capitalism really means - immiseration plus Mahagonny - then Lenin will have been shown to have been right after all. These same people expected that eastern Europe would just implode into endless little minority squabbles.

The present Russian problem is a terrible mess, and it will go on and on. I am now deeply pessimistic about the Russian future, and am very sorry for those many Russians whom I enormously like.

If, even after this, you wish to put money into Russia, I have a suggestion: buy Tatarstan. Russia started in 1562, when Ivan the Terrible captured Turkic Kazan. Turkey and Poland, the victims of Russia's rise, are back on the map.