Out of Russia: Moscow streets paved with dollars

MOSCOW - The stench of urine and stale vodka which hung over the passage leading to Red Square gave way without warning to the asphyxiating fumes of fresh paint. GUM, the department store whose boast of being the world's largest used to be as empty as its shelves, was being spruced up. But as with the application of make-up, Russians are prone to excesses with the brush, and the smell threatened to drive customers into the polluted air outside.

If it did, it is a pity. For the walls of the greyest store in the universe have become, almost overnight, a feast of colours from warm apricot to turquoise. Its featureless gangways are giving way to rows of stylish boutiques. They are expensive and many accept hard currency only, yet the queues are there, and not at the cheap menswear shop whose goods seem to be fit only for members of the Congress of People's Deputies.

Despite the appalling economic statistics, plenty of Russians seem to have lots of money. And despite the plummeting value of the rouble, Muscovites can now buy almost everything from Mars bars to Mercedes cars with roubles, without hours of queuing. Whatever the government figures show about living standards falling under Boris Yeltsin, people are better dressed and seem better fed than two years ago, when I last visited Moscow. Then you could not buy a box of matches for dollars without connections. Now that money is king, privilege counts for little, and the fruits of the earth belong to the smart, the fortunate and the sleazy.

Money itself is changing, and not just because of near hyper-inflation. Notes sporting Lenin's profile are disappearing from circulation, ushering in larger denominations which show the tricolour flag of Peter the Great fluttering above the Kremlin.

Predictions that Russians would fail at capitalism because they lacked the spirit of enterprise have proved false. On almost every corner in Moscow and every village in the country private kiosks are springing up, competing in a cut-throat world for customers' favours. City squares where a couple of stalls would once display a dozen mouldy potatoes have grown into bustling markets, supplying everything from succulent cucumbers to battered bicycle pumps. Private restaurants are booming; advance reservations accompanied by a bribe are no longer essential.

Whoever the losers of Mr Yeltsin's reforms are, they are well hidden. Beggars sit in subways and stalk the streets, but in no greater numbers than during Mikhail Gorbachev's reign. Not all are genuine. The boy who accosted me in front of the swish Metropol hotel pleading for a dollar - the equivalent of several days' wages - was clearly an entrepreneur. But there is no doubt the reforms are causing great suffering and grave social injustice, though not on the scale alleged by Communists. Nowhere in Moscow will you find the equivalent of London's cardboard city.

The soaring crime rate also mars the country's new beginning, and it is no accident that the Russian words for 'businessman' and 'crook' are interchangeable. Foreigners and the local nouveaux riches huddle together in palpable fear behind security fences and private guards. The experience of stepping for the first time outside Moscow's international airport can be quite daunting. An army of shady characters hustle visitors, and in the melee things can go missing.

Even small-time crooks bear more resemblance to Al Capone than to Arthur Daley. With the police otherwise engaged chasing bribes, businesses are forced to pay protection money to organised gangs. But even now, provided you stay away from the worst parts of the city, it is still reasonably safe to take a stroll in the middle of the night.

As Russians come out of their shells many myths are falling by the wayside. The legend of apathy and political immaturity gave up the ghost in last Sunday's referendum. Paranoia about the West and the conviction that Russians are morally superior are evaporating in the heat of mutual exposure. And Western businesses are discovering that the young generation, unshackled by the indoctrination meted out to their forebears, can work without supervision and can even enjoy the experience.

A new Russia is being born: a nation that is for the first time in history becoming at ease with itself and its neighbours, its daily tedium marred only by the pursuit of video recorders.