Russians shell out as cashless society looms

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The Independent Online
WORKERS at a poultry farm in the Russian city of Ulan-Ude have each received four boxes of eggs this month instead of their usual pay packets. It is to be hoped they like omelettes. But they are the lucky ones. Millions of workers throughout Russia have not been paid for several months, as inflation has produced a severe shortage of cash.

In many areas army officers, for example, are waiting for their wages and this week brought news that the crew of a Russian trawler stuck in Fiji plan to sell it because they have received no money for nine months.

In the once closed town of Kirovsk, in the Leningrad region, workers at the Ladoga naval engineering plant are also owed several months' pay. 'Of course they are complaining but they are holding on to their jobs. It is impossible to get work at Ladoga,' an unemployed man told me during a recent visit to the town.

Perhaps fear of unemployment, which experts predict will rise sharply this winter, is holding the wageless workers back from protesting too loudly, though there have been strikes and threats of strikes by some of the highest-paid workers, such as miners and air- traffic controllers. The unpaid are struggling on, making ends meet by borrowing from family and friends.

The situation is, however, potentially explosive. Hardliners, who feel nostalgia for the security of the Communist past, make much of falling living standards at their rallies, another of which was held in Moscow yesterday. The Russian President, Boris Yeltsin, knows of the danger of social discontent and whenever he visits the provinces he takes a planeload of banknotes with him to ensure a welcome by paying local workers.

The cash shortage has developed since January, when Mr Yeltsin launched his economic reforms by freeing prices, causing the cost of many basic items to rise by as much as 100 times. The government, pursuing a strict monetarist policy to satisfy the International Monetary Fund, has refused to print enough money to cover the difference between the old and new prices.

Nikolai Petrakov, an economist, former adviser to Mikhail Gorbachev and a critic of Mr Yeltsin's team, was quoted yesterday as saying the state's debt to the population in wages and pensions had reached 156.5bn roubles (about pounds 490m), or 20 to 25 per cent of total state revenue, by the end of July. 'This is the most barbarian and cynical form of freezing wages and salaries aimed to create an illusion of rouble consolidation,'

he said.

Small change has disappeared, because almost nothing costs less than one rouble. Shops often fob customers off with sweets, or condoms if they are men.