Jobs time bomb under Yeltsin: Russian government may face mounting social upheaval in coming months as 'dinosaur' state firms are forced into bankruptcy

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The Independent Online
AN IMMENSE factory dominates the ancient Russian city of Kolomna. It builds - or used to build - conveyor belts and heavy machine tools for similarly immense factories in other Russian cities.

In Communist times, Kolomna, 60 miles south of Moscow, was a closed city. A foreign correspondent could not even visit the golden- domed churches, let alone the factory. Nobody cares any more. Last week I walked around the plant without showing any identification.

The factory, which used to employ 30,000, is largely empty. Younger workers have left to make a living where they can. The older ones still come in every day but spend most of the time playing dominoes.

According to official statistics, 1.26 million Russians were unemployed in June compared with 994,000 in January. For a nation of 150 million people, that would seem to be a small percentage out of work. But many millions more are in effect idle, on extended unpaid holidays or short-time working. Workers at Kolomna are fortunate; they are still receiving their wages, however small. Many other workers, including miners, have been waiting for months for their salaries. Some are being paid in kind - in anything from pork pies to crystal vases.

The promising state enterprises are being privatised. But no one knows what to do with the Soviet industrial dinosaurs, some with technology dating back to the turn of the century. Of the many crises facing President Boris Yeltsin and his Prime Minister, Viktor Chernomyrdin, Russia's submerged unemployment has the most explosive and far reaching social and political implications.

As the government struggles to slough off the legacy of Soviet economic obsolescence, it is preparing to use the bankruptcy laws that have been available to it for some time. Over the summer, a handful of small factories have been allowed to go to the wall. The process is expected to gather pace this autumn and winter: it may soon be the turn of the fallen, but unburied, giants like Kolomna.

Optimists say the rapidly growing private and service sectors will absorb the tens of thousands who will be made redundant. Others say this will apply only in places like Moscow and St Petersburg. Disaster awaits whole communities in the provinces that have grown up around single industries.

Mikhail Matveyev, 63, gave his best years to the Kolomna factory but, at the end of his life, he has little to show for it. His son Vitaly escaped working in the plant and went to Moscow to become a concert pianist. Now the local boy made good is even poorer than his father.

Mr Matveyev and his son represent two classes of people - industrial workers and members of the cultural intelligentsia - who are finding it impossible to thrive in a new Russia which seems to value only the ability to make fast money.

Vitaly has been struggling to survive for months, ever since subsidies for the arts dried up. He has tried his hand at business but is temperamentally unsuited to it. 'Not everyone is born to be an entrepreneur,' he says. 'Society needs other professions too.' Last week he returned to his roots in Kolomna; and I went with him. The atmosphere is less aggressive than in the capital, where armed gangsters cruise the streets in obscenely long limousines. At least in Kolomna, Vitaly's father has an allotment which at this time of year is groaning with berries and vegetables, enough to feed the Matveyev family.

Apart from the little piece of factory-allocated land - amid beautiful fields and woods and ponds - and the clothes he stands up in, old Mr Matveyev has few material rewards for the three decades he spent building a 'bright Communist future' in the Kolomna Heavy Machine-Building Plant. He should be enjoying his retirement, but he cannot make ends meet on his pension of 74,000 roubles ( pounds 24) a month. Every day he leaves his rented flat and crosses the tram tracks to work as a lathe operator in the plant for a further 82,000 roubles.

'In the old days, you knew you could pay for your funeral if you had 5,000 roubles but now you need millions to get buried,' he said.

Mr Matveyev's late wife, Yelena, worked in the factory, as did his daughter Natalia, who had an unusual and now utterly redundant job - she painted Communist Party slogans on the walls to encourage the workers. Now Natalia is dependent on her husband, Anatoly, who supplements his factory wage of 270,000 roubles with odd jobs on the side. The couple have two children - Alla, who is studying to be a maths and physics teacher even though she knows the status of teachers in Russia these days could not be lower, and Denis, a troubled teenager

Natalia's slogans still decorate the vast halls of the factory. 'There is only one way for the party and people,' reads one. 'With Lenin we will grow and strengthen year by year.' Another says: 'The successful completion of the 12th five-year plan is a secure guarantee of the growth in workers' living standards.' When Natalia had painted that once, it was enough just to update the number of the plan every five years.

Even as a child, Vitaly was revolted by this nonsense. He remembers being brought to the factory and told by his father that he could press the buttons on a machine if he wanted to. 'Not for anything was I going to press those buttons,' he said. Shortly afterwards the boy who first expressed his musical talent by banging with spoons on a metal washing rack at home graduated to the accordion and then the piano and was set on his path to the Moscow Conservatory. But Mikhail Matveyev believed the slogans his daughter painted. He worked hard and conscientiously and paid his dues to the Communist Party right up until 1991, the year of the hardline coup attempt against the then Soviet leader, Mikhail Gorbachev. 'I was deceived,' he said. And the mockery of the Russian people by those on high is still going on. Mr Matveyev believes the factory still has a future. But the fact is the plant is having trouble finding clients for its production.

The factory has not been privatised. (And thus Mr Matveyev saw no purpose for his 10,000-rouble voucher, which the Yeltsin government awarded to every citizen for buying shares in de-nationalised companies. Instead he gave it to Vitaly, who sold it on the Moscow metro for a few hundred roubles.) Neither has the plant been declared bankrupt, although if the government grasps the nettle this autumn and begins implementing the bankruptcy laws against unviable industries, it will probably be declared bankrupt like scores of other factories across the country.

While the Kolomna factory drifts, the enterprising but dishonest are having a field day. The plant's production has plunged but its use of electricity has soared. Some of the workers are tapping into the factory's energy supply, as well as helping themselves to its raw materials. They run private ventures on which they pay no tax. One of Anatoly's friends is doing this. 'He makes tools and sells them to people in Moscow who make metal doors for the houses of the new rich. Of course he's stealing materials and not paying tax, but can you blame him when the bosses are carting off lorry loads of state property?'

Another worker at the factory, Vladimir Mikhailovich, said it had been months since the management, which used to meet the workers regularly, had consulted them about anything. 'It's in their interests for this anarchy to go on as long as possible,' he said. All of which the older Mr Matveyev finds very distressing. 'It is not right, it is not proper,' he says. 'But it has always been like this in Russia. We have a saying: 'Honest work won't build you a stone castle.' '

Luckily Mr Matveyevhas not been to Moscow lately. The capital is turning into a garish boom town where the rich spend money like water; money mostly accrued by selling the country's raw materials through the back door. In Cyprus and elsewhere in the West, Russian mafia godfathers have been turning up to bank suitcases of dollars. Meanwhile the state budget is tight and there are insufficient funds for a proper programme of social welfare or to support culture, education, health and science.

At the last election in December, Vitaly and Natalia were too dispirited to vote at all but old Mr Matveyev registered his protest against President Yeltsin by helping to send Vladimir Zhirinovsky, the extreme nationalist, to parliament.

Mr Matveyev is far from being a fascist. He is a kindly old man who plays the accordion and keeps budgerigars which fly round his flat and settle on his head. But he had his say through the ballot box. 'I knew Zhirinovsky would not get great power and I certainly would not vote for him for president,' he said. 'I just wanted to shake up those politicians in Moscow, to make them really think about what is happening to our country.'

(Photographs omitted)