Two Russian Economies

Part 2

Link to part 1

The Hermitage is filled with familiar European art. The Russian Museum in St. Petersburg is filled with Russian art, and while there are many similarities, we were mostly struck by the differences, and the fact that we'd heard of almost none of the artists. We've mostly written Russia out of the history of the West, and vice versa.

The politics of Russia changed 10 years ago, with the demise of the Soviet Union, and perestroika. It would seem that freedom of expression has brought significant change as well; both the English language periodicals, The St. Petersburg Times and The Pulse seemed remarkably candid in their observations and criticism of current events. I can't say anything about Russian language publications, but I expect they cover an even wider range of opinion.

Detail of pulpit, Catherine's chapel on Peter & Paul fortress
Catherine's chapel's pulpit
(Link to 43 kB full image)

Culture changes much more slowly, and in our visit to the city, I found myself trying to piece together what I could see in 1999 in the context of 1, 10, 50, 100 years past. Through the hot and cold wars of the last two centuries, the people of St. Petersburg have preserved the artifacts of the aristocracy. The most visible contrast between wealth and poverty is not between "haves" and "have-nots," but between hads and have-nots.

Catherine the Great's collected wealth and glory is still there to see, but it's now a public treasure. Russians can get in to see it for little or nothing, and the only return on their investment is that they can charge foreign tourists a substantial bit of money to visit. The highest admission charge for a Russian to the Hermitage is 15 P., I think, but if you can't ask for your ticket in good Russian, you pay 250 P., $10.

That wasn't our first introduction to "foreigner" pricing, though. We took a canal boat tour on our first day in the city, and signage on the ticket booth had a large part in Russian (with a few numbers), and a small part in English. From the former, I could see the price was 40 P., in spite of the fact that the latter said 80 P. Handing a 100 P. note in and making the famous "two" hand signal, brought a stream of impatient Russian, and emphatic pointing to the lower sign. Ok, Ok, 80 P. for each of us, here's 2 100 P. notes.

The boat was half full of Russian children on the edge of adolescence, a few adults looking after them, us, and a half-dozen other English-speaking tourists, with a knowledge bilingual member who explained the sites to them.

We couldn't quite hear her over the drone of the motor, and the nearly incessant, and amplified voice of the Russian tour guide.

Scene on Nevsky Prospect
Scene on Nevsky Prospect, detail
(Link to 108 kB full image)

Shopping in a compact grocery store along Nevsky Prospect, my rouble addition came up about 20% short of the total we were charged by the clerk working the cash register, under the watchful eye of "the supervisor." Jeanette's handling the produce was sharply frowned upon by the third member of the staff, a young woman in a nice dress and substantial black platform shoes, whose job was apparently to fetch and weigh the produce.

And another mystery: the receipt spit out by the register, after the money was paid and change given, and the goods in-hand, was carefully folded, and given a little tear before being handed over. (Here's my guess: in the "old days," you queued up - although a "Russian queue" seems a bit of an oxymoron these days - for groceries, and identified what you wanted. You were probably informed what of that you could actually get, and then paid for it, and a receipt generated. The receipt was passed on to the stock pickers, who filled your order, and you picked it up, with the receipt carefully defaced to indicate the goods were received. It doesn't work that way any more, but presentation of an undamaged receipt would be expected to accompany a demand for delivery.)

For the most part, our shopping did not have a "foreigner markup." A 1.5 liter bottle of drinking water (we did not test the potability of the tap water, on guide book advice) with a label of 10 P. on it cost 10 roubles, just like it said. A bottle of local beer cost 9 or 10 or 12 P., as labeled. Other than tourist attraction entrance fees, which almost all had a "special" price for non-Russians, things in the gift shops (typically sprinkled throughout the museum, rather than confined to one or three opportunities at the entrance or exit) were priced as marked, for everyone. And of course, a token for the subway entrance, go anywhere for as long as you could stand, was just 3 P. (I never did find out how much we could've saved with 10 ride cards.)

In our hotel room mini-bar, the 1 liter bottle of drinking water was offered at $4, as I recall, with bottles of the exotic import beer, Miller Genuine Draft, only $3. (We never did get that mini-bar fully stocked - it was short a box of juice and the vodka bottle when we arrived, with the juice replenished after my notice to the front desk. Out of vodka? Too hard to keep from being stolen? Don't know, but they didn't try to charge us for a bottle a day, especially after I notified them a second time, and they sent a clerk up to look in the 'fridge and say "I see.")

It's illegal to pay (or accept payment?) for things in dollars, but it's not illegal to price them in dollars. At the Grand Hotel Europe, where subtle discretion is the watchword (there are metal detectors at the entrances), the prices are in "units." For our visit to one of the restaurants there, "units" happened to be equal to 24.31 roubles, coincidentally the same number of roubles in a dollar on the day's currency exchange.

The Two Economies

15 cents for a great big loaf of bread.
I suppose it's another cultural-economic artifact, but bread in Russia is incredibly cheap. Was it subsidized? Is it still subsidized? How would a subsidy make its way to a little kiosk outside the Pushkin Ploschad Metro station, where a big loaf of Russian rye bread, weighing in at over a kilo, cost us 3 roubles and some kopeks?

Most everything away from the "dollar zone" was similarly inexpensive when figured in dollars, from an American point of view, although nothing quite as striking as that loaf of bread.

I was tempted to calculate costs in loaves rather than roubles or dollars.

A police captain's salary of 1000 roubles a month would be 300 loaves of bread, for example. Not great, but that sounds a lot better than $40, or about $2 a day. It's not surprising that cops on the street pull over cars for minor infractions and extort a bribe; it is surprising that there aren't more of them doing it! Maybe it was just too busy where we walked.

Yet in the dollar zone, prices were what you'd expect in most any sizeable European or US city: $140/night at a high quality hotel, $30 for a cab ride to the airport, $15 for a light snack and beers in a restaurant.

The first cab we priced was the one from our hotel to the airport on our last day, and I was prepared for 3 or 400 P., based on 3 days' experience. In response to my observation "that sounds much too expensive," I was presented with a printed chart showing the cabfare to various destinations. It was right there on paper, $30, so no point in negotiating, eh?

Neither our driver nor his comfortable car had any special insignia, and it didn't bother us, particularly. How many different people would get a cut of our 750 P.? Split between the hotel and the driver, I suppose, and a damn good day's work for him at that.

I can't give you a description that will make it clear just how dire the Russian economic situation is. You have to see the place to be able to understand the statistics. The variety of beggars, street musicians, scam artists with enough English to sell a guided tour of some attraction, amplified touts, and young entrepeneurs with pushcarts, a few feet of shelf space in an underpass, or a kiosk outside a Metro station is an experience, not a dry catalog.

Inside the dollar zone, money flows like tap water. Outside it, there's a mad scramble for rouble coins and 10 P. notes, and nothing goes to waste. We saw a woman checking the trash cans for ice cream wrappers that had a bit left on them, and carefully licking them clean. The ice cream bars cost 5 or 6 P., less than 25 cents.

Coming out of uniform
Maybe we should have flown Aeroflot

Soviet-style communism had egregious faults, but in an economy that's bad and getting worse, it's far from clear that capitalism is working. There's an incredible gulf between the small tourist economy, and the millions of people trying to make a living in St. Petersburg. The St. Petersburg international airport is less than half the size of the local airport in Boise, Idaho.

The remnants of bureacracy cling to their fiefdoms, and cannot imagine the connection between an arcane visa process and limited tourism, for example. The sprouting of ATMs have subverted the careful control of currency exchanges; the declaration form we dutifully filled out in excruciating detail on entry was meaningless scrap paper to the clerk at the airport on our way out, the formal document for our exchange of 392 roubles to $16 a quaint souvenir.

I'm not an economist, certainly, and a 4-day tourist visit is hardly meaningful research. So what's the point of this? An interesting bit of travelogue, perhaps, and maybe a hint of big things to come, as the powerful forces of economic dislocation bring a country that was once the core of a "Superpower" out of the 19th century, and into an unpredictable future.

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June 26, 1999

Tom von Alten      tva_∂t_fortboise_⋅_org

Saturday, 26-Jun-1999 11:00:00 MDT
http://www.fortboise.org/tworussias_p2.html