Russia Goes Post-Yeltsin

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The Yeltsin era is over and Russia's future is uncertain. Prospects for economic reform are bleak. Whether or not Yeltsin remains in office, power will be in the hands of Viktor Chernomyrdin's unlikely coalition of technocrats, Communists and tycoons. That new administration plans to revive price controls and other Soviet-era economic mechanisms that may well smother what's left of the county's infant entrepreneurship.

But while the current financial collapse may cause panic outside the country, for Russians life goes on as usual. The manufacturing sector, after all, failed from the start: State-owned factories -- churning out goods that people no longer wanted -- were unable to adapt to a market in which consumers had a choice. "Much of the country has lived, literally, without money for years," says TIME Moscow bureau chief Paul Quinn-Judge. "The meltdown in Moscow is simply bringing it into line with the rest of Russia." By comparison, consider China's transition to capitalism: The Communists never relinquished tight political control but transformed its manufacturing sector into a producer of goods -- Nike, the Gap and much more --- that Western consumers want to buy. (Name one big-brand-name product that's made in Russia.)

The only certainty under Chernomyrdin's coalition is that things will get worse before they get better. But after surviving seven grueling decades of communism and a Nazi invasion that killed 20 million people in only four years, it's not surprising that Russians greet news of financial collapse in Moscow not with panic, but with a resigned shrug.