1992: Shock Troops (part 1).
We were ushered into a large dark auditorium located in one of Stalin’s wedding- cake buildings. A group of Russian officials headed by the deputy Foreign Minister gave speeches to a sleepy jetlagged group of Peace Corps Volunteers. They thanked us coming to Russia in these arduous times and they disavowed the rumors that the US Peace Corps was a CIA front. The Los Angeles Times referred to us as “Shock Troops” sent to Russia as part of an economic aid package from the US. The Russian officials emphasized that this group of PCVs came to help Russia develop its battered economy, not to build wells and teach hygiene in a Third World country!
Peace Corps Volunteers and their counterparts
attending an investment conference on the Volga, July 1993
Fifty PCVs would be assigned to the cities along the Volga such as Nizhniy Novgorod, Samara, Saratov and Togliatti. They were a high-powered group that included the graduates of Harvard, two from University of Chicago, three from Kellog, fifteen bankers, lawyers, a couple of PhDs and me, a CPA with a couple of Masters degrees.
During the months prior to our arrival we had read that Russia was moving towards boiling point. Yegor Gaidar implemented a shock therapy for the Russian economy which meant the prices of goods were no longer controlled and the value of the rouble was no longer kept artificially low, inflation for the year was 2300%. GDP in 1992 had decreased by 19% and would decrease by a total of 48% during the years 1992 to 1996. The Western press was full of stories about Russian shops with empty shelves, and long lines of people waiting to buy sausages. I recall a story about a sign in the Producty that said, “There is no meat and there won’t be any”. The day I left Chicago for Peace Corps training in November 1992, tank movements were reported around Moscow in anticipation of a coup. I wondered what had I gotten myself into and how will I survive in Russia.
When I arrived in Saratov ( a military industrial city that was closed until 1992) I saw no evidence of starving Russians or long lines. The markets were full of fruits, vegetables, eggs and meat. Trucks containing Snickers, soap and other Western goods were parked at the markets and Russian consumers had a choice of more than one soap or toothpaste (Russian toothpaste also served as caulk for bathtubs). I recall that in the meat section the butcher wielded a huge, medieval axe to dismember the poor cow. By late 1992 the ”chelnoki “ (shuttlers) were highly visible at airports and train stations. These people would make trips to places like China, Turkey and Poland. They left home with empty bags and returned with bags stuffed with clothing, leather goods and many other items. This was the beginning of a retail market in Russia.
I remember that making a phone call home was quite an ordeal. Peace Corps training was held at a sanatorium in Saratov located on top of a hill covered with ice. First I had to negotiate a kilometre of ice that led down to the tram and into “tsentr gorod.” At the ”pochta” I reserved a time for my phone call at least three days in advance. On Sunday morning when I arrived I paid and received my 10 minutes on the phone and was cut off in mid-sentence.
The Russian people were supportive of the Peace Corps and regularly invited us into their homes. It was there I learned how people coped. Many had dachas which were not simply used for relaxation. In almost every home I visited, the balconies were full sacks of potatoes, cucumbers etc. Most Russians had a big freezer filled with frozen berries, cherries and other items grown at the dacha. Kitchen shelves were full of jams, pickles and “kompot”.
During the Soviet period, money was virtually useless. Soviet citizens had lived their lives in endless informal barter deals. People gave “gifts” to get anything from a nice cut of meat to western cosmetics. These gifts usually weren’t monetary. They ranged from theater tickets to supplies of scarce goods. I knew a number of doctors who traded their services for meat. Russian production plants refused to fire their employees and simply asked for more credits from the state or paid wages late. Many companies paid their employees in goods. The road between Samara and Togliatti was full of people selling towels, glassware, bras and whatever their companies gave them as payment for their services. Fresh fish was readily available on that road and could be purchased directly from the fisherman.
In these early years of Russian capitalism barter was a way of life that helped people cope on almost every level. As a result we never witnessed the kind of crash that had been predicted by the Western analysts. I know, I was there, I witnessed how Russia muddled through its first economic crisis.