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Russia: Regions Scramble To Fight Economic Crisis

  • Floriana Fossato

Moscow, 11 September 1998 (RFE/RL) -- Russia's economic crisis is prompting a shift in decision-making away from the center and toward provinces.

This has become apparent in as governors of some of Russia's 89 regions have announced various emergence plans to cope with the rapidly deteriorating situation in the absence of direction from the federal government.

The plans include setting out commissions to control prices and coordinate deliveries of foodstuffs to hospitals, nurseries and schools.

In regions of Kursk, Yaroslav, Smolensk and Kamchatka, local government officials have set up commissions to control prices and distribution of such basic goods as sugar, bread, flour, salt, oil, butter, milk, eggs, buckwheat, tobacco and petrol. Vendors infringing on the rules could see their goods confiscated and their licenses revoked. In Yakutia, republican authorities have ordered to freeze prices at the level of September 1.

The media reporting from the regions say these measures are unlikely to be effective, however.

"No one cares," said Sasha, who provides foodstuffs to the local market in the Far East city of Petropavlovsk-Kamchatsky. In a telephone interview with RFE/RL, Sasha, who did not want to give his last name, said his biggest fear is that "storage will soon be empty because importers are not bringing anything in owing to the collapse of the banking system that makes it impossible to get money and pay for the goods."

More than 50 percent of goods sold in the Kamchatka peninsula are imported either from the "mainland," as Russia is commonly called, or from foreign countries such as Japan, South Korea, China and the US. Similar situation exists in other regions.

"If we could organize barter deals with other Russian regions, doing the same with foreign countries will be easier, but everybody wants cash, and in dollars, of course," Sasha said.

The media report that most regions are experiencing shortages of basic goods, and people continue panic buying of non-perishable items. Buying at any price and in large quantities of sugar, flour, oil and flour is common.

Everywhere officials say the reserves of basic foodstuffs are rapidly decreasing. The daily "Vremya MN" has quoted officials in Rostov-on-Don as saying that as of Aug.1, reserves were estimated to cover 42 days, but now will last only for 14 more days.

Shops in Murmansk have reportedly run out of salt, cereals, cooking oil, and other basic staples. Local authorities are said to have appealed to neighboring Finland for emergency assistance. The Finnish government reportedly will hold an emergency meeting today to discuss the situation in Russia.

In the Far East region of Primorye, where more than 60 percent of foodstuffs, including fruits and vegetables, are imported from Asia -- particularly from China -- local officials are calling for the establishment of rationing cards to regulate sales.

Vladimir Vedernikov, mayor of Ussurisk, the second largest town in the region, urged the imposition of the state of emergency. Meanwhile in the regional capital of Vladivostok, long queues for bread are reported to have formed. The main local bread producer, "Vladkhleb," said that the reserves of flour in the city would last no more than one week, said the daily "Novye Izvestya."

Rubles are reported by the media to have disappeared from street exchange points in several Russian cities, including Moscow.

In Moscow the monthly minimum wage of 83.49 rubles (4.17 dollars) barely buys one liter of vegetable oil, two cans of meat, and one loaf of bread. Prices for imported foodstuffs have risen 100-500 percent at wholesale food markets in the capital since the beginning of the crisis. Bread and milk prices, that had remained steady in most retail shops, have also started increasing.

The Kremlin said earlier this week that the presidential administration and the country's Security Council have drawn up emergency measures to stabilize the economy and ease social tensions. The announcement is unlikely to affect the situation.