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Russia: Financial Crisis Threatens Regional Press

Washington, 19 October 1998 (RFE/RL) -- The slow but steady progress Russia's privately owned regional newspapers have made in the seven years since the collapse of communism has been undermined in less than a month by that country's financial crisis.

Across the country, some of these papers have been forced to close. Many more have cut back in size, frequency, and staffing. And still a larger number have been forced to drop links to the Internet and subscriptions to national and international wire services.

Not surprisingly, the publishers of many of them have concluded that the only way they can survive is to make deals with local businesses or seek government support, a conclusion that both of the latter are certain to exploit if the crisis deepens.

Taken together, these developments threaten the survival of freedom of the press across much of the Russian Federation.

That sweeping conclusion arises from the findings of a recent survey released by the National Press Institute, a Moscow-based press watchdog agency.

Last month, that body surveyed editors and publishers across Russia to see how they were coping with the collapse of the ruble, the banking system, and public confidence in key institutions. It reached three main conclusions.

First, NPI found, the privately owned regional press was in trouble even before the current crisis hit. Most faced stiff competition from state-owned monopolies that denied them the necessary autonomy to do their jobs.

Many of these newspapers were and are managed by journalists with little experience in running a business and who had done little to build the kind of cash and other reserves necessary to weather any serious downturn.

And few had been able to attract the kind of advertising revenues that would free them from dependence on either subscriptions or subsidies.

There are several reasons for this: Russian enterprises have little experience with advertising. The country's tax system does little to encourage them to spend money on commercial advertising. And most publishers have done little to develop this market.

Second, the current crisis has already claimed its first victims and will claim more as the crisis continues.

Because so few newspapers had any cash reserves, the impact of the economic crisis was hard and immediate.

Faced with a decline or even complete loss of advertising revenue and dramatically higher costs for paper and printing, newspapers laid off staff, cut back in their print runs, and eliminated subscriptions to major news organizations.

And consequently, even though relatively few of these newspapers have closed so far, the Russian public has lost an important window on the world at precisely the time when it needs one most.

Third, the National Press Institute report suggests, the consequences of this crisis even if it does prove relatively short-lived seem likely to prove far more severe to the future of freedom in Russia than many appear to expect.

By highlighting the volatility of advertising as a source of revenue, the crisis has led ever more publishers and editors to turn back to single businesses or governments for assistance.

That may save some papers in the short run but it guarantees that those rescued in this way will be less free to report the truth in the future.

By underscoring the weakness of the privately-owned press to business cycles, NPI found, the crisis has undercut the authority of the press itself and thus sent much of it on a continuing downward spiral.

And by forcing so many journalists out of their traditional work, the crisis has called attention to something that few in Russia have wanted to take seriously: namely, the intimate relationship between the strength of the market and the strength of the media.

Indeed, the National Press Institute underscores this final point by quoting former U.S. President Herbert Hoover.

Speaking just before the onset of the Great Depression in the United States in 1929, President Hoover said that "Free speech does not live many hours after free industry and free commerce die," a lesson the Russian regional press is learning in a most difficult school.