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To: Mike McFarland who wrote (18613)	9/12/1998 8:49:00 PM
From: goldsnow	Respond to of 116791

Barter returns as Russians live hand to mouth By Robin Lodge <Picture> Yevgeny Primakov walks to a meeting with journalists in Moscow BEHIND the walls of Gorky-9, the presidential country residence west of Moscow, Yevgeny Primakov, the new Russian Prime Minister, is spending the weekend with Boris Yeltsin, trying to extricate the country from a financial and economic morass. Mr Primakov acted yesterday to establish his credentials on the international stage by promising that Moscow would pay all its debts. He said: "Russia will not shy away from respecting its commitments. Russia is not a country to declare bankruptcy and never will be." Mr Primakov's confirmation in office by the Duma has averted - for the time being - the political crisis that threatened to bring clashes to the streets of Moscow in a repeat of the events of October 1993. Mr Yeltsin is aware that all he has gained is breathing space. Unless he can introduce measures swiftly to stabilise the situation, the country's political, economic and social structure could collapse. As winter approaches there is a frenzy of potato digging and bottling of vegetables for survival. Barter has largely taken over from cash. Unable to pay their bills, factories hand over their manufactured goods in exchange for raw materials and power. Ordinary Russians prefer to barter in goods because they no longer have faith in a currency that can halve in value overnight. The authorities are attracted to the system because they have run out of roubles with which to pay state workers. Many factory workers are paid with the goods their employers produce and the the streets leading out of Moscow are lined with people hoping to find buyers for pots and pans, cuddly toys or plastic footballs. According to estimates by the Organisation for Economic Co-operation and Development barter now accounts for up to 80 per cent of wholesale exchanges in some Russian regions. Leonid Gorbenko, governor of Kaliningrad province - the tiny Baltic enclave, sandwiched between Lithuania and Poland, and cut off from the rest of the country - declared a state of emergency last week. Dependent on imports of fuel and food which have trebled in price in three weeks, Kaliningrad faces the possibility that it will not be able to feed or provide heating for its population through the winter. Old people have not been paid pensions for more than a month and state workers have not received wages since March. Because of its geographical isolation, the situation in Kaliningrad is particularly acute. Elsewhere in the 89 cities and regions that make up provincial Russia, leaders are defying central government and taking radical steps. Former General Aleksandr Lebed, the recently-elected governor of Krasnoyarsk province in central Siberia, announced that he was introducing an "emergency economic regime" to counter the "paralysis" of political power in Moscow. An investigating brigade of Interior Troops, Federal Security Service troops and tax police had been formed to impose discipline and scrutinise activities of the biggest companies. Mr Lebed is also imposing price controls. He said: "People must not be allowed to become hungry, cold, wild and animal-like. " He warned that if the central government failed to prevent the further slide of the rouble, the regions would start issuing their own currencies. In the Urals region of Sverdlovsk, Eduard Rossel, the governor, issued a plan aimed at preserving the banking system and the local economy. He also issued a decree banning price rises, although this had been widely ignored. Price controls have also been introduced in Omsk, western Siberia, and in the autonomous republic of Chuvashia on the Volga. Aman Tuleyev, governor of the Siberian coal region of Kemerovo, where strikers paralysed the country earlier in the year by blocking the trans-Siberian railway, told staff to disregard Moscow where necessary and unilaterally slashed profit taxes by 40 per cent on local manufacturing industries and lowered electricity tariffs. But Mr Tuleyev insisted that his region would keep up its contributions to the federal budget to preserve Russia's statehood. Kemerovo is one of nine regions that pay into the central budget to support poorer neighbours. There are fears that as the economic situation deteriorates payments could cease, bringing catastrophe to the poorest areas. Mr Primakov said that it was important to quell any "unconstitutional" defiance from the regions but short of ordering the army out, there is little that Moscow can do. The army is also suffering. They rely on barter and troops are sent to work in the fields, construction sites and factories in exchange for food and fuel. In the event of confrontation between Moscow and the regions, neither Mr Primakov nor Mr Yeltsin can rely on the army staying loyal - especially if the choice lay between them and a popular figure such as Mr Lebed. telegraph.co.uk