Reform Must Embrace All Of Russia

The picture that Sonni Efron gives in today's paper of unrelieved gloom and hopelessness in the dying Urals steel town of Lysva is a timely reminder that Moscow, for all its lawlessness, corruption and general dilapidation, is an island of prosperity and opportunity when seen from elsewhere in the country.Lysva may be an extreme case, but it is hardly atypical. The collapse of Russia's overmanned, overprotected, and inefficient state industries has appalling repercussions for most Russians who, unlike residents of Moscow, have no hope of getting jobs in new private companies.Nationwide unemployment is officially estimated at around 8 per cent, although the real figure may be double that if the unregistered short-term unemployed, such as the millions of workers put on indefinite unpaid vacation, are taken into account.Industrial output is estimated to have fallen by more than 26 per cent in the first half of this year, a record slump after declines of 16 and 18 per cent in 1993 and 1992 respectively. Even granted that these figures are unrepresentative because they do not take into account Russia's burgeoning private sector, they are all too accurate for towns like Lysva.About a third of Russia's population is now thought to be living at or below the minimum subsistence level.If all these factors were spread evenly across the country the effects would be serious enough. But concentrated as they are in the dying industrial centers of the Soviet era, they are catastrophic.What can be done about it? If Russia is to establish its place in the modern world, it must endure the pain of transition and not shy away from the task. To continue to prop up defunct industries producing goods that nobody wants with raw materials that cost more than the final product is not the answer.Eastern Europe has shown that the corner can be turned, although the scale of the task there is small compared to Russia's. A functioning market remains the only worthwhile goal to strive for.Yet it could be disastrous for the government to turn its back on towns like Lysva. Poverty and hopelessness are a recipe for political instability. People in the provinces must be shown that prosperous Moscow has not abandoned them and that efforts are being made to improve their lot through investment drives, retraining, and special projects. The alternative is to hand over the Russian heartland to ultranationalist fantasists, who can confidently promise the world without having to work out how to deliver. Generations of Russians have already been lost this century to an ideology that led them nowhere; it would be tragic to lose another at the threshold of a new age.