As Summit Applause Dies, Gorbachev Goes Back to Russia Here's the Trouble with the System: There's No System


What was so good about Mikhail S. Gorbachev's trip to London to see the leaders of the capitalist world?

Push through the crowds that jam every available square inch of the ABV clothing and souvenir shop on Tverskaya Street. In the back room upstairs you'll find Alexei R. Kazakov, a young man with a Benetton fanny pack and the imposing title of chief commodities expert -- which means he's the buyer for the store. He'll explain the significance of the London summit: "The closer to the West, the better for our shop."

It's that simple. Never mind that the West didn't offer a whole lot. Cut through Mr. Gorbachev's ponderously vague language -- "the integration of the Soviet Union with the world economy" -- and you'll discover that what he's talking about is building a replica of a Western capitalist democracy.

That's actually a lot further than he's gone before, although it's what many people here have been expecting. Mr. Kazakov, for one, is delighted with the news.

The ABV shop perfectly mirrors the weird distortions that are sapping the logic of everyday life in the Soviet Union, as the country wanders in some uncharted region that's neither socialism nor anything else.

While American rock music blasts through the store, shoppers admire clothing that should be fantastically expensive. A dress costs 1,600 rubles: That's only about $59, but it's also about four times the average monthly salary here. Yet someone steps up to buy it. If they want, customers can opt instead for a handsome brass candelabrum as a souvenir. Price, just 12,250 rubles.

Prices here seem totally out of line with reality. The store finds customers because there are enough Soviet citizens walking around who, for one usually suspect reason or another, have bulging wallets. But Mr. Kazakov would rather do business in a system that created reasonable prices -- and a large middle class.

But the Soviet Union is not yet a Western country and ABV is not yet a shopping-mall boutique. Out front it's all English signs and stylish clothing, but upstairs, where Mr. Kazakov works, there's the ubiquitous old Moscow wallpaper and an even older Moscow smell. Tea is brewing somewhere and a tough-looking old man is quietly keeping an eye on things from behind an empty desk. As at so many quasi-private businesses in this city, there must be a dozen other people back here, performing not-quite-recognizable jobs, an incredibly top-heavy staff by American standards.

What ABV needs if it is to operate logically is a logical system to operate in -- and that's what Mr. Kazakov sees coming out of the London summit.

Mr. Gorbachev didn't get any money out of the West last week, but he began the long job of trying to tie his country inextricably into the Western way of doing business. The Western leaders happily promised to hold his feet to the fire, through follow-up conferences and an associate membership for the Soviet Union in the International Monetary Fund.

But, assuming he truly wants to pursue this change to the end, can Mr. Gorbachev do it? Vladimir V. Mitrofanov is by turns totally optimistic and totally pessimistic, in such short order that you can only guess which way the conversation is headed next. He is executive director of the Association of Joint Ventures, a sort of private trade group of firms that have formed partnerships with Western companies.

Business is lousy and it's growing worse and he, too, says it's because the Soviet Union lacks a system. Capitalism in the West has evolved into an incredibly complex structure, buttressed by contracts and a legal system that provide investors and business executives with security and an assurance that things will work in a certain understood way.

There's nothing like that now in the Soviet Union, Mr. Mitrofanov says, and naturally investors are wary of doing business here as a result.

"What we are lacking is this legal support and legal defense of our new businessmen," he says.

The only problem, as he sees it, is that a lot of people like it that way.

"Public opinion in this country is still very conservative, and many sectors of the state government are opposed to us," he says.

But the problems facing reform go beyond disgruntled Communists. The political task in building a new society is enormous -- this in a country where new political parties opposed to Mr. Gorbachev are springing up on both the left and the right, and where the Russian parliament just spent five days simply trying to elect a chairman, and failed.

Moreover, the economy itself is clearly in worsening shape. Inflation is threatening to run out of control, production is dropping, with the Gross National Product down 10 percent this year, and a drought in the agricultural heartland is cutting into the harvest. Meat, butter and cheese production is already down 13 percent this year.

The Western nations told Mr. Gorbachev they would lend expertise on food distribution, among other issues. This is how bad food distribution is right now: The Vladivostok City Council last week decided to start seizing some of the meat that is shipped through the port because the city is experiencing such a severe meat shortage.

"But please, send us no more food," says Mr. Mitrofanov. "We eat it up, and then we have nothing."

No, he adds, suddenly brightening, the moral support for reform is more important. When the West recognizes that it has mutual interests with the Soviet Union, and when the Soviet Union recognizes that it must accommodate Western -- or capitalist -- practices, then, he says, investment can truly start to flow.

Just last week, the state bank published a statement of its accounts, the first time it had done so since 1937. Investors want information before taking risks, and this was a gesture in their direction. As one Western diplomat put it, "This is what all civilized nations do."

But few people here or in the West seem quite sure if the Soviet Union, which has had nine different reform plans in the last two years, is actually going to see this through.

A poll taken for the newspaper Rabochaya Tribuna after the summit showed that 31 percent of respondents had a positive assessment of what happened, 15 percent were negative, and 41 percent, as the newspaper put it, 'found it difficult to express their own opinion."

Komsomolskaya Pravda headlined its story, "The Fog is Clearing," but another newspaper, Kurranty, was unimpressed. It criticized Mr. Gorbachev for making veiled threats to the "wealthy Western uncles" about unrest if he didn't get help, and said it expected little in the way of results from London.

The radical reformers are starting to gang up on Mr. Gorbachev for not getting much in the way of concrete assistance while in London, and -- maybe worst of all -- an insidious diplomatic word has wormed its way into the center of things.

Suddenly everyone is talking about London being the beginning of the reform "process." Just think how many years we've been living with the Middle East peace "process" and you'll realize why no right-thinking nation would want to be associated with the word.

Yet even Mr. Gorbachev himself was talking about ensuring that this "positive process continues."

If Mr. Gorbachev had to settle for a process in London because he couldn't extract any dollars, he clearly wasn't going to feel put down.

"We're going through a difficult time now," he said. "We shall find our way through this, we shall extricate ourselves, whether you help us or not. That's not the point. And we're not even talking about assistance, we're talking about the new character, new quality of cooperation, when we are an organic part of this world economic space."

Mr. Kazakov, at the ABV shop, hopes Mr. Gorbachev meant it, because he'd love to be singing the same tune. His philosophy is straightforwardly simple: "People should cooperate and do business. We have the desire and we have energy and we can work." All that's missing is a way to do it. A system.

"It will be a very long and painful process," says Mr. Mitrofanov, looking glum at the very sound of the word, "but tell your readers that everything will be fine in Russia." A huge smile lights up his face. "And if the country takes a U-turn, then we'll all come to America. And build a new Russia there."

Will Englund is a Moscow correspondent for The Sun.

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