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CHAPTER 3 The Russian Enigma A VISIT TO NIZHNY NOVGOROD

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Russia is so large that its overall conditions at any one moment almost defy generalisation. Indeed, it may be that the only way to understand the reality of Russia is to experience just a little of it at a time. Certainly, the impressions I gained from the visit I made in July 1993 have proved as instructive as anything I have read before or since.

I had been invited to receive an honorary degree from the Mendeleev Institute in Moscow, which specialises in chemical engineering and is one of Russia’s leading scientific institutions. My own early background as a research chemist meant that the invitation was of special interest to me. But I was also impatient to see for myself how much progress Russia, after almost two years of Boris Yeltsin and his reforms, was making. There were so many contradictory reports in the West that it was difficult to know quite what to think. Sir Brian Fall, one of Britain’s very best Ambassadors, had therefore prepared a programme that took in something of the old and the new. But even I was really not quite prepared for the resulting contrast.

On the afternoon of my first day in Moscow (Wednesday, 21 July) I was taken around a run-down shopping centre in one of the suburbs of Moscow. There was food on the shelves. But I could see that the choice was very limited and the quality, particularly of the fresh produce, was poor. The surroundings were as dreary as only socialist architecture can be. The locals were friendly, but half an hour of this was enough. Returning to the British Embassy for a working supper I reflected that though there were no evident shortages, neither was there much materially to show for reform. I had expected better, and I learned from the experts round the table that evening that a lot of Russians shared my view.

The following day I had another, more uplifting, rendezvous with the past in the form of several hours’ enjoyable conversation with Mikhail and Raisa Gorbachev, at the palatial Gorbachev Foundation (whose purpose I have never altogether understood) and then over lunch at the Residence. I was glad to see that both were in good form, though still somewhat shaken and embittered by the circumstances of Mr Gorbachev’s removal from power. Raisa told me about the discomforts of their three days of ‘exile’ in Crimea during the abortive coup in August 1991. There had apparently been little or no food, and she was lucky to have some sweets in her handbag to give to her granddaughter. In fact, I later learned that the mental pressure of the time had caused Raisa to have a stroke.*

After lunch we all went to the Mendeleev Institute. The ceremony was splendid. There were speeches. In mine I referred to the close relationship between science, truth and freedom. This relationship was, in fact, far from theoretical in the old Soviet Union, where independent-minded scholars of integrity often took refuge in the natural sciences, which were somewhat less contaminated and distorted by Marxist dogma.

An orchestra accompanied some wonderful Russian singing to round off the occasion. I could not though avoid noticing that the Gorbachevs were ignored by many present. Beneath the celebration political wounds ran deep.

At dinner that evening I had my first opportunity to discuss the Russian government’s reform programme with one of its main proponents and activators, the immensely able economist Anatoly Chubais. His ideas sounded admirable. But I could not quite forget the previous day’s dismal supermarket. Which was Russian reality? More importantly, which was the future?

Early next morning I and my party – which included Denis and our daughter Carol, who had shrewdly arranged to cover the trip for the European newspaper – left by plane for the city of Nizhny Novgorod. Under communism it was known as Gorky and was a closed city dedicated to secretive nuclear weapons research. Its very existence had long been concealed as far as possible from prying Western eyes. Indeed, the British crew of the private jet we were using had to take on board a Russian navigator in order to locate the airport, which did not appear on any of the usual maps.

But Nizhny Novgorod, I was aware, once symbolised a very different tradition in Russian history. In 1817 the city hosted its first trade fair, which quickly established itself as the most successful in the whole of Russia. The Russians, who are the world’s most adept inventors of popular proverbs, used to say that Moscow was Russia’s heart, St Petersburg her head and Nizhny Novgorod her pocket. With the end of the Cold War had also come an end to reliance on the defence budget to provide employment. The ‘pocket’ rapidly emptied. So there was every reason for the citizenry to return to their old entrepreneurial ways in order to earn a living.

Successful entrepreneurship is ultimately a matter of flair. But there is also a fund of practical knowledge to be acquired and, of course, the right legal and financial framework has to be provided for productive enterprise to develop. I had heard back in London that the Governor of the province, Boris Nemtsov, was someone who understood all this and that he was committed to a radical programme of what some call Thatcherism but what I had always regarded as commonsense. So I had decided to see for myself, and our Embassy made the arrangements.

Nizhny Novgorod’s saviour was, I found, frighteningly young (in his mid-thirties), extraordinarily energetic, extremely good-looking and gifted with both intelligence and shrewdness (which do not always go together). He was a good talker and spoke fluent English. His background was in physics, on which he had written some sixty research papers. He was extremely self-confident, and with good reason.

Indeed, as we sat in his offices in the Nizhny Novgorod Kremlin building, the more I listened to Mr Nemtsov’s account of his reforms the more impressed I was. He explained to me that he had been using his powers as Governor to promote a real free-enterprise economy. At that time the Russian Duma had still not passed a law to create secure title to private property, but in Nizhny Novgorod he had already decreed a local law on private ownership of land. The soil, as I would later see for myself, was rich and well-cultivated. The prime difficulty was not therefore in growing crops – in fact, Nizhny Novgorod was already more than self-sufficient in grain – but rather in selling the produce. Under communism, decisions about distribution and marketing had, naturally enough, been left to the Party bureaucrats. But once that system collapsed, networks which in the ordinary conditions of capitalism would have evolved over time had to be created all at once from scratch. Mr Nemtsov had made it quite clear to the local farmers and traders that it was they who now had to fend for themselves: the state offered no answers. But he had made a large contribution to solving the problem by auctioning off the entire fleet of government-owned lorries – later that afternoon I visited one of the privatised transport firms and was extremely impressed with all I saw, not least the enthusiasm of the manager and his staff.

It was now time to gain some further information and some exercise, as amid what seemed a large proportion of the population of Nizhny Novgorod, the Governor and I took a walk down Bolshaya Pokrovskaya street. All the stores here were privately owned. Every few yards we stopped to talk to the shopkeepers and see what they had to sell. No greater contrast with the drab uniformity of Moscow could be imagined. One shop remains vivid in my memory. It sold dairy produce, and it had a greater selection of different cheeses than I have ever seen in one place. I ate samples of several and they were very good. I also discovered that they were all Russian, and considerably cheaper than their equivalents in Britain. I enthusiastically expressed my appreciation. Perhaps because as a grocer’s daughter I carry conviction on such matters, a great cheer went up when my words were translated, and someone cried, ‘Thatcher for President!’ But the serious lesson for me – and for my hosts – was, of course, that in this one privately owned shop in this distant Russian city, a combination of excellent local products, talented entrepreneurs and laws favourable to enterprise applied by honest and capable political leadership could generate prosperity and progress. There was no need of a ‘middle way’ or of special adjustment to Russian conditions. In that cheese shop was proof that capitalism worked. The doubters would have been astonished.

Statecraft

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