Market reform and price liberalization in Russia, 1993 - 1994, Leeza Arkhangelskaya
From MemoryArchive
Who: Leeza Arkhangelskaya What: Price liberalization and market reform in Russia When: 1993 - 1994 Where: Moscow
In the time of the Soviet Union, deficits of many goods and food products were commonplace. Finally the government declared that the fixed prices are to blame for this. In 1991, the government decided to liberate the prices and instead establish market prices. In 1992 and 1993, the Government expanded the money supply and credits very fast, which brought about high inflation and a decline in the exchange rate of the ruble. In early 1992 the government cut money and credit creation and simultaneously lifted price controls. However, the Central Bank soon loosened its hold on the money supply. Finally, by the end of 1992, the Russian money supply had increased by eighteen times.
The result of such fiscal irresponsibility was felt by everyone. All food products completely disappeared from the grocery stores. In January, my uncle had a baby, and we could not find even milk to feed him with. We were asking neighbors and friends for food for the baby, but no one had anything. We were wondering from store to store looking for food in vain.
The people really saw this as criminal acts of government. The food shortage lasted for not weeks but months. The government did try to compensate the hungry population. We were given coupons for minimal food, like rice, milk, flour, and butter. My grandmother managed to get hold of more coupons than usual, but many of the stores would not give her even her fair share. The stores purposefully would not give out the food, because after the prices were liberated, they could sell them at any price and maximize profit.
Nonetheless, we were somewhat lucky, because my grandmother who has survived WWII had a habit of saving deposits of everything. She stored rice, onion, kasha and rice. We did not go hungry.
My mother told me an especially touching story for that year. One day her friend Lena called with the most exciting news. She managed to buy a chicken, and called her best friend to share her truly priceless treasure. That day my mother told me that she understood the meaning of the phrase “a friend in need is a friend in deed”.
I also recall that at that time there was a popular female group called “combination,” (a play on words – combination is also a woman’s slip coat). Their hit of the year was called “two little slices of sausage.” It was a comical new year’s song about a romantic dinner consisting of only two pieces of sausage, which was really a feast for the times.
Finally, when food became more available, the prices would radically change from day to day. I remember going to the store for bread. One day I would pay 3 rubles for a loaf, and the next day I would pay maybe 1000 rubles. This may seems ridiculous, but the jump in prices was astonishing. Such instability of prices also caused everyone who had their savings in rubles, to lose all their money.
In the spring on 1994, my mother decided that it is time to go visit my father in Washington DC. And that was when I permanently moved to the US.
