Nights on the track; days on our own - travel through the Soviet Union

RELease 1.0, Nov 7, 1989

NIGHTS ON THE TRACK; DAYS ON OUR OWN As part of our trip, we were invited along on a Young Leaders tour JVD was sponsoring to introduce Russians and Americans to each other, following up on a meeting held a year earlier in Philadelphia. We spent three nights on overnight trains, not a bad way to go if you get your own compartment (two out of three nights!). These Americans quickly took note of all the standard problems, the most intractable of which is the lack of currency convertiblity. People with the trader mentality have learned to barter. The small guys live hand to mouth. Giants such as PepsiCo trade Pepsi for vodka, or paper for rights to trees, but these are mostly giant-corporation-to-government (what's the difference?) deals. Where's a small outfit like JVD to get resources worth trading? With full-time employees and commitments, it can't afford to rely on chance deals and erratic markets.

The first night we went to Tallinn, shown above as it looked some years ago, a stronghold of European culture and energy and the capital of Estonia (population 1.5 million). Sort of an overgrown medieval village, it has winding streets, a castle of sorts on a hillside, and lots of churches and cobble-stones. JVD's local representative was out of town (we met him later in Moscow), and so we made do with a collection of colleagues and other people. The most interesting were Pille Ungerson, a dentist who moonlights as a guide for Intourist, and Monica Sehver of Uniconsult, a lawyer who specializes in joint ventures -- an interesting area since mot of the law is new and untested. People keep calling her up and saying, "We want to do a joint venture. Can you help?" They have no particular product or partner in mind, but they know that Joint ventures are a route to hard currency.

We prevailed upon Ungerson to take us to her polyclinic, one of the largest in Estonia with 150 dentists, almost all of them women (660 of the 700 dentists in Estonia are women). The director of the clinic, however, is a man, Tenno Jannes. Newly appointed, Jannes is eager to make a difference, as is Ungerson. Here too, hard currency is an issue. Ungerson and Jannes had just returned from a visit to a Moscow dental equipment show, full of modern equipment the clinic can't afford. But Jannes has a plan: to offer the clinic's services to Finns just across the Baltic Sea, who pay high prices for medical services in Finland. Their payments in hard currency will enable the clinic to buy equipment and expand. In addition, extra funds might enable the clinic to train and hire nurses and hygienists to perform tasks the dentists do now. The polyclinic supervises about 50 other dentists, who check children's teeth and teach prophylactic care in each local school. But they and the clinics face insuperable odds: There's a shortage of toothpaste and so little dental floss that no one even misses it. (4)

Estonia has its own language, close to Finnish and Hungarian rather than Russian. The attitudes in Estonia were openly hostile to the Soviets. We could see clearly how much more psychologically bearable it is to be oppressed by a foreign government than by one's own: There is a general feeling that things are getting better and that one should stay and work to make them so. In Russia, by contrast, people seemed more ready to give up and leave -- or give up and stay. The dentist was clearly having a hard time of it, but her life is better than he parents', and she hopes her two sons' will be better yet.

The hunt for hard currency

Even the Estonian national (as opposed to Soviet) government is in on the hunt for hard currency. It has started a program whereby only Estonian citizens with appropraite ID are allowed to buy certain kinds of goods, in an attempt to keep out marauding Russians and other foreigners who were depleting the republic's relatively well-stocked stores. Now the republic wants to create its own scrip, a sort of informal hard currency, that could be used to buy certain kinds of goods and traded for hard currency with its own exchange rate, backed by the Estonian government. It's an intriguing idea, but would be complex to administer and would just create more friction in a marketplace that's already almost inert.

Meanwhile, the Soviet government has begun an interesting experiment (effective November 1, after we left) with hard currency, de factor devaluing the ruble to a truer value around one-tenth the former official price. This move, however, seems to be more an attempt to forestall the black market than a real devaluation, since it applies primarily to transactions made by tourists, not to commercial transactions. Even then its effect is more on Soviets who will have to pay ten times as much for dollars, than on US tourists who are probably already changing dollars at street prices. This just gives the government a better chance of competing with the black market -- but it's significant as recognition that the market can't be ignored.