Diary notes on a three day visit to Kiev, Monday – Wednesday, 17-19 August 1992

A lightning visit to Ukraine to put in order UPS relations with new partners Vneshexpobusiness [VEB]and to close the door on our former agents Kievvneshtrans. Useful insofar as now the owners of VEB begin to appreciate the sophistication of our product, the market to be created and the
immediate issues for success: release of our sacks at plane side at the airport, customs clearance at the downtown office, day of arrival delivery of documents , payment of customs during in advance on behalf of consignees to expedite customs release, etc.

I am put up in the Hotel Kiev, formerly the hotel of the parliamentarians, which is quieter than the Intourist hotels, but otherwise equally run down. The only fast moving and clever creatures are the roaches. One rascal escaped my plans for his destruction.

Other impressions from the visit [to Kiev] are not very positive. My walk around town, along the Kreshchatik reconfirm my impression of three months ago: the reforms are proceeding very slowly down here, well behind Moscow and St Petersburg. Privatization of apartments and property is
moving along. But Western investment is still quite rudimentary despite the large number of business visitors. Very few Western products are on sale for local currency. Not too much is available for hard currency either. No Western boutiques to speak of.

Given the mess with introduction of ‘coupons’ to replace roubles earlier this year and continuing prevarication over intro of the hryvna as a genuine Ukrainian currency, it is not surprising nothing else is succeeding. Now the coupon is down to 300 to the dollar, while in Moscow the
rouble is only at 180. Looks like the Ukrainians shot themselves in the foot.

It is amusing that everyone I run into, either at the business meetings or just on the street is speaking Russian, not Ukrainian. Now that may be a peculiarity of Kiev.

I manage to catch a press conference given by Kravchuk on TV. He behaves very well: sure of himself, giving the impression of a reasonable man who is above politics and just trying to serve the national interest. Very presidential.

On the business side of things, I get satisfaction from the knowledge that here in Kiev we, UPS have been the first of the big express companies to work directly on import and export not over Moscow. DHL and TNT and Fedex are thus well behind us. And now we are developing customs experience
that none of the others have.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up is now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com]

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Diary notes, Sunday, 16 August 1992, the coming break-up of Czechoslovakia

Another extraordinarily interesting week gone by. Started in Cologne with the head-to-heads on Monday and staff meeting on Tuesday. Hanjo Lutz and I finally fly to Stuttgart and onward to Vienna, where the Bacigal brothers, our Service Partners in Czechoslovakia are waiting for us at 10.00 pm to take us the 40 minutes onward to Bratislava.

On this trip, Hanjo shows his talent. He is a pretty good judge of character and of human interaction. He is also a capable raconteur and has more than usual sophistication among my German colleagues. Knows a smattering of French as well as passable English.

The trip starts in Bratislava and then moves to Prague. Bratislava looks better and better, but what really can you expect of a town of 350,000?  The real eye-opener is Prague, which is undergoing a face-lift nearly everywhere. Facades are being repainted, interiors are being stripped. New, slick upmarket shops are filling in. Looks like the boom Budapest of 12 months ago. Probably ahead of Warsaw . And the tourists: the Old Town is swarming with them. Mainly on selected streets, very much as in Venice. Still more like Venice in the nationality:  hordes of Italians. Smattering of most everything else. Large numbers of American youth here, as the English language papers further confirm.

The Charles Bridge is an open air youth hostel. Boutiques carry unusual, specifically Czech handicrafts that are very appealing: glass, of course, but also a type of lace that passes for jewelry, wooden toys. Downtown buildings, theaters look glorious. When that dismal soot is covered by pastel colors on baroque facades, the effect is extraordinary.

Do I want to live here? Once upon a time, I would have. But now I don’t particularly feel an attachment. Better crazy old Petersburg. The Russian culture is somehow more sympathetic. Czech irony and black humor is more wearisome.

The Bacigals have created the CSPS for UPS as I had demanded. They have taken over new and very impressive office premises in Prague where only the UPS logo is featured. Mr. Jan Hojsak, the old Cechofracht manager who had been feeding us business is now appointed as station manager Prague.

The time is taken up with operational questions and also with advertising policy. On ops I find that Bacigal has not implemented the data procedures that were fully agreed. It turns out, yet again, that they are unhappy with what UPS wanted but never said a peep, only later voted with their feet. I get to the bottom of the matter and hopefully we have a working arrangement for manifests and key entry. Otherwise I am busy with McCann Erickson redoing our planned advertising program for October; stripping away high price television in favor of print media, negotiating the cost sharing with the Bacigals.

I am also busy with last preparations for the East Europe general partners’ meeting: inspecting the hotel and preparing the Bacigals for their part in the presentations. Per requirements of my management, there will be  no high culture, only gastronomy, beer drinking, a walking tour and bowling.

I don’t have much opportunity to brush up my Czech. Instead all our meetings are held in German, mainly for Hanjo’s benefit. By the end of the three days I am dreaming in broken German. God, what an exercise! As is often the case, I seek to dominate conversations so that I control the vocabulary. Hanjo takes my relative fluency for full comprehension and tends to leave me in the dust with his jokes and slang. The Bacigals’ German is far easier for me.

One evening I take Hanjo around the Old Town and across the Charles Bridge. He is enchanted and lost in thoughts over how he can find the occasion to take his wife down here. We stop for a beer (he) and a caloric dinner of duck and dumplings (me) on the Main Square.  Kids form arcs around flame eaters and folk singers. A hundred meters away, just past the Rathaus clock is the American Youth Hostel and Chicago Pizza outlet. The talk of the town is the recent opening of the second McDonalds in town, at the start of the Vaclavske namesti, just about opposite the Bata building. Otherwise, Wenceslas is overtaken by cheap whores and money changers. The vendors of Russian watches and matrioshkas still are doing business in the Old Town, but the caviar, which was cursed in the local media, has disappeared.

Billboards feature almost exclusively Western goods. Proctor and Gamble has invested heavily. The Skoda ads now run the line ‘member of the VW Group’. Mars bars are everywhere. M&Ms cover trams with their message.

The other concession to tourism during the stay is dinner at U Kalechu, the Schweik pub. How I had managed to miss this attraction over the years is a mystery, for I have twice been to the competing U Fleku. U Kalechu recently went private and Hojsak complains they are too commercial. Indeed, they try to please the tourist. An accordionist and tuba player decked out firstly in WWI costume, then in zany 20s outfits play restrained oompah music. Food is palatable. I go for old reliable: goose leg with kraut and dumplings. The brown beer is said to come from U Fleku and is wonderful as usual. Besides the flock of tourists from all over, including the Far East, there are some tables held down by natives.

One of my tasks is to see what the Bacigals expect by way of political evolution given the widely reported split of the Czecho-Slovak state in two on October 1^st. Their view is there will be a customs union and possibly a currency union. I am particularly doubtful about the second, because it means continued setting of fiscal policy in Prague, and it is precisely that which has led to the Slovak secession. And regarding the customs union, it is difficult to see how that will help us.

The docs for registration of the Bacigals’ new company already show how the republics are drifting apart and each is shy of doing anything that will impact the other: the company is granted a license to operate only in Slovakia and will have to apply for a Czech license later. What I see is that goods we land in Bratislava will, at best, get a transit customs seal there and will have to be finally customs cleared in Prague.  This will change the entire system we have set up. We must now concentrate on getting a second port code for Prague so that we can do a split in Cologne can do a separate manifest to ease customs clearance.

The Bacigals are happy to talk politics. Both were partisans of Klaus’ economic reforms and anti-nationalist policies. Both were disappointed by the subsequent victory of Meciar in Slovakia and the move to split the country. They see blame, however, on the Czech as well as Slovak sides. First it is a mistake to say that the nationalists are closet Communists. The elections brought in only 0.8% votes for Communists in Slovakia compared to 14% for neo-leftists (ex-Communists) in the Czech lands.  Why? Because of the strong role of Catholicism in Slovakia compared to agnostic Bohemia/Moravia. Havel played into the hands of Slovak nationalists when he visited the rallies of extremists in Slovakia and gave exaggerated importance to the fringe people. There were tactical errors here. And now it is the Czechs more than the Slovaks who are pulling the federal republic to pieces. Of course, the Slovaks will be the big losers.

I take a look at my volume of Kennan’s Prague After Munich, 1939.  Just after the Munich pact. The Germans are moving into Prague. The Slovaks are calling for break-up of the unified state. Sense of déjà vu. Also I come back to reevaluate Kennan himself. Was he alone a coward? Or was it, is it diplomacy in general. These embassy personnel are reporters, not doers or decision makers. They are eunuchs by definition. What is disgusting is his flippancy about the misery of others. Very much like that December Harvard Club meeting in Brussels when the ambassador for the EC in Moscow Michael Emerson spoke of the helplessness of the world community in the face of the ongoing Bosnian/Yugoslav disgrace.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up is now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]

[

Diary notes, 17 May 1992    – my Germans are saying “re-build the Wall!”

After three very hectic weeks of travel, the past week was a chance to dig out from under the mountain of personal mail at the Cologne apartment (which I did not visit for the whole period) and business mail at the office.

I had the good luck to be away during the two weeks of industrial strife in Germany when the public sector employees, including garbage removal and postal workers, were on strike. And perhaps the intensity of the local feelings about the costs of reunification escaped me. Because that is what the latest round of industrial action is all about.

 I had been very admiring of Chancellor Kohl at the time when he forced the pace of reunification 24 months ago, because I had listened to my German co-workers who were uniformly unenthusiastic about unification with the East on grounds of the likely costs in higher taxes. These guys had seemed so pedestrian, so lacking in vision, whereas Kohl, who previously seemed so potato-like dull, now showed the great historic sense – to seize the moment of Soviet disintegration and the generally benevolent tenure of Mikhail Gorbachev, to do what two generations of W. Germans had said was a national goal and to reunite the divided nation.

Now I see the dangers of ‘leadership’: Kohl over the two years has made light of the costs. His formula of 1DM=1 Eastmark was politically expedient in alleviating objections in the east before the vote; however, it led to the economic destruction of what had been the strongest economy in Eastern Europe as E. German labor priced itself out of the market. The bills eventually came in: something like 100 billion DM per annum to prop up the terminally ill E. German economy, the creation of a gigantic welfare establishment which the West Germans have been paying for partly in the form of higher taxes but mostly through public borrowings that have driven up the interest rates to giddy levels, and partly through a steep rise in the inflation to over 4.5%  It is the latter phenomena that gave birth to the labor demands for steep wage hikes even as the economy has softened. Kohl was not forthright with the people as he led them down a path that had little public approval and now there is hell to pay. As my boss says: “we don’t see why it was necessary to unify with the East; the wall should have stayed up; they are a different country and should have remained so.”

Is this a good or bad thing? How curious that while England’s Thatcher and France’s Mitterand have fretted over a hypothetical resurgence of German nationalism, the facts have shown the opposite: the average German doesn’t give a damn about the big policy issues and is concerned only about his levels of taxation. So the remarks of my German classmate from Harvard, that someone might take away his Ph.D. given that his thesis set out to prove the impossibility of reunification, those remarks are premature: the reunification has not really taken place in spirit; the GDR has been taken over but not absorbed.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]

Travel notes,  Monday 16 March – Friday 20 March 1992 – Tour of the Baltics

A very compressed trip with many impressions. A very exciting time to be visiting the Baltics, and good to stop en route in Warsaw to look over the new contractor operation set up under my guidance, and to visit in Helsinki with the ops manager Ari Kovero to finalize plans for changed traffic flow to St Petersburg and the Baltics.

Warsaw.   Have a brief meeting with LOT downtown office to prepare the way for using their flights into Vilnius to serve the Baltics; then go out to the Service Partner’s offices at Warsaw airport in a container owned by LOT. Low overhead solution – all the basic necessary equipment is installed – telex, IBM and Acer computers. All staff have signed written labor agreements with the new contractor, per my demand. Staff is rather sullen towards me, and even Jack and Konrad are cautious with me, since I really did pistol whip them all during the showdown with the Servisco boss the preceding week. However, I make no apologies for my behavior.

At 8pm I check in for the LOT flight to Vilnius. I have had misgivings about flying this route. LOT was not my favorite airline, but I was reassured by the spring like weather we had been having and by the official designation of a French-Italian built new propjet plane ATR on the route. Weather has since turned foul – we have had wet snow all day long. So I am not surprised to learn, shortly before scheduled departure that the flight is delayed due to difficulties at Vilnius airport. However, after an hour we are invited to board.

The plane is indeed new; but as an elderly Pole sitting across the aisle from me complains, it vibrates like hell even if it is a Western product, so the 90 minute flight is no treat. We arrive to similar weather conditions in Vilnius. On the taxiway I see, to my considerable surprise, a parked Boeing 737 with the colors of “Lithuanian Airlines.” The terminal building is in advanced reconstruction, with adaptations for starting international services underway, so that we are offloaded onto a bus and then taken all around the terminal building to a side entrance where passport control booths have been installed. I get my cost-free visa in 10 minute – on a separate sheet. The crest of the Republic of Lithuania below, the Soviet text above.

Before leaving Warsaw I got assurance from Glab that he had made phone contact with Vilnius and that they knew to meet me at the airport. Now as I come through customs the 3 partners of Lex Ltd are there waiting for me and we drive in their little Lada through the icy streets down to the city where I am shown to my suite and where we proceed to go over current business till nearly 1 am. Meanwhile we learn that Messrs Saarestik and Suiray from Tallinn have also checked into the hotel, so all is proceeding as I had hoped. Finally, thoroughly talked out, I collapse in my bed. The hotel, though clearly built in the late 1970s or 80s is typically run-down and shoddily constructed.

Tuesday, 17 March 1992

Breakfast before 8am in the ground floor restaurant. As I take my place by a window close to the entrance, I am sure that the guy at the next table is familiar – but he is so stocky that I am not sure I am right. After all  the face is so very Finnish that it could be someone else. He sits down with 4 colleagues, then stands to introduce himself to another co-worker who is joining his table. “I am Kauko Peltonen” – I immediately go over to shake hands. It is indeed old Kauko, former SEP (ITT) manager in Moscow, who left the company after Alcatel divested itself of the Finnish subsidiary, but whom Luigi brought back to become the Alcatel office manager in Moscow. Kauko is not delighted to see me, says sourly “as you can see, nothing has changed here” then we exchange cards.

At around nine I meet up with Saurestik and Shiray, and all of us – the Tallinnn and Lithuanian groups – sit down together in my suite to put together the action plan for the Baltics. I learn that Moscow has been holding for more than2 weeks all Baltic traffic at the office; that Yuri’s pledge to forward all packages by train was never kept. Only now, when I am in the Baltics, has Moscow finally put a man onto the job and arranged train forwarding. Some 140 kg in 6 sacks are being sent up to Tallinn; a sack for Vilnius arrives while I am there. I catch Yuri on the phone and he says lamely that he couldn’t free up a man to look after the transfer.  He also confirms by phone that he’s having difficulty assuring traffic to and from St Petersburg!

We agree tentatively that we will set up direct movements into and from the Baltics either via Tallinn (Helsinki) or via Vilnius (Warsaw), that I will gather all possible information during the visit and we will take a firm decision beginning next Monday. I separately order Cologne to suspend shipments into the Baltics until we can reach a decision.

We meet with Lithuanian Airlines and explain the interest we have in using their flights from Vilnius to Warsaw. Also have friendly chat with Austrian airlines at the airport regarding their twice weekly flights to Vienna. Go over to meet with the U.S. Embassy staff around 6 pm – there we are received by the Communications manager, who definitely shows an interest in using UPS for diplomatic mail. The embassy is spanking new and still glows from the recent visit of U.S. Vice President Dan Quayle.

Weather has turned fair and cool, but there is absolutely no time for sightseeing. We go straight down to parliament mall, where barricades from construction materials still safeguard the representatives from the still present Soviet military.

Vladas, the senior among the troika, with a doctorate in computer sciences, arranges a press interview for me with a lady journalist at the country’s leading newspaper, where his brother works as a layout designer. The gal is tough and curious – wants to know my political views and not only company claptrap. So off the record I express my admiration for Lithuania’s toughness, stubbornness in the face of Western indifference to win and defend their independence from Moscow. Asks about my wife and daughter – just thirsty for fresh information about how a manager in the West lives.  Then we go over to the other hotel for a brief radio interview with a lady reporter for Radio Lithuania. I make a short statement that is broadcast the next day in their shortwave English language program.

We all take a late dinner at my hotel – the top floor hard currency restaurant that resembles the Hotel Vitosha setting in Sofia. There is a sexy bare assed floor show which we sit part way through. Go to bed at close to midnight – hoarse but exhilarated.

Wednesday, 18 March 1992

After breakfast at 9.30 we all set out for Kaunas, home base of 2 of the 3-man Lex team. The second capital of Lithuania is roughly in northeast direction en route towards Latvia.  I join Sarestik and Shiray in their chauffeur driven big Mercedes.

In Kaunas, we stop just off the central pedestrian mall, the main street of the town. All is orderly, clean, in an excellent state of repair. We visit the honey-comb offices where Lex is now camping out, and where they are now threatened with eviction. A single room with city phones. The legal basis for free enterprise is scarcely there. All is political conflict between various factions of reformers and hard-liners. VAT is a subject for conjecture. Profit taxes are headline news. Privatization is the buzz word, but the reality is continued uncertainty, fighting over procedures for accepting and adjudicating claims of pre-war owners.

Currency is the ruble. Cash is in artificially short supply. One of the partners takes me on a little walk through stores – some already private. A department store is showing off Western household goods, kitchen appliances. A street kiosk sells me 110 g of Russian caviar in a blue tin for $3.00  Currency is rationed to citizens who can obtain up to $200 in a year for travel abroad. He shows me the equestrian statue to the 14^th century prince of Lithuania. A nearby alley displays marble pedestals and bronze busts of 18-19 century scientific and cultural leaders in Lithuania. I am stunned to learn that these are all reconstructions of original monuments destroyed under Stalin – reproductions made over the past 2 years and paid for by public subscription. A fantastic witness to popular determination to sweep aside the nightmare of the past 50 years and rescue the fabric of national life.

We part with the Lithuanian group and continue towards Riga.

Vilnius – Riga is 300 km. The road is mostly 4-lane highway in good shape. This was the one achievement of the last Communist premier, who appropriated funds for construction in the face of opposition from Moscow.

As we reach the Latvian border, I get a first surprise: notwithstanding all the talk about the Baltic union, this is indeed an international border, where border police stand watch on each side and inspect travel documents. My Lithuanian visa is accepted. We reach Riga towards 3 pm and after some difficulty find the offices of our unofficial delivery partners. These guys had not been interested in the parcel business when we met 6 months ago in Tallinn but now the champagne bubbles have burst, the drink is flat – the economy is in a slide and income from UPS business looks increasingly attractive to them. We have a quick meeting in their offices during which I collect their delivery records, agree on installation of a telex, and agree that they will be a subcontractor to the Tallinn team. (Separately I had agreed with the Lithuanian group to find subcontractors in Minsk to cover Byelorussia for us)

Riga looks big – solid. We take lunch at a nearby hotel restaurant; all the old treats – vodka, smoked fish and meats. Then we walk to the newly opened 4-star Western luxury hotel. The clientele is here – the prospects are good. Riga with a population of 1 million has nearly 40% of the total population of the republic. The VEF electronics factory now has connections with Philips. The outlook for business is interesting. Whereas the local guys had only deliveries till now since they had no written contract, they will now also be interested to sell exports for us.

Towards 6 we again set out by car in the direction of Tallinn. Another 300 km, now on a two lane ordinary road. But with newly raised gas prices, traffic is minimal so we mostly cruise at 120 km/hour.

Again we reach a genuine international border at Estonia. The ongoing journey across Estonia by night hints at a rich countryside, with occasional private houses and apartment buildings that are brightly lit and resemble closely the Finnish countryside. We pass a couple of the newly opened NESTE gas stations – splendid, perfectly Western, and charging FIM for petrol that Estonia still gets largely for rubles from Russia. Saarestik complains bitterly over this perceived rip-off which is supported by systematic shut down of the old state-run stations. We reach the Hotel Olympia at just after 10 pm and I take my junior suite.

Thursday, 19  March 1992   Tallinn

Tough day of meetings with Saarestik. I learn all the unsavory details about how he had a fight with his partner, how our records have been stolen, and the clientele was turned over to TNT, with whom that partner had been working in parallel. I visit the offices of Baltic Trading nearby to discover that this  contractor to Finnair who does aircraft handling for imports, has accepted DHL as a sublease tenant in their premises and are letting DHL use their basic account for Estonian shippers’ payments. Nonetheless, the scheme is workable for us to tender to Finnair in Helsinki and receive imports in Tallinn straightaway. Perhaps in two months direct export will also be workable this same way.

Friday, 20 March 1992   Tallinn – Helsinki

A very rushed morning. I visit the US embassy  and British embassy to wave the UPS flag. Both show clear interest in the service. Then rush over to the airport for the 11.15 am flight to Helsinki – where I am met by Ari Kovero and taken over to the UPS offices for a couple of hours of discussions.  Ari speaks with Finnair and confirms that we can do transfer from incoming UPS charter flight at 8.00 am to ongoing Finnair flights to St Petersburg (9.30) and to Tallinn (10.05). Also agrees to help get emergency supplies down to Tallinn and to train Shiray.  Back to the airport for the Sabena direct flight to Brussels.

Hell of a trip. I’m in seventh heaven.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]

Finale of the USSR, Gorbachev’s leaves the stage

Diary notes, 25 December 1991

Wednesday,  25 December – a completely lazy day. The news of the day is Gorbachev’s resignation speech and U.S. recognition of the successor states to the USSR, – Russia, Byelorus, Ukraine, Armenia, Kyrghizia. This is a watershed in history. For the first time in 70 years the red flag is lowered in the Kremlin and the tricolor flag of Russia is raised in its place.

I have been a most admiring fan of Gorbachev for most of the past 7 years of his rule. He is clearly a giant intellectually and in political gifts. He succeeded in moving the Soviet Union into radical reform without violence and catastrophe thus far.  Yet he was also a victim of his own successes and eventually made himself irrelevant. He opened the political process to new forces which rightfully moved onto the stage and displaced him. He put too much emphasis on retaining the structures and personnel of the past, hoping to make the Communist Party into an obedient tool of his reforms. Instead he nearly became the victim of the Right, whose powers he, like most everyone else, overestimated.

The death knell for Gorbachev’s years sounded  during the August 21-23, 1991 coup d’etat. The loud mouth and unorganized democratic opposition , Yeltsin, Sobchak, Popov, who had over the preceding years shown only their unpreparedness to administer and run things, now in a pinch showed their civic courage and saved Gorbachev’s freedom from the henchmen of totalitarianism: Yaneev, Pavlov, etc. whom Gorbachev himself had put in power ostensibly to forestall such a right wing reaction, but also as continuation of his balancing act between right and left to maintain his own relevance and indispensability.

Gorbachev, saved by the Liberals, now became their hostage. Like a sparrow that has been rescued by humans, he was healed but lost his ability to fly. It was only a question of time before the dual power, the contest between him and Yeltsin would be solved once and for all. And so it should: continued dualism would only invite further putsch attempts.

Yes, I agree with those who find the gentleman Gorbachev a far more calming, reassuring leader than the ruffian Yeltsin, who seems to talk from the corner of his mouth and to snarl. But this is the man who saved Russia, who scrapped the Communist Party and he’s the one to implement economic reforms about which Gorbachev could only talk in a dilettantish way. Yeltsin, like Walesa, is the first leader to have an electoral and popular mandate to carry through reforms that everyone knows will cause much suffering on the already miserably poor and unhappy population. The price de-regulation comes on January 2^nd; let’s hope Yeltsin can stick with the Polish radical reform and not fall back on the populist, interventionist economic policies that were formerly ascribed to him.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]

Travel notes, Yugoslavia, Wednesday 20 November  –  Friday, 22 November 1991

This is my first trip back to Slovenia since the start of the civil war this summer. In the meantime, six weeks previously I was in Belgrade for a meeting with Dragan Brscic to spin off the Serbian and south Yugoslav operations from control of Intereuropa. Brscic had spoken like a true Serbian nationalist, though in fact he is a Croat with a father in the Yugoslav foreign service.

Now I meet with old friends Tanya Filipovic, Rihard Baznik and Alojz Pozar. The last, most conservative, finally agrees there can be no restoration of the Yugoslav household, that the idea of living under one roof is unthinkable. Still, for business purposes, he does have hopes that realism will prevail and that Intereuropa can once again serve us in the non-Serb southern republics.

Tanya is no longer looking like a freedom fighter. She is a mother who is hoping that peace will break out. I say that there will be peace only when the Croats start doing war: that the issue of the day is not the EEC peace-keeping mission of Lord Carrington, which has merely been a smokescreen used by the Serbs to wage their war of aggression against Croat civilian populations, nor is it the follow-up peace mission of Cyrus Vance, which served involuntarily the same function. Rather, the issue is as soon as possible to achieve recognition of Slovenian and Croat independence and supply of real arms from outside so that they can properly defend themselves and repulse the Serbs. Tanya is frightened by my talk. Rihard is in agreement. Here the Croats have been wishy-washy, to their great loss whereas the Slovenes have stood fast and put their backs to the wall.

What is incomprehensible to me is why the Croats have not simply blasted some of the Yugoslav Army barracks into cinders. That would get some attention. Here I see criminal lack of leadership by F. Tudjman which is paid for in the blood of Slavonia and which may bring him the bullet he so richly deserves.

Otherwise the Slovene Istrian towns are unchanged. We get new Slovene currency and we see that a real international frontier will come down now between Slovenia and Croatia. Slovenes are probably safe: Serbs need an independent Slovenia as a buffer state between themselves and the Italians/Austrians. But Croatia is going to suffer a terrible devastation while the Serbs exact their vengeance.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]

Travel notes,  Poland, Warsaw and Lodz, Tuesday, 5 November – Friday, 8 November 1991

Meeting with Mrs Edwards, newly appointed (August 1991) director of the U.S. Trade Development Office. She makes the following points:

Warsaw has full employment.  Anyone seeking work can find it, though salaries may be below expectations

Similar situation in other major cities

Most lively economically is the corridor of Warsaw-Poznan and Warsaw-Szczecin. Least dynamic is the South, particularly Krakow.

Is the mass influx of Western goods being paid for my exports? No, it is paid by the mattress money – the $5 – 12 billion which was kept hidden awaiting attractive consumables

The objective of the Polish government a year ago was to sate their pent-up demand by opening the Polish borders to all imports. Import duties were dropped to nil. Now in September 1991 the duties were put back – to levels above the EEC, in time for negotiations with the Economic Community and also to re-start industry.

Why is privatization so slow? Because the government has sought to proceed prudently with utmost transparency and avoiding back room deals. They have hired international consultants to guide the privatization of each industrial sector.

Official statistics vastly under-report the real economic activity because so much of it is not captured in tax or other statistics gathering = black economy.

My critique:

Salary levels in Warsaw are twice the national average, which remains $70-80 per month in both state and private enterprises.  Therefore the buying power is not there to sustain the present consumption binge. It is at the expense of past forced savings over many years.

The opening of frontiers for imports over the first three quarters of 1991 wiped out a whole stratum of manufacturing entrepreneurs. Once burned, these people will think 10 times before starting up production enterprise again. The real economy today is a retailing, not a manufacturing economy.

However laudable the use of prestigious consultants to map privatization may be, it’s a serious mistake to disdain those companies which came forward now with money in hand to buy up assets. Consultants take no risks. Their advice is of limited value. Better to believe those who come with money in hands. Those assets have no intrinsic value – are worth only what bidders will pay.

Edwards is enthusiastic – enjoys her work , without any sense of self-consciousness or false pride.

Meeting with the Vice President of the newly founded Tourist Bank, Mr. Jerzak.  85% Treasury owned, with participation of PTTK, Committee on Tourism.

His points:

So far the EBRD, Jacques Attali, have done nothing, only given good press. And they fear Attali is looking too much at Russia.

More relevant is Czech banking operation in support of trade financing. The Tourist Bank is closely interested as an essentially investment bank.

Banking is what E. Europe needs most acutely now. Only trade finance can restore what has fallen away with Comecon.

 I find that Jerzak is a clever, impressive guy.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com]

Diary notes –  23 October 1991 – Michael Emerson as a barometer of European foreign policy

 Saturday morning is rushed because we’ve got a midday lunch gathering organized by the Harvard Club in downtown Brussels to hear Michael Emerson, Head of the Delegation of the European Commission in the USSR – speaks on “Unification and Disintegration: the EEC and the Soviet Union.”

Apart from the luncheon meal itself – a fine ragout of venison washed down with an ’83 Bordeaux, this event is infuriating. Emerson shows himself to be a scatterbrained pompous fool carrying out a narrowly selfish EC policy that does no credit to its national sponsors. The meaning of his speech is that while the EEC grows and integrates, the Soviet Union is falling apart. Emerson is a voyeur, a jotter of personal impressions who evidently is gathering material for some future book of memoirs, nothing more. He remarks in passing that his year of international affairs at Harvard in the  mid-80s was the happiest year in his life – and so it must have been because this is no man of action.

His task is to execute the EC policy of keeping the Union together at all costs – parallel to the task of the EC firefighters in Yugoslavia’s civil war. It  is a dishonorable task. The U.S. wants the Union preserved, wants to keep the corpse of the USSR alive to co-host the mid-East process and to get Mikhail Gorbachev’s signature on some more pretty disarmament agreements. The latest unilateral disarmament proposals of the U.S. show that even this function is superfluous – the sides can disarm effectively without negotiating.  However, why does the EC want to preserve the corpse of the Soviet Union? To keep in its peoples and prevent a flood of refugees from spilling over into Western Europe? To avoid having still more applications to the EEC club at a time when it is fighting internally over completion of the federal union among the 12 and is about to negotiate widening to embrace EFTA?  Here is the key to it all. And this is pitifully narrow vision – inadequate and unworthy of the historic opportunity before us.

Soviet and East European membership is a football in the contest between the UK and France/Germany over the meaning of the Euopean integration. Here is why they back Gorbachev and Yavlinsky.  They were forced to acknowledge the independence of the Baltics, but they bitterly resist independence for Ukraine and other republics. They turn a blind eye to the powerful force of nationalism, which they pompously denounce as egoism, while they themselves combine unseemly squabbling over sacrifice of national rights before a common currency and foreign policy.

To my thinking, all the republics of the USSR should get out from beneath its wreckage as fast as they can. It is their obligation to realize their national potential before re-uniting in any supranational body of any kind. I steam as I listen to Emerson and then to the equally pompous and fatuous speakers/questioners.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]

Diary notes, 2-3 October 1991 :  Greetings from free Tallinn!

Wednesday, 2 October

Drizzly, cold autumn weather

Yesterday I made my first entry on Soviet territory without a previously issued visa. All went according to script. The Estonians put visa No. 1144 in my passport; the first time my sojourn has been recorded in take-home form.

Last night after a bottle of Moet et Chandon, followed by a bottle of Russian sparkling red wine we relaxed from a hard day’s tutorial in the ways of UPS. The strange gangster like team from Riga went home and our team of Estonians, and Soviets (Manuilov from the JV in Moscow) eased into a discussion of ‘where were you on the morning of August 19, 1991? Recollections of the putsch: “that’s it, I thought, here we go to Siberia!” “When I saw those trembling hands (of putsch leaders), I knew it wouldn’t last.”

Such a feeling of history – of having lived through something that the grandchildren would want to hear about.

At the same time, naïve optimism that their emigration abroad will help dig them out of the shit. I try to disabuse them of this and counsel that they rely on their own inner strength. I point out how my German colleagues would like to rebuild the Berlin wall – how we are absorbed in our own problems.

Curious situation –between regimes.  Tallinn is an open city. The border is open. Our Soviets came in here without a visa. Westerners either came with a Soviet visa or got an Estonian visa freely at the border. Soviet currency circulates and will continue to do so for a year more at the least. The Bank of Estonia is a free trading point for the ruble – weekly auctions.  The airport is now under Estonian control. Landing rights are decided locally and are granted virtually for free –2,000 wooden rubles = $50..   Communications in general however remain where they were before the changes.

See Estonian scorn for the lazy Finns, who took the vast Russian market for granted, who made easy profits and were unprepared for the changing terms of trade. Now Estonians aspire to exploit the untapped Russian riches. See our guys’ fascination with timber and mineral resources of Yakutia.

Prices rising fast – rents on state apartment will increase soon 5 – 7 times. Yet two currencies will coexist for an indefinite time. It will be at least one year more before the Estonian currency is introduced and the ruble is phased out.  In the meantime the banking system is drained of rubles.

Meeting with the Bank of Estonia shows remarkable change in some matters. They are quickly establishing correspondent relations with major banks in Europe and the USA. Bank transfers abroad can go through within 2 – 3 days. Currency auctions are open to all Soviet organizations. The rate now is approaching 70 rubles/USD.

A Wild West feeling – wild speculation going on in currencies. Smuggling through the open Tallinn port. People are scheming to recover lost nationalized property. There are gang robberies and muggings. – 15 per day in Tallinn according to police reports.

Radio Luxembourg blares in the Olympia Hotel restaurant at lunch. My television set offers Super Channel sports in the morning. The Music Channel rock broadcasts all day long.

During my stay the formation of the Baltic Customs Union is announced to the press. Common customs policy for Lithuania, Latvia, Estonia – open borders to the West. No internal customs barriers.

Supply situation:  at the hotel Olympia the restaurant is better stocked than on my visit one year ago. I am told that the food stores in town are 30% more expensive than in Moscow but are fully stocked whereas in Moscow the shelves are bare.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]

Diary notes, Belgium, weekend of Saturday, 21 September 1991

Our 19^th wedding anniversary party – a political debate over the break-up of the USSR

We invite Tanya and Jean, our pianist friends from Namur, and Svetlana and Mark, from Brussels, to a champagne toast at our Braine l’Alleud home, followed by a restaurant in the town. As usual with Russians, the talk turns to politics. Jean becomes fierce in his attack on the stupid break-up of the Soviet Union and its turn away from socialism to a market economy. He says how people will suffer.  Why give up political principles that are essentially good just because they have been abused by villains. I see purple!

Jean shamelessly tells us at dinner how splendidly he had lived in Moscow during his student days at the Conservatory. How like other Armenian/foreign students he had smuggled in gold jewelry (the 2 meter long chains!) which, when sold, enabled him to live like diplomats. How he used tricks to get past the bouncers at better restaurants. How he bought a Peugeot 504 from a Yugoslav embassy official and kept the CD plates. Clearly he was and remains a shameless elitist, epicure, sensualist. He wants 280 million Soviets to remain poor so that he can be rich among them.

Our dinner is mediocre. But our bon vivant friends are not discouraged and we go through numerous bottles of red and white wine, ending in Havana cigars for the gents, the typically extravagant offer of Mark. 

Political debate re-emerges.  I am something of a coq in these matters. Jean backs away, mellowed by the food. But the sting is there –we are clearly standing on opposite sides of the barricades.

I am wholly for the market changes, for the break-up of the USSR, whereby I see each of the republics finding its own worth. I deplore the laziness and egoism of our Western diplomatic community, which is conservative and unwilling to acknowledge the necessity of allowing freely elected democratic parliaments.  The right to self-determination.

As I see it, no one knows who is rich and who is poor in the Soviet Union. All calculations are built on misinformation. Official statistics show what common sense observation denies.

If Tatarstan is poor, it’s only because its vast mineral wealth is being sold cheaply via the Druzhba pipeline to Comecon for roubles. Let the western oil companies in, let the exports go at world market prices and this down-and-out provincial area of the Russian Federation will be among the richest. Ditto Uzbekistan. Now the papers begin to reveal the truth about its status which official data concealed for reasons of military secrecy. The large gold production, which is second in the USSR after Russia and ahead of Kazakhstan, did not appear officially because the gold mining was conducted in the same fields as militarily operated uranium mining and was enshrouded in state secrecy.

The despoliation of all resources in the Soviet Union, the rape of the land, was legendary. Now control must be turned over to the indigenous peoples. They must assert national interests and must understand their worth on the world stage before any recombinations are possible.

Those in the West who ask how these republics can survive on their own are empty rhetoricians. Let’s take Estonia, for example: a tiny population of under 2 million of whom one-half are Russians, Ukrainians and other non-natives; a land without mineral resources, whose economy is founded on agricultural products which are already over-abundant in Europe. Fine, but Estonia is situated geographically in the position of transit crossroads from Finland-Scandinavia to the south. They rightly emphasize the potential for developing roads to allow a north-south route in the east, where the ecological restraints are not so severe on truck transit as in the pampered West, passing through Germany.  Moreover, the Estonians seek to develop their banking activities as financiers of East-West trade.  In a word, they’ll survive quite nicely by rendering services to their bigger and more powerful neighbors. Why then should they be compelled to participate in a union which has been till this past August the vehicle for trampling on their rights.

Jean and I are indeed far apart. He’d do better to mind his music and not his politics. I will not mourn the passing of the black market days of the past.

©Gilbert Doctorow, 2020

[Memoirs of Russianist, Volume I: From the Ground Up in now in print and available on all national websites of Amazon.com, as well as from other leading online retailers including Barnes & Noble, and http://www.bol.com.]