14 September 1999 - Across the Siberian Wastes

KRASNOYARSK, Siberia – Moscow’s concern with the IMF, the loss of Chechnya, the war in Dagestan, the firing of Prime Minister Stepashin and ascension of his rival, Putin, and whether Mayor Luzhkov of Moscow becomes the next president of Russia probably has you more concerned than it does anyone in this bustling city 3,000 miles east of Moscow.
As I see it, that’s the big news out here: Very little that’s important to Moscow matters in Krasnoyarsk. Back when Moscow held dominion over the largest contiguous empire the world has ever known, back when a sea of goods and money streamed in from Poland, East Germany, the Ukraine, and other parts of the empire, there was money for the space program, the world’s best chess team, intercontinental missiles, and millions of well-armed soldiers. Today all that has changed. Like Chechnya, Dagestan will split off from Russia and so will dozens of other tribal and ethnic areas across what is now Russia but which will come to be a continent-wide checkerboard of new nations.

Since I came through here nine years ago a lot has changed. Back then there were no stores, no kiosks, no shops, and long queues for the few available goods. Today there are lots of shops and wonder of wonders, lots of goods—albeit often only locally produced and of poor quality. These new merchants must be selling a lot or they wouldn’t be in business, even if all they offer are shoddy goods. Compared to my last trip there are a lot more cars, and indeed here in a city of a million people there are nearly 5,000 Mercedes.

As befits a region much like our wild west, everywhere we see security. It’s not only usual to see police in bulletproof vests and AK-47s at highway checkpoints, but guards in stores are as formidably outfitted.

Every place we’ve been across Siberia—from Vladivostok to Khabarovsk, Svobodnyy, Chita, Ulan Ude, Ulaanbaatar in Mongolia, and Irkutsh to here in Krasnoyarsk—we find Russia falling apart. In every town, city, and village there are weeds, dust, mud, rust, peeling paint, and crumbling cement. Their balconies about to fall off, many buildings that in any second- or first-world country would be declared derelict by building officials are still in use.

After centuries of enslavement, Russians may finally be free to become rich, but for the most part they are poor. Officially unemployment may be at 12%; from what we see I’d put it closer to U. S. depression levels of 20%. As a result of such endemic poverty public-health systems don’t work well. The New York Times estimates that 30- to 40-million people live below the poverty line—of $30 a month. Hopelessness leads to drunkenness, and both lead to deaths in their late 50s for the average Russian man.

Nine years ago Krasnoyarsk was a secret city closed to foreigners, not even on maps because of its military and atomic importance. Today it is wide open, a bustling city. Many Chinese businessmen come across the border throughout Siberia to man businesses to serve Russian customers.

As in many Russian cities, in Krasnoyarsk there are cheap restaurants and expensive restaurants, the expensive ones as usual filled by “New Russians.” This is the Russian breed of vulture capitalist who feasted off the collapse of the Soviet Union, who back home we’d call nouveau riche or rich trash. Indeed, the largest house built here in over 100 years has just been completed by a local politician, a house that would be impressive even in the U.S. All the New Russians are building big private houses that could not have been built after the Revolution.

How did these New Russians become so rich? Simple—for the most part they were the managers of state-owned enterprises under communism, and as the USSR collapsed, they grabbed the factories, inventories, and stockpiles of raw materials they controlled and used these assets for their own benefit. During the first years after the collapse, hundreds of billions of dollars in commodities were sold to the West in a gigantic fire sale, the proceeds of much of which stayed in the West in Swiss bank accounts. With their authority enforced by the bodyguards and troops they hired, these former managers ran their old enterprises as they saw fit and proclaimed themselves their emperors, and who was there to contradict them? In other times and countries a warlord–a military commander exercising civil power in a region, usually by force of arms–appears after an empire falls apart. These New Russians, their fiefdoms: refineries, aluminum plants, vast farms, oil fields, gold mines, and factories, are the third-millennial version of the warlords of old.

So naturally these modern-day warlords are erecting enormous new homes to go along with their extensive new wealth. The communist system has been swept away, totally gone. For all the poverty, the New Russians are making money, and Paige and I find there are more cars, more new clothes, and more local newspapers and TV than before. Russians have been free to say whatever they want, and Moscow has little to do with them; out here people go their own way.

We have visited several of these snatched plants–indeed there are no other kind. One was an aluminum smelter, and another a vodka factory, which despite its monopoly and the extraordinary demand for its product runs only one shift. Like so many factories here, the vodka factory was poorly laid out and inefficient. Certainly the demand for its product is here: we see drunks at night, drunks in the afternoon, and drunks in the morning.

We also visited a fur-coat factory, where coats are cut and sewn. Like other enterprises, it was owned by the group who ran it for the communists. The building reminded me of the old loft buildings in New York that turned out piece goods forty, fifty, eighty years ago; today no American owner could afford to move his raw materials and half-finished goods through his factory by means of inefficient elevators and narrow stairs.

As with all goods here, the quality of these coats is poor and the price amazingly low. Back in the old Soviet Union, quality didn’t matter. It was enough to produce the product. If the boots were poorly stitched or the bucket had a hole in it, a Russian or a Pole would make it do. That mentality is still here, and that attitude will cripple Russia’s attempts to capture a share of the world’s markets for decades to come.

In fact, we see business opportunities everywhere. A Western competitor to the vodka factory or the fur-coat factory would do wonderfully well—until his business was taxed away, inflated away, or simply taken away–or he was shot dead, a fate which has befallen hundreds of domestic and foreign businessmen. Here they don’t fight over cattle and horses as in our Old West, but over franchises and business territories; all the same it’s a frontier mentality, the only law being that of the AK-47. Investing here’s like the cockroach motel; you can put your money in, all right, but how do you get yourself and your money out? This is capitalism certainly, but call it outlaw capitalism.

To give another example, we sailed from Japan to Vladivostok via FESCO, the Far Eastern Shipping Company, a Russian transport company. FESCO was once owned by the communists. After the collapse its managers grabbed it and have run it reasonably well, although a Western competitor would run circles around them. In fact a Western investor has even bought into the company. However, he has now been approached by the government of eastern Siberia for a piece of the action, to be given, say, a fifth of his holdings, a fate he is resisting. However, if he is not careful the government—that is to say the governor of the far-east region—will simply take the company away by means of some ruse.

One creative answer smart Russians and Westerners have come up with is to move across the border to the city of Ulaanbaatar, the capital of Mongolia, a few hundred kilometers to the south, from which they do business in Russia. First, in Ulaanbaatar you don’t get shot in a drive-by because someone wants your restaurant, plumbing-supply business, or building, and second, it has a real infrastructure. Recently the whole city was wired with fiber-optic cable, enabling you to jack into the Web from the phone in your hotel room. Can’t do that in Russia. It’s hard enough to call out from your hotel room here, and forget e-mail. Indeed, often the only way we can communicate with our folks back home is via e-mail—but it means we have to pay a physical, not a virtual, visit to the local Internet Service Provider.

It turns out that every decent-sized town in Russia today has an ISP, a battered office jammed with half-a-dozen aging computers and half-a-dozen roughly dressed youths staring into their screens. (I’ve never been able to fathomed exactly what they stare at for so long.) We descend on them, and they’re shocked and delighted to see visitors from the exotic west.

“How much to plug into your lines?” we ask, brandishing our laptops. It’s clear when they say a dollar an hour they think they’re wildly overcharging us, but we’re overjoyed to download and transmit our e-mail. It was a breakthrough for us to figure out that these guys were here at all, otherwise we’d be out of touch with friends and family for weeks at a time.

So, what is Russia today, and how did it come to be? Russia is really a third-world country, one with a vast wealth of natural resources, a well-educated population, and a diverse but declining industrial base. Partly because it never had much of an entrepreneurial class, partly because it hoped it wouldn’t have to change too radically, and partly because the Russian soul doesn’t trust or understand the marketplace, it continues to experience formidable difficulties in moving from its old centrally planned economy to a modern market economy.

After seven consecutive years of contraction, from 1990 through 1996, during which its GDP fell by a third, its GDP grew by less than 1% in 1997 before collapsing in 1998. Unable to persuade its citizens to pay taxes, the central government continues to struggle with a severe fiscal imbalance. Russia’s traditional trade surplus has continued to contract, largely because of soft international commodity prices—brought on, ironically, by its own dumping of commodities on world markets! Although President Yeltsin brought in a new economic team early in 1997 and has changed prime ministers several times, key structural reform has continued to move slowly. Small-business development—the all-important yeast of any free-market economy–has lagged.

Prospects for a return to robust growth have been set back by the spillover from Asia’s financial turmoil, which hit Russia hard during the last quarter of 1997. At first Moscow tried to both support the ruble and keep interest rates down, but this policy proved unsustainable and the Central Bank let interest rates rise sharply. As the year ended Russian authorities attempted to put the best face on the financial situation, while they scaled back their optimistic projections. Because of Russia’s severe economic constraints, resources allocated to the military sector have declined sharply since the implosion of the USSR in December, 1991. The result is that Russia won’t be able to hang onto its seditious parts through its military efforts.

Certainly traveling on the ground gives an ant’s eye view of how little works. Not only is phone service terrible, but the roads are a nightmare. The postal service doesn’t work well, and the lights go out continually. Of course you can’t drink the tap water. In the best hotel in town hot water is often impossible to obtain. Not only is there little indoor plumbing in villages and towns, but we see many outhouses and open wells, often too near each other. Even in the fanciest hotels there’s rarely soap, towels, or toilet paper—and just as it was nine years ago, there are no toilet seats. In fact, we have our own toilet seat which we carry in our trunk. I don’t know what Russians do with the seats from their public toilets, but I don’t think there’s a single seat left from one end of this 7,000-mile-wide country to the other. Sometimes I imagine they were all stolen and sold to UFOs for installation back on Mars (surely no country on earth needs such a vast quantity of well-worn toilet seats, does it?)

To our dismay we find that in Russian hotels prostitution is common and plentiful. We first encountered it in the Pacific Far East where there were swarms of Russian prostitutes and Japanese johns on sex holidays. Once these Japanese traveled to Thailand and the Philippines; today it’s to eastern Russia. In one old Intourist hotel, with but a couple of hundred rooms, six madams were needed to manage the trade.

Here in central Russia the price for a girl is far less than in Vladivostok, as unlike the Japanese, the Chinese from across the border won’t pay up. The prostitutes lounge outside the hotels in clumps, smoking cigarettes, where they can be looked over and graded by their customers, and thereafter summoned inside for business. We hear that in Moscow the price goes up, as city folks are more inclined to spend large than the more thrifty country Chinese. To both Paige and me it’s depressing that a generation of Russian women must suffer through this, but it’s a fact of pre-millennium life in Russia that people have freedom but no jobs. These prostitutes will make as much in a night as they would in a month in a regular job.

On the plus side, oddly enough, obtaining currency hasn’t been a big problem. We’ve now been through 22 countries, and to my surprise I’ve had very few of the problems I had on my last trip regarding currency. Last time I had to be careful in crossing borders to hide my cash, as border guards wanted me to declare it on special forms, and frequently on leaving I had to exhibit the forms and account for what I had spent. Of course, many border guards were looking for a bribe. Back then I hid currency in the frame of my bike, in my shoes, my helmet, anywhere I could that I figured they wouldn’t look.

On this trip none of that’s been necessary. On the last trip I had to have money wired to banks wherever I was going so I’d have cash for food, hotels, and gas; today Visa, American Express, and MasterCard are accepted everywhere. Even here in Russia, we often march to the ATM and take out whatever we want, sometimes even in dollars. Of course, there is still the currency black market for those who don’t want officials to know their business.

We see lots of used Japanese cars here and in the east, as it’s become an industry for Russian entrepreneurs to buy cheap used cars in Japan and bring them in to sell. Of course, some of these are stolen cars. The car of choice as we move west is Mercedes, the more feature-laden the better.

Here in Krasnoyarsk the Russians complain that the Chinese have stolen everything from them. What they mean is that the Chinese have crossed the border, spied opportunities, bought low-priced goods to sell abroad, and opened businesses, to which they bring their usual long hours and business acumen. To me this is a natural trade-off, for basically the Chinese need natural resources and a market, while the Russians need people to work their abundant resources. Indeed, in many cities we find a “Chinese” market, that is, a market of mainly Chinese merchants and their goods, selling to the Russians.

In 1990 it looked to me that the pressures from so many different ethnic groups would cause the USSR to split into dozens of parts as the post-communist era unfolded. The USSR indeed split into 15 states, and the same fate awaits Russia. I know it’s hard to imagine, but if the U. S. Federal government were to collapse, isn’t it plausible that the Latin citizens of Miami might declare themselves a state and run their region to suit themselves? Well, with varying degrees of speed that’s what’s happening all over Russia.

Further east the Buriat Mongols are a major ethnic group. While they certainly aren’t ready to secede from Russia, the local newspapers keep mentioning that the Russians took their province in the not-so-distant past, making sure no one forgets that their province wasn’t always a part of Russia. Ghengis Kahn, a Mongol, is often cited as the greatest emperor of his time, a ruler whose regime covered more peoples and countries than any other of his era.

The Chinese who are pouring into the vacuum developing in Siberia constantly remind everyone that the area north of the Amur was historically China until the 19th century. Lake Baikal was settled by the Chinese before there was a Russia. In fact, the name Baikal originated with two Chinese characters—bai and kal—which mean ‘holy lake’ in Chinese.

Vladivostok was only settled at the end of the 19th century by Russians trying to consolidate their new possessions. The name Vladivostok literally means ‘to secure the east’–clearly against the Chinese who were being thrown out and the Japanese who wanted in.

Such stories and national memories are always useful when local leaders want to declare their independence, as it gives them an aura of legitimacy. The truth is, of course, that if you go back far enough, all lands were taken from their prior owners. Even the American Indian was guilty of this; many tribes that the white men drove off its land had in fact taken that land by forcing off its predecessor.

Siberia is full of untapped natural resources, but has no capital or labor to develop them. The Chinese are desperate for natural resources and have lots of labor. The Japanese, too, are desperate for natural resources, but have no labor. Japanese capital and Chinese labor are moving into Siberia to fill the vacuum developing from the decline of Russia. Everywhere in Siberia we saw Chinese, and even Moscow is becoming aware of the huge numbers of Chinese who are moving into shops, farms, factories, etc.

Whereas in 1990 I saw only the palest of green shoots of religious revival, today we see lots of churches being restored. Services are held every Sunday in churches aflame with devotional candles. These are Russian Orthodox churches, but to our surprise we not only saw a Roman Catholic church but also a synagogue—on top of which was boldly displayed the star of David. The Buddhists are also reviving their temples.

While daily we see great opportunities for investors in tourism, manufacturing, and retailing, this is not a place I see myself investing. A part of it is the outlaw capitalism here, which was borne in on me when we visited Chita.

We stayed in the town’s best hotel, the Panama City Hotel (odd name for a hotel in this part of the world, eh?) In many towns the best hotel boasts the town’s best restaurant, and the Panama City was no exception.

There we met some of these New Russians, or outlaw capitalists, what back home we’d call “the mob.” On our first day the chief asked me, “So, how did you travel so far without paying anyone off?”

“How do you know we haven’t paid anyone off?” I answered.

He replied, “We know from our connections along your path that you haven’t.”

After this I made sure we became bosom buddies. At the end of the boisterous evening he told us, “Let us know if anyone bothers you here. We’ll have them killed. That goes for the next city, too. You won’t have any problems there, either.”

I didn’t doubt him, and it was chilling. We intensified our efforts to mind our p’s and q’s.

As in other parts of the world, our car continues to attract attention, and for a while I worried that it would be stolen. However, even in the New Russia the invisible hand provides. As all owners of luxury cars have the same problem, secure car parks have sprung up in every town, car parks behind barbed wire with armed attendants to keep them from being stolen.

To our surprise, gas is cheap here. We use diesel fuel and pay about 70 cents a gallon. As before, bread is cheap. I suppose both gas and bread are subsidized, although I can’t figure out how the authorities obtain the resources to do so. Actually, by our standards everything that’s local is desperately cheap. A taxi ride is a half a dollar to a dollar, and a tram is only eight cents.

When we westerners think of Siberia we tend to think of two things, soul-destroying prisons and bitter cold. When we had the chance to visit a prison, we jumped at it, wanting to see if the reality matched the stories.

For a public Russian building, the prison was the best-kept I’d seen. Every part was clean, well repaired, and freshly painted. In most Russian public buildings nothing works, rust and dirt are everywhere, and no one takes an ounce of pride in keeping up the place. But here it was different, and the warden admitted that of course he had a lot of free labor.

The western stereotype of Siberian prisons seemed true. The prisoners had less hope in their faces than any people I’ve seen in all my travels. Their cheekbones were sunken, their faces apathetic and lifeless, and their eyes hollow. Both Paige and my mother came with me (my mother and father flew in to Irkutsh to travel with us for a while) and the male prisoners, who can’t have seen women in years, showed not a flicker of interest or curiosity. Those still in orientation, in prison no more than two months, were different; some life and vitality played on their faces. Even the prison band, playing what they thought was rock and roll, had little life, nothing like “Jailhouse Rock.” In the courtyard the prisoners had recently built a little white church for their own use, Russian Orthodox of course, that was touching and sad.

What do we eat in Siberia? At every meal bread, tomatoes, cucumbers, cheese, onions, and garlic. Because there’s so much water here there’s always fish. Pork and chicken are common. Since they’re in season at the moment, blueberries, raspberries, mushrooms, and melons are in the markets. Of course, this being a primitive country they won’t be available after the season is over. However, for all this country’s primitiveness, the blueberries and raspberries are far more delicious than ours. They taste the way fruit tasted in the U. S. when it was only vine-ripened and not plucked green weeks early and shipped to our far-flung markets to ripen in transit.

Where on my last trip I couldn’t obtain beer at all, now it’s plentiful, if not all that good. However, there is one good beer, Baltica, made in St. Petersburg. Baltica comes in nine varieties, the bottles labeled One to Nine, each with a different alcoholic content. Paige and I drink Number One, with lowest level of alcohol, but teenagers here all drink Number Nine, while the men in bars go for Number Seven or Eight. I’d love to invest in a company that not only makes such a superior beer but has also achieved such widespread distribution, but I don’t dare. I know that if you own anything in this country that’s worth something, sooner or later it’s going to be taken away from you one way or the other.

This view of Baltica beer seems to summarize my views of investing in Russia. One decent product amid a sea of shoddy products, and the financial and legal culture so jury-rigged, make-shift, and unreliable as to make an investment in it impossible. We’re enjoying our visits with the friendly Russians, but it will be decades before an investment can be safely made here.

MOSCOW – We were in the lavish Manezh shopping center last night, near the Kremlin, when a bomb went off. Nineteen people are in the hospital, five in serious condition. There have been about a dozen bombings in the last three years, but they have not been publicized much in the west. Nobody knows whether it’s the work of Dagestan rebels, a criminal-gang war, or an anti-consumerist group.

It’s another bead on our string of adventures in interesting times. In Nis shortly before the NATO bombing we encountered small-arms fire. We arrived in Turkey for the capture of Ocalan and the ensuing unrest. We were trapped in Iceland by the worst blizzard in 30 years. We traveled across Austria during another blizzard so severe it closed the road to Italy for the first time ever. We were in Uzbekistan when the borders were closed because of the assassination attempt on the president.

We were in Krygistan just before the outbreak of the Moslem separatist violence, which included kidnapping foreigners. We arrived in Beijing the day before the US bombed the Chinese embassy in Belgrade. We left Korea just as North Korea started its latest saber rattling. All these incidents are part of seeing the world—of the world as it is, the real world.

In sharp contrast to my last trip across Russia, everywhere we traveled we saw numerous auto-repair and service shops as well as the ubiquitous guarded parking lots, a result of the tidal wave of consumer demand released by the collapse of communism. Other examples are the video and music shops everywhere. However, what isn’t visible are new productive assets, the fruit of true investment. All the tractors we passed were aging models, held together by baling wire, left over from the communist years, which of course yield little productivity. Factories are often so neglected that we cannot tell whether they are even producing goods.

Travelers who visit only Moscow and not the countryside will be deceived about the present and future of Russia. Unlike ten years ago, when it was hard to find a place to eat even a simple meal, Moscow today is a pleasant city of shops, kiosks, restaurants, chic stores, and sidewalk cafes, as enjoyable as Paris or Stockholm. Unlike most other places in Russia, the well-heeled traveler can even stay in a five-star hotel here, but it will probably be German-owned and German-run.

I can see how foreigners can be deceived into thinking Russia is a real country if they visit only Moscow. The current mayor has spent an enormous amount refurbishing the city and building monuments to gussy up the city. No one knows how much he has spent since he refuses to subject the city to an audit or reveal a budget. There is even a smooth, new ring road around the city now—unheard of in the rest of Russia.

The mayor is spending an estimated US$1.0 billion rebuilding the Cathedral of Christ the Savior although the books are secret. He spent US$12 million on icons, but no one has ever seen the icons.

No expense is too large to support the mayor’s friends. Moscow now has a huge new monument to Peter the Great, but the truth is it has nothing to do with historical fervor. The mayor’s favorite sculptor of massive projects built it on speculation in the hope of selling it in the U. S. as a monument to Christopher Columbus. After no one in the U. S. would buy it, he returned it to Moscow, turned it into a monument to Peter the Great, and sold it to the mayor.

One thing that has not changed from my last visit is Lenin’s tomb in Red Square. Poor Lenin did not want to be there in the first place; he left instructions to be buried in his hometown. Since 1989 there have been many calls to let him rest in peace somewhere else, but he still reposes in Red Square. A decreasing number of mainly foreign tourists mixed with aging ex-communists still visit five days a week. These days it’s not so cheap to maintain this attraction. Eighteen policemen are on duty, closing the entire square when the tourists come during their allotted three hours a day. The rest of the time another six are on duty constantly guarding the place. Most of these guards are arrogant young punks who love throwing their weight around with confused foreigners and retirees. Despite a full-time team of morticians who strive to preserve the remains of the poor fellow, he gets seedier by the month. These days he looks more like a yellowing plastic mannequin than the “hero of the revolution.” Soon he will probably die again of embarrassment from being ignored and neglected, without even the decency of a proper reburial.

From a macroeconomic point of view, it’s depressing that there has been so much capital invested in the cosmetics of this country and not in its infrastructure and productive facilities. There are new shops, but no new farm implements; new restaurants, but no new plant machinery; and a new facelift for the Kremlin, but no soundly run commercial banks. Not only has little been added to the infrastructure, but little of the old has been maintained. Without basic investment, the life of the average Russian will never improve much. This surge of consumption after decades of deprivation is understandable, but it does not build for the future.

It’s finally bubbled to the surface in the Western press that much Western aid, given to enable Russia to strengthen its infrastructure, has been stolen by those to whom it was entrusted and now resides in foreign bank accounts, a depressing fact that some of us have known for years.

It’s astounding that this huge theft occurred in broad daylight without either Congress or the IMF noticing it. This theft is evident everywhere; for example, there are now over 100,000 Mercedes in Russia, up from none 10 years ago. Even if each Mercedes cost only $5,000, the total comes to $500 million of hard currency that was used to import these cars. A country with a balance-of-trade deficit cannot spend this much on luxury cars unless someone is stealing a lot. There are more top-of-the-line Mercedes in Moscow than in any city in the world.

Until Russia begins to obey the simplest economic laws—such as that there can be no real gains in an economy until stewardship is taken seriously and investments are put into true productive capacity—it will remain a third-world country. Capital has its own laws, laws as inexorable as those of gravity. Until Russia comes to respect capital, to provide for its safety and nourishment, capital won’t come to its aid. Intelligent capital does not aid thieves. This is a process of educating Russian leaders in politics and business, a process that will likely take decades and produce much Slavic misery.

This, of course, assumes there will be a Russia. As we’ve come west we’ve found more and more signs of eventual disintegration. All the Moslems still in Russia want out. Mosques are being built everywhere. The Bashkirs around Ufa want their own government. The leader of Tatarstan is determined to take his region out of Russia, which would certainly be ironic. Why? In the sixteenth century, after centuries of warfare, the Russians finally defeated the Tartars. Over the next three centuries this victory led to the Russian conquest of the south and east as far as the Pacific Ocean. So it would be fitting and ironic if the empire’s disintegration was speeded up by a reversal from the Tartars, the Russians’ antagonists of several hundred years ago.

We visited the Tretyakov Gallery’s extraordinary collection. It was closed for eight years, including my last trip, for renovation. They charge 20 rubles for Russians, but R175 for foreigners. Students have it even worse: Russian students pay only R6 while foreign students pay over 16 times that at R100. As usual, even though this was a fancy joint there was not a single toilet seat in either the men’s or the women’s john, the men’s urinals were all boarded over, naturally there was no toilet paper, and it contained the same retched stink of all public toilets in Russia.

Anti-Western, anti-American, and anti-government sentiment is bubbling up everywhere. The reports of rampant theft by the oligarchs, or chief mobsters, are causing widespread public resentment. Russia has sacrificed everything—its empire, its currency, its public treasury, its international reputation, Serbia, everything—to enrich a few.

To my mind, an unrecognized, unannounced coup has actually already taken place at the top. Putin and the old KGB have quietly taken over from Yeltsin to try to stop all the public theft and prevent the country from spiraling further out of control. They are doing this undercover, to make the coup appear as if it’s Russian post-communism democracy as usual, because they still want Western money. I suspect their plan is then to get rid of Yeltsin in some way, both to avoid elections and to put themselves in power “legitimately.” As an indication, Putin just appointed a minister to deal with the media. That minister’s first statement was, “The press is a greater threat to the state than the state is to the press,” and he immediately started putting on the clamps. I do not expect any of this to succeed—rather the manipulation of the media will contribute to the downward spiral and to yet another collapse.

We’ve encountered two dishonest policemen so far, and we’re told we’re lucky to have encountered only two. Perhaps unwisely, we decided to report them to officialdom partly to see how seriously our charges would be taken, hoping to learn something. We found no official who would even accept our report about GAI 21-0269 and DPS MK 3438, the badge numbers of the two crooked cops. Every official instructed us to file our report some place else. Muscovites to whom we tell this story are richly amused that we even tried.

Every business has to pay for its “roof,” that is, its protection from the rain or some other more human catastrophe—whatever. We have also found that every business has to pay the police, too. Even a place like the high-profile, five-star Hotel Baltschug Kempinski in Moscow apparently is beholden to the police because it is afraid to rile them.

There is one investment that might appeal to a Hyatt or other international hotel chain right now. In many Russian towns and cities the local ruling boss, the fellow surrounded by thugs wielding AK-47s who grabbed his region’s most lucrative productive asset, has built a hotel. These new establishments range from as few as 15 to as many as 200 rooms, and we can assure you from many dreary weeks of first-hand experience that all of them are poorly run and attract but few visitors. A Hyatt might take over their management and add them to its international reservations system, not only upgrading these hotels’ dismal service but making travelers aware of their existence. Perhaps then tourists would explore the wild beauty that is Siberia. I would not spend a nickel of my money or a minute of my time doing so, but there might be an opportunity for someone who disagrees with me about the future of Russia.

The international traveler to Russia should realize, however, that except for Moscow, St. Petersburg, and the Golden Ring (those old cities, such as Susdal and Vladimir, that circle Moscow) there is little to see in Russia that tourists usually value. We covered 7,000 miles in eight weeks from Vladivostok to Moscow, and while Siberia is a beautiful land covered with vast forests, vast lakes, vast mountains, and tiny villages, there’s not much else to view. We found a haunting poetry in Siberia’s rugged vastness, but it was not the enchantment of the Taj Mahal, the Pyramids, and the Great Wall of China, manmade objects that inspire awe. Across Russia it’s only God’s handiwork on display, and if thousands of miles of His handiwork are not up to your standards, better stay home.