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. Last Updated: 07/27/2016

Ministry Buried by Mound of IOUs

The coal miners are threatening to strike, again. Power plant workers once more are demanding overdue wages. And now, this week's announcement: the government owes cars, refrigerators and television sets to hundreds of thousands of farmers who turned over their crops five years ago in exchange for promises of luxury goods.


From her paper-heaped desk at the Finance Ministry, Yelena Martiyanova sees no way out. As the official in charge of Russia's huge internal debt, Martiyanova keeps track of IOUs -- and the way she figures it, the farmers will have to wait a good while longer before getting their hands on imported fridges or remote-controlled TVs.


First Deputy Finance Minister Andrei Vavilov this week announced plans to redeem the farmers' chits by 1997. But Martiyanova, cheerful in her incredulity, must contradict her boss. "It's such a colossal sum," she said, running her manicured nail down a typewritten list of debts. "To repay it in two years is just not possible. I think it's totally unrealistic."


Indeed, the farmers must stand in line with millions of other Russians who have not received their salaries on time. So far, Martiyanova said, the farmers "strangely enough have not complained."


But all around them, other creditors are loudly demanding their due.


Rallies across Russia this week drew tens of thousands of citizens frustrated by the broken-down payment system. The Coal Industry Workers' Union plans a major demonstration Dec. 6, although it called off a planned strike. And the regional administrator of Moscow snagged President Boris Yeltsin's attention Friday to press for prompt payment of back wages for teachers and health-care workers.


Such protests have become routine in recent years, as employees in nearly all industries -- from factories to fisheries to the circus -- have had to deal with erratic payment schedules. In other industries, some managers have had to dole out wages in the form of commodities like instant potato flakes.


This latest flurry of discontent comes less than three weeks before new parliamentary elections. Hoping to mute voters' sour moods, the government has promised to make good its debts to the military and compensate victims of financial swindles. And Friday, Economics Minister Yevgeny Yasin trumpeted a bit of cheery economic news, announcing that the inflation rate dropped slightly in November to 4.5 percent.


Russia's once-wild inflation rate has steadied over the last few months, largely because of the government's successful efforts to stabilize the ruble. Since July, Russia has kept its currency trading between 4,300 rubles and 4,900 rubles to the dollar. After meeting with advisers in the sanitorium where he is recovering from heart trouble, Yeltsin announced he would let the ruble slip slightly starting Jan. 1 to perk up lagging exports. Looking hearty and speaking forcefully in a television appearance Thursday night, Yeltsin said he believes the steady ruble rate is "a good step" toward keeping the economy on an even keel.


Yet in her stuffy office, Martiyanova sees little cause for optimism. Lately, she has been preoccupied with Russia's debt to the farmers. True, the government has settled accounts with nearly two-thirds of them. But that still leaves 151,000 waiting for cars and nearly as many in line for refrigerators -- not to mention those waiting for washing machines and video-cassette players.


Redeeming the farmers' chits will cost more than $4 billion, Martiyanova estimated.


"In the future, of course, we're going to pay," she said, "but we don't have the mechanism for it right now."