Women and the Birth of Russian Capitalism: A History of the Shuttle Trade 9781501758157

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WOMEN AND THE BIRTH OF RUSSIAN CAPITALISM

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© 2014 by Northern Illinois University Press

Published by the Northern Illinois University Press, DeKalb, Illinois 60115 All Rights Reserved Design by Yuni Dorr Library of Congress Cataloging-in-Publication Data Mukhina, Irina, 1979Women and the birth of Russian capitalism : a history of the shuttle trade I Irina Mukhina. pages em Includes bibliographical references and index. ISBN 978-0-87580-480-4 (cloth)- ISBN 978-1-60909-152-1 (e-book) 1. Soviet Union-Commerce-History. 2. Women merchants-Soviet Union-History. 3. Business-

women-Soviet Union-History. 4. Small business-Soviet Union-History. 5. Black market-Soviet Union-History. 6. Capitalism-Soviet Union-History. I. Title. HF3626.5.M844 2014 382.082'0947-dc23 2014002306

Contents

List of Figures, Tables, and Graphs Acknowledgments

vii

ix

Mystery Women: An Introduction

3

1-0rigins of the Shuttle Trade, 1987-91

18

2-The "Golden Age" of the Shuttle Trade and Its Structure

3-Women Traders: Success in Numbers 4-The Price of Success

98

5-Where Did All the Women Go? Notes

145

Bibliography Index

169

157

124

72

40

List of Figures, Tables, and Graphs

Figure Figure Figure Figure

1.1: 1.2: 2.1: 4.1:

A monument to shuttle traders in Yekaterinburg, Russia 2 A monument to shuttle traders in Blagoveshchensk, Russia 2 Traders' plaid bags at a train station 59 Merchandise on display in one of Moscow's stalls 102

Table 1.1: Crude oil prices in relation to Soviet GDP, 1984-87 23 Table 1.2: State revenues from alcohol production and sales, 1985-87 25 Table 1.3: Evaluation of economic situation in the country, workplace, personal life, 1989 35 Table 2.1: Consumer goods that did not meet quality requirements 52 Table 2.2: Number of Russian citizens who traveled abroad in 1995 53 Table 2.3: Economic situation in Russia, 1994-97 70 Table 3.1: Educational levels of traders 77 Table 3.2: Age distribution among traders, as of 1996 78 Table 3.3: Trading as a share of overall employment, as of 1996 78 Graph 2.1: Turkey's shuttle trade exports 63 Graph 2.2: Various actors in the shuttle trade 64 Graphs 3.1a and b: In your opinion, are [were] shuttle traders richer, poorer, or as well-off as most people in Russia? 80 Graph 3.2: Have shuttle traders become rich? 81 Graph 3.3: Do traders do their jobs willingly? 81 Graph 5.1: The exchange rate of the US dollar to the Russian ruble, 1998 126 Graph 5.2: Russian GDP 127 Graph 5.3: Patterns in acquisition of goods 130 Graph 5.4: Share of domestic goods on the markets 131 Graph 5.5: Assessment of the shuttle trade by the population of the Russian Federation 134

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losses. When the trade bounced back, it reemerged in a new form that was shaped by the new economic and social realities of the 2000s. Research conducted by the Sociological Institute of the Russian Academy of Sciences demonstrated that at least 40 percent of all traders left the business immediately following the default of 1998. The percentage might be even greater if we compare the popular participation in trade in the mid -1990s. The "human capital" of the trade was estimated to be at least 15 million people in the 1990s (pre-1998), with the highest points occurring at mid -decade with 30 million people earning a livelihood from activities associated with international peddling. By 2006 the highest estimate was about 6.5 million people, though, once again, precise numbers are hard to come by. 4 Other sources indicate that no more than 10 percent of the former traders sustained their business into the first year of the new century.5 The monetary volume of trade, however, increased over the years, suggesting that the per capita capital and the scale of transactions increased as well. The volume of trade experienced a steep decline in the months following the default of 1998, but it bounced back in the early 2000s. The Russian Trade Committee and the State Committee for Statistics demonstrated that in February 1999 the monthly volume of the shuttle trade fell to $0.8 billion USD (estimated $5.6 billion annually), which was a 55.2 percent decline

127

Where Did All the Women Go?

compared to the same month of the previous year. 6 However, by 2004 the annual volume of trade, according to the study done by the Highest School of Economics, was estimated at $22 billion USD though the State Committee for Statistics quoted a lower figure of about $12 billion USD. 7 If the initial departure from the market was a result of Russia's default in 1998, then the subsequent remodeling of the new trade had to do with broader macro- and microeconomic changes in the nation. The growth of the Russian economy in the 2000s and the stabilization of the job market offered traders new opportunities for employment. The economic growth (demonstrated by Graph 5.2) also meant better incomes for consumers who could finally afford better-quality goods. For some regions, especially Moscow, this implied that the traders needed more capital to invest when entering the trade, thus creating a new obstacle for newcomers. 8 Lower profits, greater capital investments, and rising employment opportunities elsewhere became a potent force drawing many traders away from international peddling. Unemployment data can offer insight into popular participation in the trade, even if the evidence is only suggestive or indirect. The official unemployment reached its all-time high at 13 percent of the working-age

Graph 5.2. Russian GDP Russian GOP (PPP) Since Fall of Soviet Union Billions of International Dollars {2008} 2,300 2,200 2,100 2.000 1.900 1,800 1,700 1 .600 1 ,500 1.400 1.300 1,200 1.100 1,000 900 800 700

! 998 Financial Crisis

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