Nick Hoffman,

Nick Hoffman,

A weeklong electronic journal.
Sept. 4 1998 3:30 AM

Nick Hoffman,

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     9 a.m. "The armed forces are not in a festive mood," Defense Minister Igor Sergeyev claims this morning, trying to push politicians in Moscow to create some sort of government--any sort of government--fast. Vladimir Zhirinovsky, clearly unafraid of any HMO plan offered him, also pushes for archenemy Viktor Chernomyrdin: "The surgeon who has dispatched 200 patients to the morgue may yet cure the 201st." No one else is in a festive mood, either. The ruble is still falling like a stuntman in the "showdown in a derelict warehouse" sequence of a bad thriller--crashing through floor after floor on its way to its final resting place. On the street it is now worth 40 percent of what it was in dollars 10 days ago. The rubles I bought yesterday to pay my mobile phone bill are fading in front of my eyes. 9:30 a.m. Like many shops, the phone office is closed "for technical reasons" for most of the day while they change prices. The shops that are working have new signs in the window reading "Open" that can be reversed at a moment's notice. All prices have begun to rise dramatically, and shelves are emptying fast. I can't find butter or juice at the corner shop. Imports to the country have practically stopped, which is not good, because 50 percent to 60 percent of food sold in St. Petersburg comes from abroad. The winter, which will begin not in November but in a few weeks, is going to be hard: Last year Russia produced 40 percent of the food it did in 1986, and this year the harvest is 30 percent smaller than last year's. Distributors and small businesses are going bankrupt by the dozen each day. 10 a.m. At the museum much advice on what to hoard. My salary is paid in dollars (by the Ford Foundation, Sackler Foundation, and McKinsey), so I am not panicking, but museum pay is in rubles. Before the crash the average salary was worth between $1,000 and $2,000 a year. At least they have been paid more or less on time. This is a country where most industrial workers are paid two months late, and farmers four months late. The crisis has exposed the "pass the parcel" game of payments in Russia so everyone can see that everyone is bankrupt. Over 50 percent of payments, 40 percent of taxes, and a stunning 94 percent of the natural gas monopoly Gazprom's debts were paid by barter (at values inflated on average by 100 percent) in 1997. The minimal cash in the system has been expropriated by the largest firms and oligarchs and taken out of the ruble economy and out of the country. The government's inability to reform or even address these problems will lead to a serious depression, which will affect the country for years and probably lead to the early deaths of millions. 1 p.m. We hire a new staff member for the Development Department. No one knows what her nominal salary is actually worth. She seems interested in the paraphernalia I have scattered on my 19th century desk: mobile phone, PowerBook, PalmPilot. It's all equipment that I check for damage immediately when I fall on icy pavements in the winter, before I make sure I'm OK. How to justify what it cost in this environment?      4 p.m. The Spanish minister of culture arrives to open a Goya exhibition. In stark contrast to the economic darkness outside, the grand hall's gilt roof shines in the lights of TV crews. She is allowed to arrive through a special stair reserved for ministers of state--yet others are reserved for prime ministers, presidents, and royals, as they were in imperial days. The Hermitage and St. Petersburg are rich now only with remnants of the empire's immense wealth: architecture, art, and history. I think about next year's government budget and how to justify the Hermitage's special line, in the face of more immediate human needs. It seems strange, but perhaps even more important than ever, to preserve this intellectual wealth. Today may be nothing compared with the sacrifices of uncountable "Hermitageniks" during far worse situations in the museum's history.

Nick Hoffman is assistant to the director for economic affairs at the Hermitage Museum in St. Petersburg, Russia.