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Are You A Patriot?
June 5, 2006 18:08

Russians are true patriots in spiritual sense and almost turncoats materially. But it is also a big question what Russians perceive as superior.

The rouble, the Russian currency, lies somewhere in the material sphere. It’s been often seen as something treacherous. A vivid example is the discussion on the symbol for the rouble in the State Duma. "Because of the financial crises the rouble should be represented by the Indian national hut called wigwam", says Oleg Shein, from Rodina (Motherland) faction. Phonetically this sounds like a Russian informal and somewhat rude expression 'fig vam' which stands for "and you’ll get nothing".

It’s just one indication of how we take one of the oldest monetary units in the world. Suppose we declare an amnesty on its past follies. Let us just probe into its record for the last fifteen years.

In the 1990s, market reforms saw prices soaring 10,000 times higher. The rouble was eventually rebased on January 1, 1998, with one new rouble equaling 1,000 old roubles. Rebasing did not solve fundamental economic problems faced by the Russian economy at the time, and the currency was devalued again in August 1998 following the Asian financial crisis. The rouble lost 70% of its value against the U.S. Dollar in the six months following August 1998.

That was a heavy blow. From that time on, we lost trust in our currency falling back on dollars. Some of the population receives their salaries in dollars, although it is not allowed officially. Employees get around it somehow.

Valuable products, especially those produced abroad, are usually sold in dollars, or put in conventional units universally understood to be dollars. Huge sums can be easily approximated to a round number in dollars.

It’s so widespread that when Russian Finance Minister Alexey Kudrin called on Russians to keep their money in roubles, pledging no crises, many took it as a joke. Rumours of financial collapses never vanish from Russian streets. But there are changes underway. The internationally weaker dollar dropped a few roubles from its peak point of 31.86 in December 2002 to the present 26.94. Amidst something which resembles an economic growth people with dollar-based salaries or those keeping their savings in this currency lose money.

"In many cases people still prefer to receive dollar-based salaries. Although statistics show that they are worse off, they still believe in the dollar in the medium to long term," said Catherine Stalker, partner at PricewaterhouseCoopers. Meanwhile, the prospects for the dollar in this country are not so optimistic. Oil revenues strengthen the rouble and although Mr. Kudrin is not quite satisfied with it, there seems little to be done about it.

Those who are thinking of ways to store their savings are now looking to real estate because euros are not so frequent here. Traveler’s checks are not that common in this country, either, especially as a means of storing money. Recently, the State Duma passed a law on the graphic symbol of the rouble and also gave its initial approval to outlaw any mention of the dollar by state officials in cases where they could refer to roubles. The moves are designed to boost the image of the national currency and promote it abroad. Apropos, it will also become convertible from July 1, 2006, after all currency controls are removed.

The dilemma, though, is still renting us apart. On the one hand, the leviathan has always acted against the interests of its people so why trust it this time around? On the other hand, the USA is doing its best to ruin itself, spewing billions into wars. The current powers in Russia need to ensure long-term stability and confidence in its policies and only this may finally drive Russians to be patriots not only of Leo Tolstoy and Yury Gagarin, but also of their national currency.


Tags: Russian rouble Russian economy    

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