Novorrossiyisk, Southern Russia, LATE 1997.

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“You see that’s the problem with Russia” Steve reasoned with the benefit of having lived in Novorossiyisk since the late eighties and having commenced drinking since the late afternoon. “She can only handle one issue at a time. Give the politicians simultaneous problems and all you end up with is a …is a.. is a bardak!” He thumped down his glass down to emphasise both his profundity and his mastery of Russian slang acquired at his day job, testing and treating cargoes loaded onto visiting oil tankers. Steve did have a point though, there were worrying signs with the economy, political in-fighting was rife, there remained tensions with neighbouring States and the latest weather forecast had everyone scared, most of all his Ukrainian borne wife who had rung repeatedly urging him to come home.

The previous year Boris Yeltsin had been returned as President thanks to a pragmatic West that provided temporary economic support to the faltering economy rather than see the Communist Zuyganov be popularly elected, and the leading Oligarchs who grouped together to finance and orchestrate an election campaign the like of which had never been seen in Russia. Coordinated by Boris Berezovsky and Vladimir Gusinsky they and a number of other newly enriched businessmen provided funding, media support – they owned many of the leading publications and popular television stations, and hired western campaign consultants to put the result beyond doubt. It proved to be a profitable arrangement, with their finances secured against grossly undervalued state assets which the businessmen later elected to keep. But after a brief period of relief and elation that followed the election, the fundamental problems returned. Inflation was worsening an economy already severely damaged by the recent $5Billion war with Chechnya and GDP was continuing to fall. Ordinary people were growing poorer again. Although a peace treaty signed was signed in May 1997 with the newly established regime in Grozny led by the former rebel Ashlan Maskadov, a deal partly brokered by Berezovsky despite no formal position in the Government, resentment and tensions remained among the Chechen clans, particularly along the Dagestan border.

Selection_587Disagreements also continued with the Ukraine although these were partly alleviated with the signing of the treaty for the Partition of the Black Sea Fleet. This divided the ships, artillery and aircraft approximately four to one in Russia’s favour but much more importantly, Russia retained Sevastopol in the Crimea. Like Novorossiyisk, Sevastopol is a natural deep warm water port. Unlike Novorossiyisk however which is a mainly civilian installation responsible for much of Russia’s dry cargo trade and western seaborne oil exports, Sevastopol is a military port and the home of the Soviet and now Russian Mediterranean Fleet. The 25,000 troops included under the twenty-year deal for the port were put there to ensure that this strategic location, which many Russians felt is their land anyway, would remain under Moscow control until 2017.

The real body blow to the Russian economy in 1997 did not come from disagreements or territorial disputes with neighbouring States however, rather it came from Asia in the form of a flu epidemic. It all started with Thailand, one of the new Tiger economies. In July the Thai Baht crashed quickly followed by the Ringiit and the Rupiah. Soon nowhere in south east Asia was safe and economies and currencies from Singapore to Hong Kong lost significant value to the US $. Although the contagion did not attack the rouble directly, Russia’s international trade was still comparatively thin, what it did do was create a worldwide economic slowdown and commodity prices, in particular crude oil, fell sharply. One thing you can bet on with certainty is when the oil price reduces so does the value of the rouble and in 1997 the crude price dropped from around $32 to less than $20 per barrel. The result was yet more pressure on the economy and the rouble itself now fell RUR 6 to the $ from parity in 1993.

“You mark my words, if the economy fails and if the West don’t stop interfering and criticizing Russia’s behaviour on its borders things could get nasty, like the storm that’s about to hit”, Steve said as he drained another glass of “Semyoka”, Baltika 7, a potent brew. The storm he referred to was the renowned Novorossiskaya Bora (mega-storm) forecast to hit that night. Capable of hurricane strength winds for days at a time, Boras usually appear in November or February when confrontation of the European Russian anti-cyclone with the Mediterranean cyclone system occurs. Unlike hurricanes, which develop at sea and lose their strength over land the Boras blow from the land over the Caucasus foothills and channel down into the harbour. Coming from inland at that time of year the actual air temperature can be -20C and the chill effect with the wind speed is considerably more. The effects can be devastating. Mature trees freeze solid and snap off in the blasting wind, power lines ice up and collapse robbing residents of essential heat, cars can be blown off roads, but the real damage is to ships. The sea spray whipped up by the streaming winds freezes almost before it lands covering the ships on their moorings in ice that can grow to many centimetres in thickness. This additional topsides weight coupled with the sea state and wind on the superstructure is capable of capsizing even large ships if the ice is not hammered away quickly enough. In just one storm in Novorossiyisk, six vessels capsized and several crew drowned only metres from the dock.

We got up to leave, intent on getting home before the storm grew. The wind could already be heard buffeting the windows. Steve, swaying even before getting through the restaurant door as if in preparation turned “I don’t know, low oil price, pressure on the rouble, disputes with Ukraine, I wonder what the future will bring?”