AN ISLAND OF CAPITALISM
Soviet experiment in economic and democratic freedom
Sakhalin CALL Alexei Zimin a farmer, and he bristles. 'Not yet,' he says, tugging at a shaggy, Tolstoyesque beard. 'We are still ordinary, un-free Russian peasants.' Mr Zimin was being unnecessarily modest. His 60-hectare property on Sakhalin Island is one of the first visible signs that capitalism has a future in the Soviet Union. Even as Nobel Prize-winner Mikhail Gorbachev prevaricates about the issue in far-off Moscow, the former Tsarist penal colony of Sakhalin has set itself the task of complete liberation from command- administrative socialism. Mr Gorbachev, along with members of the Soviet parlia- ment who are preparing to vote on Satur- day on a long-postponed plan to introduce free enterprise, would benefit from the trip east to Mr Zimin's farm.
Mr Zimin, his wife Zoya and their three children are among the first families on Sakhalin to take advantage of a controver- sial experiment in 'private farming' spon- sored by the island's new non-communist regional government. Their land, once part of a nearby state collective farm, was granted them for a nominal rent. They expect to be allowed soon to purchase the property. Meanwhile, they have a line of private credit to purchase tools and seed to develop the farm as they see fit. More significantly, the vegetables, fruit and meat they produce can be sold locally for what- ever the market will bear. Zoya Zimin, a Moscow-trained economist, is more willing than her husband to call a spade a spade. As she trots up on her horse and dismounts by the trailer and wooden shack that make up the couple's farm, she gently contradicts Mr Zimin: 'We don't depend on anyone else — that's what freedom is.'
There is a certain irony in the fact that the first shoots of free enterprise have appeared on Sakhalin. For over a century, the island haunted the foggy Siberian Pacific coast of Russia like a bad dream. Roughly the size of Ireland, this fish- shaped pendant of land was the scene of a harsh 19th-century experiment in forced labour. Few of the thousands of convict- exiles sent here to work the coal mines ever made it back. Dr Anton Chekhov was one of a long list of horrified visitors to what he called, simply, 'hell'.
In a celebrated account of his journey to the island in 1890, he diagnosed a malady called 'Sakhalin fever, which is the special quality of despair'. Other Victorian travellers were more lurid. One English Victorian called it 'a land of moral dark- ness and abject misery'. The Tsarist prig- ons were finally closed in the first decade of the century, only to re-appear again as infamous ports in Stalin's Gulag Archipela- go. By then, Sakhalin was well into a new, dark reputation as a Soviet 'forbidden zone'. Bristling radar and anti-aircraft in- stallations kept watch for capitalist machinations in the Pacific through the cold war. When a South Korean jetliner strayed over Sakhalin air space in 1983, nervous Soviet commander's ordered it shot down with all 265 passengers and crew on board. On the ground, an authoritarian Communist Party organisation kept equal- ly tight control over dissent.
When change finally arrived here, even Moscow was taken by surprise. A protest mounted by some 1,000 people in Yuzhno- Sakhalinsk central square two years ago grew rapidly into one of the country's first genuine pro-democracy movements. The local Party leader resigned, and his re- placement vowed to work with Sakhalin's `greens' and democrats. News of the civic revolution here was briefly kept secret from the rest of the country because, as one Moscow correspondent later re- counted, 'it was believed that the spark of Sakhalin would ignite a flame in every region of the country'. What Moscow appeared most frightened of was a chal- lenge to its colonialist position on the island. In both the Soviet and Tsarist periods Sakhalin fish, timber and oil re- sources were shipped to the mainland with hardly a glance at local needs.
'My Sidney is a feminist.' The fears turned out well-founded. The Sakhalin protests were only a prelude to a sustained nation-wide revolt against the centre. Typically, Sakhalin was again in the forefront. Just before local elections last year which swept out Party machines in Leningrad, Moscow and other cities, Party leaders in Sakhalin wooed a crusty, 52- year-old Moscow economist named Valen- tin Fedorov to the island. They were 'intrigued by the lucrative possibilities of his proposal to establish 'free enterprise zones'.
At the time, Mr Fedorov was rector of the prestigious Moscow Plekhanov Insti- tute, and an expert on Western economies. He had been lobbying since the early 1980s for a chance to test his theory that de- centralisation together with economic liberalisation could be made to work first in a limited territory and act as a spur for the rest of the economy. 'My colleagues in Moscow used to make me feel like a dissident, someone who was trying to sneak capitalism into the country,' he said later. 'Then when perestroika started, a lot of those people just changed their hats and started to talk like me.' The economist's dream for the island was simple: establish private banks and industry, permit private farming, nearly unrestricted foreign invest- ment and the free circulation of foreign and Soviet currency — and then let the state enterprises 'compete or surrender'. Even now, it is much more radical than any of the plans being considered by Moscow. But Mr Fedorov has gone one step further. Instead of being a consultant to island authorities, he has become the authority. Local democrats invited him to head their list of candidates in the local elections. He won convincingly, becoming, last spring, the first chairman of Sakhalin's regional government outside the Party apparatus.
Reaching the island today, after an 11-hour transcontinental flight from Mos- cow (it took Chekhov three months to make the journey by land and river), a visitor is at first tempted to believe that little has changed. Even before passengers are allowed to disembark at the airport in Yuzhno-Sakhalinsk, the island's capital, a KGB guard examines passports and visas. But a few days here are enough to provide a completely different image. Fedorov was away from the island, on a trip to the United States, but other local government officials were exuding optimism about their plan. 'If we are successful, we'll outstrip the rest of the Soviet Union,' boasted Anatoly Aksionov, leader of Sakhalin's district council. Several foreign investment projects and joint ventures have already opened up shop, and enthusiastic partici- pants, like the Zimins, in the various `capitalist' schemes are multiplying.
However, success is far from assured. Representatives of regional government are having trouble getting official approval from the Russian parliament to launch their free enterprise zone on 1 January. Sakhalin belongs constitutionally to the Russian Republic, and reformist Russian deputies are wary of portions of the prop- osal which give the island sole control over its mineral and maritime wealth.
Even more worrying are the growing shortages of foodstuffs and problems in services, which some people say are being engineered by party apparatchiks who are uncomfortable with their new role in opposition. The week I was there, much of the capital had no heating or hot water. The charge of sabotage, not surprisingly, is vigorously denied. 'The problem is that the Professor really hasn't got anything to offer the residents here except an idea,' com- mented Vitaly Yelizarev, head of the city Party committee of Yuzhno-Sakhalinsk. And many of his people have no experi- ence in leadership or organisation.'
Local democrats admit there is some disillusionment with their hero, but they are quick to point out there is no alterna- tive. 'We just have to learn how to operate in a new era,' says Pyotr Lakutin, editor of a new newspaper called Free Sakhalin: Mr Fedorov is equally adamant that there is no turning back. 'We can't wait until they sort out in Moscow what a market economy is,' he said in a recent interview with a Moscow newspaper.
But the quiet, fascinating experiment on Sakhalin may fall victim to a problem which has nothing to do with economics: it involves the uncertain status of the Kuriles, four tiny and otherwise insignificant islands which are under Sakhalin's jurisdiction. The islands are claimed by Japan, who has been disputing the ownership of Sakhalin with Russia for over a century and a half. Japan governed the entire island for part of this century, until Russian forces swept her out during the closing days of the second world war in a bloody operation that had the unofficial sanction of the United States and Great Britain.
Tokyo has since refused to sign a peace treaty with the Soviet Union — and by Implication unlock its aid and technology for the Soviet economy — until the Kuriles revert to Japanese ownership. So far, any whisper of a compromise by Moscow (a leak .earlier this month suggested two of the islands might be handed back) has aroused the fury of the Soviet right wing, not to mention local Sakhalinites. Mr F edorov has joined Party officials in insist- ing the Kuriles remain Soviet even at the cost of future Japanese and foreign invest- ment. The conflict between nationalist Pride and economic self-interest could thus cripple Sakhalin's experiment with capital- ismbefore it begins to prove its mettle. Mr Gorbachev achev, as it happens, is planning an official visit to Japan next April, a trip regarded as crucial to establishing the Soviet Union as a trustworthy partner in Asia: Untangling the web of economic and political priorities on this side of the world seems a reasonable challenge for the latest recipient of the Nobel Peace Prize.
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