Moscow Shopkeepers, Customers Eager for Privatization Steps

CLOTHING store No. 2 is full of activity. The sound of shuffling feet fills the stuffy air as people move from counter to counter.Despite the abundance of potential customers, sales clerks sit impassively at counters, some resting their heads in their cupped hands. They are not very busy because people don't actually buy much. The dour expressions on shoppers' faces are an indication of their dissatisfaction with the design and quality of the apparel. The stagnant scene at the store may soon change radically, however, provided political struggles yield to economic reality. Moscow Mayor Gavriil Popov issued a decree late last month launching the privatization of small- and medium-sized shops here. But implementing the decree is proving difficult because of opposition from Russian government officials and the Moscow City Council. Saying he was tired of the political infighting, Mr. Popov announced Sunday he was resigning. It is too early to say how the move will affect privatization, officials said. If privatization moves forward, Oleg Ozerov, director of Clothing Store No. 2, said he is planning big changes to take advantage of the establishment's prime location. m working on deals with foreign partners," he said. "That will give us the ability to bring in clothes from places like Turkey - things that people here want to buy." Such entrepreneurial activity is exactly what city officials want to encourage through privatization. Larisa Piyasheva, in charge of privatization for the city, says interest is high. Under the Popov decree, employees have the first chance to buy the stores. The process should take two months, Ms. Piyasheva said. It will cost employees 1,000 rubles ($20) per square meter to buy a store. Businesses not bought by employees will be auctioned. The mayor's office wanted to launch privatization several weeks earlier, but political squabbles held things up. The City Council continually fought Popov, pushing its own plan to lease small businesses for one year. The council may use Popov's resignation to annul the mayor's decree and proceed with leasing instead, but yesterday privatization was proceeding. The first stores were expected to be privatized in a week or so, said an official in Piyasheva's office. Mr. Ozerov said leasing can't stimulate business as much as outright ownership. "An owner feels completely different about his business," he said. The director, who studied economics last year in Czechoslovakia, feels his store will have no trouble making a profit, but says many will fail because few people know even the basics of market economics. Milk Store No. 10, located on an obscure side street in central Moscow, is one business that could have problems. Shift manager Lyuba Tsareva said the staff favors ownership, but added no one had any practical experience in running a business. As Ms. Tsareva spoke, people poked their heads into the store only to find all the shelves and counters bare. She said she wasn't sure how the store would obtain supplies in the future, adding she hoped the state-supply network would continue to function. Piyasheva said privatization, accompanied by price liberalization, scheduled for Jan. 2, would fill stores with goods by relying on the law of supply and demand. If producers can get top value for their wares in stores, she reasoned, they will stop withholding their goods from the state, or diverting them to the black market. It all sounds fine to Ozerov, but he says people must be prepared for anything. Plans, he added, have a way of changing quickly given the chaotic economic and political situation. "Their intention is right," he said. "But it probably won't work out the way they envision it."