A comment from one of my friends in relation to a post a few days ago about buying things in a dollar only shop in Moscow set me reminiscing about the change in what was and was not allowed in Russia in the period I spent there.

By the time I made my first visit to Moscow in December 1994 the dollar only shops had already disappeared.  Anyone could have dollars to spend; the restriction against Russian’s holding US currency had been repealed; it was just a question as to how one might get ones hands on them.

It was a period of such rapid change that I recall that when I tried to research guide books before my trip, the only ones in the shops still recommended taking cigarettes as gifts for local contacts.  I didn’t know much, but I knew that Philip Morris and BAT were already trading extensively in the newly opened market.

In that period of late 1994, early 1995, many transactions were conducted exclusively in dollars; rouble inflation was rampant, so the only way to set a stable price was to use the trusty buck.  Prices in the restaurants I went to, in the supermarket I shopped at, were all quoted in USD.

You had to have nice new, shiny bills.  Any crumpled or less than pristine notes would be rejected.  I became so accustomed to seeing only crisp new notes that when I went to the USA for a visit, I was astonished how scruffy the money was there.  Over the years I developed a relationship with a bank teller in the Clydesdale Bank at Piccadilly Circus and would go to her every time I needed currency, as she understood the ‘fresh bills’ requirement.

Some time in 1995 the Russian law was changed to prohibit the use of American cash in any transaction.  Infringements would result in a 100% penalty.  Showing true Russian flexibility most establishments complied.  The prices on the menus and on the shop shelves were still in dollars, but there was a sign over the door that disclosed the applicable exchange rate.  As nothing had been done to control rouble inflation, the rate changed daily.

If you paid in cash, you could calculate the number of roubles that would be required; if you paid by credit card you might be charge in dollars, deutschemark or finmark depending on some whim that was never apparent to me.

Then the authorities stepped in again and forbid the use of US dollars to price anything.  And once again, natural ingenuity found a solution: the introduction of the universal currency unit.  Entirely coincidentally the exchange rate for the ECU to USD was 1:1.  After a little bit of reprinting of price lists, everything carried on as before.

Just to show, there’s a way around most obstacles.

The commercial considerations I raised yesterday clearly had an impact on individuals; Russian people have seen a lot and survived terrible weather and totalitarian governments, the upheaval of fast track capitalism was just the latest thing to come along in the mid 1990s.  Some people adapted very quickly, for others it took a little longer.

The strategy of the firm I worked for was to hire bright young people straight from University and to train them in-house in the ways of audit and tax advising.  I made surreal visits to the Finance Academy and Moscow State University to give ‘milk round’ type presentations, followed by one to one interviews in our offices.

I interviewed a lot of people.  I tried not to be overly swayed by the candidate’s facility with English, although at the time they were required to speak it.  Instead I tried to get them to speak to me, about anything.  At first, I did mental somersaults with glee if I could get them to say something, anything, other than, they thought they wanted to work for the firm because it would be interesting.

‘What do you think would be interesting about it?’

‘To work with a foreign firm would be interesting.’

‘Really?’

‘Yes,  it would be interesting.’

As time went by I developed a better array of questions, but the candidates also developed better answers; so much so that I sometimes wondered if some enterprising person had prepared a crib sheet for them.  I’d like to think so.

The Russian trainees’ salaries were quoted to them in US dollars, but were paid in Roubles as was required by law.  Every month, the trainee then had to be given time off one afternoon to go to the bank where they withdrew their salary in Roubles, converted it to US dollars and then either redeposited it in their US dollar bank account or kept it in cash.

There was fierce competition as to who could go to the bank first, as in a period of rapid Rouble devaluation, the real value of the salary could fall from one day to the next.

Having a salary paid by reference to a dollar amount was probably the most interesting thing about working for a foreign firm for many of my Russian colleagues.  Without access to US dollars, people who, in the Soviet era, enjoyed a comfortable lifestyle were sinking into poverty.

Access to this dollar salary for the young members of a family changed the power balance in many homes.  The parents, perhaps long serving civil servants or teachers earned barely nothing from their jobs, but did retain their rights to the family flat.  The children had the cash, but not enough to move out and get their own home as the cost of accommodation in Moscow was astronomical at the time.

My Russian teacher, Volodya, a lecturer in Russian as a foreign language at The People’s Friendship University, earned the money he needed to keep his family fed and clothed by teaching me, and others like me, at a dollar rate per hour, but could not afford to give up his university job, as to do so would lose him his apartment.

His relative affluence came from the happenstance that he had learned English as his second language and could therefore teach incoming expats.  He had learnt English at a time when it was very unlikely that he would ever have the opportunity to meet anyone who spoke it as their first language.  But then the Soviet education system taught all its students a foreign language, many of them not obvious choices; I saw CVs with Hindi and Africaans as second languages, although never had the opportunity to test them on it.