Russia: Lawmakers Move To Bolster Ruble's Prestige

(RFE/RL) Russian lawmakers on May 24 gave initial approval to a bill that would slap hefty fines on stores and other businesses that list prices in U.S. dollars or euros. The legislation would also punish ministers who publicly cite sums in dollars instead of rubles.

MOSCOW, May 26, 2006 (RFE/RL) -- If backers of the bill have their way, the word "dollar" will soon largely disappear from the vocabulary of government ministers and their subordinates.

Those caught flouting the rule in public would be fined.

Businesses that continue to set prices in foreign currencies would also face fines of up to 50,000 rubles ($1,850).

Deputies are considering giving more weight to the ban by extending it to cover the media and legislators.

The End Of A Love Affair With The Dollar

The draft law seems to aim more at boosting pride in the ruble, which has achieved remarkable stability after a bumpy ride in the 1990s, than at actually consolidating the economy.

Valery Grebennikov, the Unified Russia deputy who introduced the bill to parliament, told RFE/RL's Russian Service that the purpose of the bill was first and foremost patriotic.

"You live in Russia?" Grebennikov said. "Use the name of the national currency. The main concern is to foster a sense of national pride. And national pride perhaps means that you don't look upon your flag without emotion and don't think about your national currency without respect.

With the exception of Communists, deputies nearly unanimously backed the bill, which sailed through the first of three required reading on May 24.

Even deputies from the Motherland (Rodina) party, usually opposed to legislation pushed by the pro-Kremlin Unified Russia party, were enthusiastic.

"Today we live in a country where a huge number of people live below the poverty line," said Motherland Deputy Ivan Kharchenko on May 24. "They are irritated by the very word 'dollar' or 'euro,' especially coming from officials. Of course, they become suspicious: 'What are these people doing, in the interest of which countries, which governments, are they working?’ We serve the country in whose currency we express ourselves.”

Conditional Units No More

The dollar became a sort of unofficial currency in Russia when the ruble slipped into freefall following the Soviet collapse. Even today, many businesses in Moscow and St. Petersburg, particularly up-market restaurants, list prices in "conditional units" -- one unit being worth somewhere between $1 and 1 euro.

But as Russia's economy booms under the influence of high oil prices, the official drive to rebuild the ruble's prestige is also growing.

A currency-exchange point in Moscow on May 25 (RFE/RL)

President Vladimir Putin has long been calling for full ruble convertibility and in his May 10 state-of-the-nation address said he wanted all restrictions on trading in the currency to be lifted by July 1.

To give the ruble a final seal of respectability, Russia's Central Bank has been instructed to come up with an official ruble symbol.

The proposal to ban official mention of the dollar, however, has drawn scorn from a number of high-ranking officials and politicians.

Skeptical Voices

Deputy Prime Minister Aleksandr Zhukov, who is in charge of the budget, economic development, and monetary policy, said quoting rubles prices for goods sold abroad in hard currency made no sense economically.

Finance Minister Aleksei Kudrin dismissed the bill as absurd and said it would force officials to wrestle with unwieldy multiple-zero ruble figures.

Communist lawmakers also predicted that top officials will avoid sanctions while the average businessman, in the words of one Communist deputy, "will have his skin ripped off."

Yevgeny Yasin, a former economy minister and currently head of the Higher Economic School in Moscow, is also skeptical.

"If you want to give a bribe to an official, they prefer taking dollars or euros," Yassin said. "I can count my friends' salaries in dollars, who will forbid me to do so, what will they do to me for this -- put salt on my tail? No. This will have no influence on economic progress whatsoever. It is simply rubbish designed by people who have nothing else to do in economics."

Sergei, a middle-aged journalist for a Russian newspaper, agrees the habit will be hard to break. But he is optimistic that the day will come when Russians no longer think in dollars.

"I think it will take a long a time to disappear, but no habit disappears quickly," he said. "It has been entrenched for 15 years, it will vanish gradually. But it is a sound process, in my opinion, it's good. It shows that the Russian economy and the national currency are consolidating.”