Russians Fume as Prices Soar : Reforms: Although warned, shoppers are shocked by the huge markups. Yeltsin's popularity is being put to its toughest test.

TIMES STAFF WRITER

Prices shot upward across Russia as President Boris N. Yeltsin, braving consumer fury to push forward his boldest economic reforms yet, on Thursday lifted the state controls on prices that had kept Soviet goods artificially cheap for decades.

Russians had been warned weeks ago that Yeltsin's government, seeking to balance the shortage-plagued market by encouraging suppliers to produce, would lift the ceilings totally on most prices and allow others to triple and quadruple.

But on Thursday, it still hurt.

A cane-toting pensioner--fuming--stalked out of the Smolensk Grocery Store, too aghast at the quintupled prices on candy--and the pork that cost almost two months' pension per pound--to buy anything.

"What I've seen today is a major league, damn mess," said the pensioner, who identified himself only as Leonid. "The time will come to take a machine gun. . . . For now it's calm, it's the first day. But we veterans say there will be blood spilled in Moscow, and the women will start it because they have to feed their families."

Prices on bread and dairy products generally tripled; vodka went from 10 rubles--about half the average daily wage--to 45 rubles a bottle. Most non-food stores were still closed Thursday for repricing and recovery from New Year's holidays. But industrial goods were expected to at least quintuple in price.

Neighboring Ukraine and Belarus, forced to follow suit or risk their produce being snatched up by invading Russians in search of a bargain, also raised their prices. They also prepared to launch a rationing system that would effectively bar non-residents from buying their goods but that would turn the ration coupons into an alternative currency.

Letting loose with a long, creative string of Russian profanities describing the sexual tastes of the politicians who decreed the price reforms, a shabby, 40-ish man in Wine Shop No. 14 on Moscow's Garden Ring road snarled, "If only I could lay my hands on one of those rulers!"

The grumblings across Russia appeared likely to turn into the toughest test yet of Yeltsin's popularity and his ability to bring the country through the excruciating transition from socialism to capitalism, with all the unemployment, sudden poverty and dislocation it will entail.

"We trusted Yeltsin when he was fighting for democracy," said Sergei Abramov, 27, a gym instructor, after examining ham that sold per pound for about his monthly pay. "But this is no longer a democracy--this is robbery of the people. If he doesn't change this, his days are numbered."

But as a sales clerk pointed out to the enraged vodka buyer in Wine Shop No. 14, at least there was now vodka on sale, and the ration coupons that Muscovites have needed for months to buy vodka, sugar and cigarettes have been canceled.

Still, there were few signs that the price reform had brought any more abundance than the April price increases. Those price rises had stimulated a brief rush of supplies, then quickly fell too far behind inflation to make a difference.

This time, store managers said, the shelves did not fill up immediately because most wholesale suppliers were not back at work yet; retailers were further inhibited by general confusion about how the price reforms should work.

"I don't know anything about this grand plan for price liberalization, only what I hear on TV," said Victor Kalinin, manager of Moscow's Food Store No. 29. "Everything depends on the suppliers. I have signed contracts with Kazakh and Russian meat suppliers, but they only begin sending food a month from now. I don't know what happens in between."

At Food Store No. 38, Deputy Director Lyudmila Shchipkina said she had been forced to close the store because there was simply nothing to sell. "And I don't even know whether we'll get anything soon," she said. "There's no information on that account, and we haven't the slightest idea what prices we'll set, either."

The lines to stores that were open on Thursday did appear to be noticeably shorter than the especially long queues that snaked into the streets before New Year's. But that was only because consumers had stocked up so well before the holidays that they needed little now, shoppers and sales clerks said.

"Everyone has already accumulated enough for the next month," said Valentina Vorobyova, a fruit seller at the central Smolensk Grocery Store. "Today, everyone is just touring around and looking at prices--no one is buying."

Vorobyova said she was selling mandarin oranges for only about a ruble more than last week--about a penny more, according to the present, open-market exchange rate. The giant jars of tomatoes that she was selling had increased by only about two rubles, from 19.70 to 21.80.

But prices on other state-produced items rocketed.

At a beer hall near Moscow's Central Farmers' Market, the watery, sour-smelling brew sold for 6 rubles and 50 kopeks a mug, compared to one ruble just three days ago. Although the smoky hall was full, there was no longer a line out the door.

Vasily Chugunov--a 34-year-old plumber still in his stained, padded work jacket slurping methodically through the two mugs at his elbow--appeared to be using denial to deal with the new prices, saying: "There's no way this is going to affect me. No way. I'll have my morning couple of pints no matter what. In the long run, it's not me or my family who will have to pay for it. It's you people living on my block. I have all your hot water taps in my hand, and I'll squeeze hard till you guys buy me my beer."

Polish pork that was sold in the Novoarbatsky Grocery Store, one of Moscow's largest, cost almost 500 rubles per pound, drawing expressions of blank astonishment from shoppers. Although 500 rubles is only about $5 at the current rate of exchange on the open market, it amounts to more than the average monthly wage.

"A worker who makes 300 rubles a month can buy only 300 grams of that (Novoarbatsky pork) with all the money he sweats for at work the whole month!" groaned Alexei Kovinov, a sewing-machine repairman.

Consumers had grown used to seeing such astronomical prices at farmers' markets, where private growers sell their own produce, or at "commercial shops" selling mainly imported luxury goods or privately produced items. But shoppers had always had the sanctuary of the cheaper state stores. There, they might have to stand in line for hours. But they knew they could buy most essentials at "socialist" prices.

The markets were closed on Thursday. Commercial shops, however, reported that they were not immediately raising their prices--possibly because they realized they were already on the verge of pricing themselves totally out of reach.

To complaints that the government should fix the economy at the expense of the rich and not the ordinary consumer, prominent Russian economist Nikolai P. Shmelev replied on television that there was no other way out.

"The government, the state, society wants to correct its 70-year-old mistakes at your personal expense," he told viewers bluntly, "and to pull the country out of the hole it fell into. Someone has to pay for that.

"If you want our millionaires to pay for it," he continued, "that will be enough to last for about two weeks. Until you are ripped off, nothing can be accomplished."

Viktor K. Grebenshikov, a reporter in The Times' Moscow Bureau, and researchers Sergei Loiko and Andrei Ostroukh contributed to this story.

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