Page 30 - Countertrade

Barter: A Russian Solution to Financial and Economic Meltdown

(Barter: The first sign of a siege economy)

Russia is one of the world's richest countries. It is resource rich and has
an intelligent, well-educated population. Its industrial base is extensive.
Yet despite these attributes Russia still has great difficulty in financing its
own growth and imports.

In 1991 the collapse of the command economy and the introduction of a
free market economy one saw a vacuum created in which money all but
ceased to operate efficiently.

Money’s functions of being:

1 a medium of exchange,

2 a store of value, and

a measure of wealth
3

were eroded and confidence plunged. Firms struggled to adapt as
inflation spiralled upwards and the environment became increasingly
turbulent.

With the disintegration of the Soviet Union and the rise of the market
economy system it was widely thought that countertrade would go into
terminal decline. It did not happen.

Against this backdrop two Russian enterprises of the VOS (Association
for the Blind) industries responded by adopting a proactive growth
strategy predicated upon the development of a comprehensive barter
system. For these enterprises this pragmatic strategy was to prove a
decisive factor. A factor driven by an entrepreneurial mind-set which
would lead to open acceptance and prosecution of free-market concepts
and practices.