#47 | September 10 - 24, 1998  

by Mark Ames

"Only the paranoid survive."
   -Andy Grove

Imagine this. You're in a country where the shock of sudden impoverishment and famine ignite a nationwide revolt. Riots, which had for weeks been erupting up in the provinces, break out in the capital. Most police look on silently, afraid of getting stuck on the wrong side politically. Rioters smash windows, looting overpriced stores of their remaining goods, and burn down the banks that had burned them. Black smoke fills the sky, while roadblocks made from burning tires and overturned trolley buses litter the streets. Small arms fire can be heard in all districts. Speeding Mercedes Benzes with blue sirens on their hoods fire at the crowds to keep them away. Private arsenals are brought out in the open as lawlessness spreads. Foreigner-owned vehicles, easily recognizable by their yellow or red license plates and round-headed passengers (i.e., unarmed and respectful of human life), are stopped by mobs and stripped of all valuables; those who resist are savagely beaten. All authority has broken down.

The U.S. Embassy has chartered two Delta 757s and two Finnair 757s to evacuate its citizens. But there's a hitch: twice as many Americans have arrived than were planned for. Half will be forced to stay behind. Women and children first. Only those with American passports are allowed on-board; husbands and wives from international marriages are separated because one only has a green card. Girlfriends or boyfriends are left behind. And so are the majority of foreigners and natives hoping to flee. As the jets take off, those stranded sit like naked prey in the cold airport lobby, waiting through the day and into the night. And still no U.S. chartered jets. In fact, no jets at all. The airport has been closed as the uncertainty grows and the armed forces become paranoid. All flights in the region are prohibited, with orders to shoot down anything that violates the ban.

Successful looting requires a bit of commercial savvy. In the foreground, one guy makes off with a foreign TV, while in the background, ten men steal the burning shell of a car and nearly burn to death.

It may sound like the plot of a 70s disaster flick featuring Charlton Heston, George Kennedy, and Jim Brown as the black cop who dies in the first 40 minutes. But the events above actually follow the way Jakarta went during riots there in May of this year. The chaos, the looting, the mob roadblocks, the stranded, terrified expats in the airport-all of that actually happened. Only the ending about the shutting down of airspace was invented, because it seems so plausible here in an ex-Superpower caught up in anarchy.

On Wednesday evening, ORT reported that Russian interior ministry forces have been put on alert nationwide to prepare for unrest.

In light of this, the big question on people's minds in Russia is: can this happen here?

Paul Simington, the chairman of the security committee at the American Chamber of Commerce in Moscow, admitted that evacuation in the event of social upheaval has become the biggest concern in the organization. "Among Chamber membership, the issue of evacuation seems to be the number one topic," he said. "A significant number of members are asking around about contingency plans by the U.S. Embassy to evacuate citizens."

For the moment, none of the embassies contacted by the eXile, including the U.S. Embassy, have made any specific plans to evacuate citizens, although all do, as a routine matter, have contingency plans. The specifics of these plans-that is, how to get out of Moscow-remain secret until the notice to evacuate is issued to the community.

"There's no talk now of [evacuating our citizens]," said Patricia O'Donnell, Deputy Press Secretary for the British Embassy in Moscow. "There have been calls to the consular section seeking advice on this issue, but we've told them there's no reason to change plans now."

One major reason why embassies aren't openly preparing their citizens for evacuation from Russia is that such a move could have serious diplomatic implications: it could both destabilize the already shaky regime, and permanently damage relations.

Nevertheless, foreigners and foreign companies are much quicker to react to such emergencies, if only because of their insurance and liabilities. Many are reported to be already working on their own evacuation plans, although none would admit on the record.

One American businessman who would go on the record, W. E. Butler, a partner in the CIS Price Waterhouse Law Firm in Moscow, completely discounted the very notion of evacuation. "I don't think there's any prospect of [a Jakarta scenario] happening," he said. "I've been here through the tanks in '93, through it all. I don't believe it."

While the AmCham's Simington agrees that he doesn't believe an evacuation will be necessary, he said that he is already noticing both expat flight from Moscow. "A lot of people are leaving," he said. "I do notice that a lot of wives and families of local executives are 'extending their summer vacations.' And Russians who have the means are leaving."

  The Indonesia Scenario

How did Jakarta's large expatriate business community deal with the riots last May?

For years, expat businessmen in Indonesia enjoyed nothing but growth and positive news. When the crisis hit last summer, it took a few months for people to really absorb the severity of it. After six months, when it was clear that the crisis was only deepening with no end in sight, many started to pack and leave, as talk of riots grew.

In the week leading up to the riots, the city was swarming with rumors. The day before the riots began, the streets were supposedly eerily empty, even though Jakarta is a city of 20 million.

When the riots first broke, panic swept the expat community. Western oil companies, stung by the memory of Iran, were among the first to evacuate foreign citizens on private chartered jets.

The Jakarta riots started on Tuesday, May 12th, but really picked up steam on Thursday, May 14th. Many wealthier Americans abandoned their posh Jakarta homes for the safety of barricaded 5-star hotels, from where they could see plumes of smoke filling the city and fires all around.

Individual foreigners were already attempting to flee en masse, but that only made things worse. Traffic jams meant that looters attacked cars and passengers as they sat helplessly.

"If you were a foreigner, they'd stop you and steal everything. If you resisted, the rioters beat you. If you were Chinese, you were beaten pretty badly no matter what. If you were a Chinese girl..."

At the Jakarta airport, the scene was so desperate that some foreigners were reportedly selling their cars for the price of an airline ticket out.

On Friday, May 15th, the American Embassy prepared to evacuate the estimated 3,000 U.S. citizens in Jakarta, and the 15,000 in Indonesia. However, the actual plan wasn't implemented until Saturday the 16th-4 days after riots began, and a time when the worst, according to some, was already over. American nationals were gathered at three meeting points-the Hilton Hotel, the U.S. Ambassador's residence, and an international school. There, convoys of embassy busses and private cars, with an armed escort, led the Americans to the airport, successfully avoiding looters.

But the embassy underestimated how many Americans would join up to evacuate-in part because so few had registered.

In spite of the chaos, one Westerner from Jakarta suggested that it was far easier to organize expat evacuations there than it would be in Moscow. "The Westerners in Jakarta really lived apart. They never mixed much. I mean they even look differently. In Moscow, I would think people are more spread out and the logistics of disseminating information would be much more difficult." Only half the Americans who showed at the airport were allowed to fly out that Saturday. The rest had to sleep overnight at the airport, and left the next day. American officials were so concerned about the safety of their nationals left behind that they sent three U.S. Navy vessels with 2,000 Marines to help evacuate, a move that was only called off at the last minute.

Other Western embassies didn't report the same problems evacuating their nationals as the Americans had, even though they acted only after the US evacuation call.

Although many foreigners returned to Jakarta within the next month, few brought their families back with them. Many who returned only did so to collect their belongings and leave.

"I would say that 90% of the Jakarta expats who were working there in July 1997 are gone today," said a Western lawyer who asked not to be named. He left Jakarta this summer, although he gave notice several months earlier. "I realized by January that it was over, nothing was going to happen. All the service companies-finance, law, accounting firms-as well as corporate representative offices-are gone."

Even though rents in Jakarta fell dramatically, the salaries needed to keep expat workers could no longer be justified in an economy that had died.

"I've heard stories of apartments that were $2,000 now renting for $600 and houses that were $3,700 now going for $400. Mind you, these residences are still not filled," said Danielle Surkatty, a member of the Organizing Committee for Living in Indonesia.

Gary Andrews, Business Manager for the Indonesian-British Business Association in Jakarta, sent his son home in May and doesn't plan to bring him back anytime soon. He too confirms the collapse of the real estate market, a sign of the near-complete exile of foreigners as well as the overnight disappearance of the middle class. "Broadly speaking, the bottom dropped out of the real estate market," said Andrews. "Before, you had to pay two to five thousand a month, two years up front. Now, as an example, I rent a three-bedroom condo that was $2,500 a month last year for $400." "The only foreigners left behind really are journalists," said the Western lawyer. "They love this shit."

For bargain-worshipping journalists [see "Confessions of a Carpetbagger"] the coming Russian upheaval should be a boon. But for the rest of us, the eXile included since our revenues depend on the bar and restaurant business, it's pizdets.

  What To Do?

The Western lawyer who worked in Jakarta would probably disagree with Price's W.E. Butler's (and indeed many other Russia veterans') assessment that things can't get any worse than in '91 or '93.

"What's going on in these parts of the world is the failure of expectations," he said. "In Indonesia, I don't think anyone would have rioted if they didn't have expectations. But what happened was you had a growing middle class in Jakarta, and you had villages that for once had electricity, and all those years no one cared about the corruption at the top so long as things kept getting better.

"Then all of a sudden, they lost everything, just like that. After a while, they couldn't take it anymore, they reached their snapping point."

In '91 and '93, Russian people, and particularly those from the big cities, hadn't yet seen any tangible benefits from the market reforms. By 1998, they were used to the new luxuries: a huge array of imported goods, easy money (at least in Moscow), automated bank tellers that gave cash at 2am... simple, even vulgar things that were already taken for granted. Now people in the provinces are threatened with starvation, and Muscovites have just lost literally every single gain earned over the past seven years that they won in spite of Yeltsin's oligarchy.

"I'd be a lot more scared in Russia than Indonesia," the lawyer said. "The population didn't have guns there. Russia is full of armed mafiosi. Who knows how they'd react in a riot."

Right now, most people in embassies and security firms advise foreign nationals to register with their embassies so that in case of an emergency, they can be contacted. Several foreign firms are reportedly already drawing up their own private evacuation plans, while individuals will be left to the mercy of their embassies.

"I'm aware of certain companies that are chartering airplanes," said Simington. "I know of at least one security firm chartering an aircraft and trying to sell seats at a premium. Frankly, I think it's foolish now."

He said that from his meetings with AmCham members, many are nervous and anxious but not over-reacting. "They have two concerns. One is accurate information, which they aren't getting from the embassy or anyone; and secondly, if there is a need to evacuate, what resources are available."

Simington cautions that things are likely to get worse before they get better, and that the criminal structures are gaining an alarming grip on what's left of Russia's economy. He also is concerned that if there is social unrest, Americans in particular could become targets. "To be honest, I'm a little afraid of the anti-American backlash. Others I've talked to agree. The average Russian thinks that it was American reforms that didn't work here."

His advice to expat businessmen is to make contingency plans, educate themselves, and take particular concern for their families' safety.

"I don't preach paranoia, but be prepared."