esponsive to Russia's needs. According to Russian
official data, GDP declined by 12% in 1993 compared with 19% in 1992.
Industrial output in 1993 fell 16% with all major sectors taking a
hit. Agricultural production, meanwhile, was down 6%. The grain
harvest totalled 99 million tons - some 8 million tons less than in
1992. Unemployment climbed in 1993 but remained low by Western
standards. The official number of unemployed rose from 578,000 at the
beginning of 1993 to about 1 million - or roughly 1.4% of the work
force - by yearend. According to the Russian labor minister, the
actual number of unemployed probably was closer to 4 million.
Government fears of large-scale unemployment continued to hamper
industrial restructuring efforts. According to official statistics,
average real wages remained flat. Nonetheless, a substantial portion
of the population, particularly the elderly and people in remote
areas, finds its well-being steadily shrinking. The disparity in
incomes between the rich and poor continued to rise in 1993, primarily
reflecting the high earnings of enterprise managers and persons
employed in the emerging private sector. The government tried to
narrow the income gap by raising the wages of budget-funded workers -
mainly teachers and health care specialists. Official data may
overstate hardships, because many Russians supplement their income by
moonlighting or by bartering goods and services, activities that often
go unreported. Russia made good progress on privatization in 1993
despite active opposition from key cabinet members, hard-line
legislators, and antireform regional leaders. By yearend, for example,
roughly 35% of Russia's medium and large state enterprises had been
auctioned, while the number of private farms in Russia increased by
86,000, reaching a total of 170,000. As a result, about 6% of
agricultural land now has been privatized. Financial stabilization
continued to remain a challenge for the government. Moscow tightened
financial policies in early 1993 - including postponing planned budget
spending - and succeeded in reducing monthly inflation from 27% in
January to 20% in May and June. In the summer, however, the government
relaxed austerity measures in the face of mounting pressure from
industry and agriculture, sparking a new round of inflation; the
monthly inflation rate jumped to 25% in August. In response, Moscow