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First Lady Gets Earful of Businesswomen's Woes

Entrepreneurs: At a clothing factory, Mrs. Clinton hears how doldrums are affecting free-market pioneers.


MOSCOW — First Lady Hillary Rodham Clinton had a street-level view of Russia's economic crisis Tuesday, as she visited a privately owned clothing factory that has been hard hit and talked to a rare breed--Russian women entrepreneurs--about the struggles they confront.

Since it was the first time Mrs. Clinton had faced reporters since her husband's televised admission of marital infidelity, she also answered a delicately worded question about how she is coping with the personal impact of President Clinton's political crisis.

"I've been getting along fine," she said with what appeared to be a forced smile.

That was more of a mask than the first lady's Russian hosts put on their own, very different crisis, which began Aug. 17--the same day the president made his admission after seven months of denial.

Sitting next to Mrs. Clinton, Russian First Lady Naina I. Yeltsin opened the meeting with businesswomen by referring to her country's economic collapse.

"In this difficult time, much lies on women's shoulders," she said.

The director of the small clothing factory where the meeting took place, Tatiana Nedzvetskaya, was even more direct.

"Before the crisis, we had such high hopes," she said. But since it hit, she added, there is only uncertainty.

Nedzvetskaya's business grew from a mom-and-pop shop in 1988 to a factory with 60 full-time workers. Demand for her reasonably priced clothes has been so high in recent months that she contracted with three other factories to keep up with orders from across the country.

But all that changed Aug. 17, when Russia's currency, the ruble, was devalued and payments on some government debts were frozen. Since then, political upheaval has caused the value of the ruble to plummet further. The price of the imported fabric that Nedzvetskaya uses for her suits and dresses soared overnight. Her targeted market--Russian women with modest incomes--cannot afford to pay more than her current prices, so she faces a formidable dilemma: If she raises prices, she will lose her customers; if she doesn't, she will be unable to make ends meet.

"We had planned to introduce two new lines this fall because everything was going so well this summer," Nedzvetskaya said in an interview. Now, for the first time in a decade as a pioneering private businesswoman, she faces serious doubts that she will be able to keep the doors of her enterprise open.

"The situation is much more critical than it has ever been before," Nedzvetskaya said. "It was not so difficult in the beginning. We had nothing to lose. Now, 60 women will be on the street if we fail. What is so sad and frustrating is that none of this depends on you. It's all up to the idiotic decisions of the government."

Mrs. Clinton's visit with the businesswomen offered her a microcosm of the problems facing many thousands of private enterprises that have struggled into existence as Russia has been engaged in a transition from the Soviet-era command economy to a free-market system.

Given their deep economic fears, it was incomprehensible to Nedzvetskaya and her employees that the U.S. political system is in crisis over the relationship between Clinton and former White House intern Monica S. Lewinsky.

"I feel such sympathy for Mrs. Clinton," said Lyuda Kalinina, 40, who was sewing a woman's suit jacket as the American first lady started her tour of the tidy, cheery enterprise. "It's such a delicate situation. If one of us was going through it, maybe our best girlfriend would know about it. But in Mrs. Clinton's case, the whole world knows. I feel so sorry for her."

Nedzvetskaya scoffed at all the attention given to the Clintons' personal problems and said it shows that Americans must "have nothing else to worry about."

She offered a suggestion for what Clinton should do if he faces impeachment or a congressional demand that he resign.

"If they kick him out, have him come to Russia," Nedzvetskaya said. "We would gladly welcome him as our president. We could sure use a good one."

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