New Lenin revives spirit of the old revolution: Andrew Higgins in Ulyanovsk asks if the birthplace of the people's hero will show Russia the way forward

THEY call it the future. It looks a lot like the past. But, if dirt cheap bread, clean streets and a burgeoning cult of personality are any measure, it works.

Best known as the birthplace of Lenin, Ulyanovsk is making a new name for itself as a bastion of ration coupons and vanguard of reaction.

Free-market theorists howl with horror; locals seem to love it; and officials across Russia wonder - some with alarm, many with delight - whether this sleepy stretch of the Volga River might not show the way forward.

When world chess champion Garry Kasparov visited in December to campaign for Russia's Choice, the main reformist party, he joked that Ulyanovsk might become a kinky political theme park along with Cuba and North Korea.

Voters were not amused. Russia's Choice got trounced. Yuri Goryachev, the old Communist Party boss reincarnated as provincial governor, got more than 90 per cent of the vote to win a seat in the upper house of parliament.

The results have not gone unnoticed in Moscow, where a government shorn of reformers is stacked with 'red directors' eager to restore order to Russia's free-market free- for-all. Also attracting attention is Ulyanovsk's claim that local industy, primed by soft credit and sympathetic officials, cut output by only 1.6 per cent last year compared with 16 per cent nation-wide.

'We bask in the glory of being the cheapest city in Russia,' coos Valery Sokolov, an aide to the governor in the Ulyanovsk Province Administration Building, overlooking Lenin Square, watched by a Lenin Statue and overshadowed by the Lenin Memorial Museum. 'We are spending money properly, not on changing street signs. We keep Lenin, not because we idolise him but for pragmatic reasons. We do it for the tourists.'

In February there are few signs of tourists. All the same, quaint habits of another era linger: the Lenin Museum is floodlit at night; the pavements are swept clean of snow and nearly everyone insists they are happy. Mr Sokolov rattles off cheerful statistics with obfuscating flair, hailing the region's cows as the second most productive in Russia. The only hint of less traditional habits is a computer. Its screen flashes a cartoon of Mikhail Gorbachev and the name of a game, 'Perestroika'.

At the heart of the Ulyanovsk experiment lies what Mr Sokolov calls a 'little trick' - the 'stabilisation fund', a seemingly bottomless pot of money that helps pay for cradle- to-grave welfare and massive subisidies on eggs, butter, meat, oil, sugar and other basic footstuffs. Where the money all comes from is a secret. Some comes from a 1 per cent turnover tax, some from heavy fines on traders who sell local produce outside Ulyanovsk Province. According to a Moscow economist, Andrei Illarionov, most comes from the 'profit' bureaucrats make playing the margins between 'state' and 'commercial' prices in a still largely 'planned' local economy. A web of restrictions limits what producers charge, how much shopkeepers mark up and where traders are allowed to sell local goods.

Most Ulyanovsk officials pre-date and dislike perestroika. Local radio and television still catalogue the triumphs of the governor, Mr Goryachev. Underlings sing his praises. 'We all believe in him. The whole administration believes in him,' says Nina Logunova, a deputy chief economist. 'He is for the people, with the people. He never thinks about himself. We are all his allies. He is hard but fair.'

Anna Klimova, custodian of Lenin's school desk and exhibits at his old Gymnasium, gushes about the governor as if he were a new Lenin. 'We love him because he loves us. He has no other life but the people.'

Local 'demokrati' are appalled, demoralised and powerless. President Boris Yeltsin's representative, Georgy Stupnikov, rarely even sees Governor Goryachev. He has a room in the administration building but no authority. 'Most people still look through the window at Lenin. It is hard to change,' he says. The main focus of opposition is a shoe-string local paper, Simbirsky Kurier. The editor, Alla Bogdazarova, is so depressed she can see only one way out: 'We need to change the people.'

But none of these democrats shows much interest in the nitty gritty of why bread costs only 100 roubles (4p) a loaf instead of 300 in Moscow. When the rest of Russia lifted or relaxed price controls in January 1992, Ulyanovsk dug in its heels. The result is shops like Aquarium, a state emporium. Shelves groan with goods. Beef costs 800 roubles a kilo, a quarter of the 'state' price and a tenth of what it would cost in Moscow.

'We want to enter the market but are trying to enter it softly,' says Vladimir Chaya, Ulyanovsk's chief economic policy-maker. 'The main thing is the results, how people feel.' According to the Centre for Economic Reform, a think-tank funded by Russia's industrialist lobby, they feel far better off than residents of Nizhny Novgorod, a city in the vanguard of free-market change which John Major is to visit this week after talks in Moscow.

Ulyanovsk's recipe, though, will not be easily copied. The region is blessed by a good climate, obedient officials and a relatively balanced and self-sufficient local economy. It also has UAZ, a monopoly manufacturer of jeeps for the Russian military. While most of Russia's motor industry is crumbling, UAZ piles up enough profits to pay hefty taxes and to finance 17 kindergartens, 273 blocks of flats, a sports hall and holiday camps. Anatoli Viktorov, the plant's chief economic planner, explains how: 'Russia can build everything except good roads . . . How can we go wrong making jeeps for bad roads?'

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