28 November 2003 14:38
A Consumer Paradise for Elite
Olga Sobolevskaya, RIA Novosti commentator
 “I wouldn’t go to an expensive store like Okhotny Ryad [an underground shopping center near the Kremlin] even for a sale,” says a 34-old physician Alexey Pavlov, who earns $200 a month (an average salary for a Russian citizen) working in two hospitals. “Everything on display, from clothing to kitchenware, is a luxury item for me. It is just a ‘show,’ like an exhibition at a museum.”
There is a country-wide perception that Moscow is the second most expensive city in the world, after Hong Kong. Russia’s capital has made a huge leap head of the rest of the country and has become a “state within a state.” Moscow accumulates three-fourths of Russian capital and four-fifths of the richest Russian citizens, whose incomes are 50 or more times higher than those of the poorest Russians.
Casinos and posh restaurants, elite fitness clubs and jewelry stores, famous European fashion boutiques and foreign car dealerships are multiplying quickly to satisfy the tastes and desires of wealthy Muscovites. Rich Muscovites queue for Bentleys. A square meter in one of the many elite housing complexes mushrooming in Moscow costs up to $10,000. The enormous success of the Cafe Pushkin elite restaurant inspired its owners to destroy three of the five 18th -19th century residences, which were part of the Rimsky-Korsakov estate, to increase the restaurant’s floor-space.
“Moscow is becoming a consumer heaven only for businessmen and the elite,” complained Alexey Pavlov. “Moscow is adapting to their needs and ceases to be a city of intelligentsia. As for me, I buy my clothes at discount stores like the Family, where I can find things for affordable prices in the range of $15-$20. I normally buy food at the market and in Ramstor supermarket. Thank God, I have all necessary furniture and I don’t have to spend a fortune. I also spend about $10 a month on books. I would love to go to movie theaters more often, but I cannot afford paying $10 for a movie it’s way too expensive! I don’t go to theaters more than three times a year because the tickets for theatrical performances are not cheap, either. I certainly try to avoid restaurants: what am I supposed to do there with my salary? I have only $3,000 in my Sberbank account.”
Alexey Pavlov’s financial situation is not the worst in Russia. His salary is higher than the monthly subsistence wage, which, in the third quarter of this year, the Cabinet established at 2,121 rubles per person ($1 is approximately 30 rubles). Federation Council Speaker Sergey Mironov said, “a third of able-bodied Russian citizens [about 20 million] have a salary that is lower than the subsistence wage, two-thirds [about 40 million] receive salaries that cannot cover the cost of living for their families even with one child.” In provinces, wages are often less than $100. In villages, where 38.8 million Russian citizens reside (27 percent of the Russian population), incomes are even lower.
Forty-two percent of Russian citizens believe that young people will live better than their parents did. “Rumors about wide-spread poverty among Russian people are exaggerated,” said Olga Kryshtanovskaya, head of the elite study department at the Institute of Sociology of the Russian Academy of Sciences. “The overwhelming majority of Russians live in big cities, not small villages. We have already surpassed Europe in terms of consumer demand. How can somebody claim that we are all poor when residents of Russian cities accumulate enormous amounts of money in their Saving Bank’s accounts? Do you really think that all of the Land Cruisers on the streets of Moscow belong to oligarchs? Bank tellers, sales managers and office assistants all are well-paid specialists who are not business people.
Russia has enough sufficiently wealthy and intelligent people, and we’ll have more of them in the future.”
 Foreign companies that actively promote their businesses in Russia have the same hopes, setting their sights not only on Moscow, but also on regions that are not saturated with consumer goods. However, the middle class in Russia is too small (about 20 percent of the population). The middle class determines the bulk of the demand for consumer goods and, therefore, is the most desirable for both, foreign and domestic manufacturers. If the Moscow middle class, the wealthiest in the country, still is hesitant to pay for overpriced goods in stores, middle-class Russians in the provinces are definitely not willing to do so. Is the yearly 10-15 percent rise in retail trade real?
Western analysts, including PricewaterhouseCoopers auditing company, answer “yes.” Their optimism is based on the growth rate of the Russian economy, which has been steady for the last 5 years, and on the growth rate of the population’s active income, which has gone up 40 percent in the past 4 years. The most promising indicator for foreigners is high consumer demand in Moscow, the most dynamic market in Russia.
“Consumer abilities of poor people continue to shrink, and this process encompasses all aspects of life and is getting critical,” said Director of the Russian Academy of Sciences’ Institute of Complex Social Studies Mikhail Gorshkov. The gap between social strata, between wealthy and poor, continues to grow.
Nevertheless, the majority of poor Russians, according to the results of social polls, adhere to the centuries old saying: “money isn’t everything.” They do not resent their wealthy compatriots, leaving no grounds for expectations for any escalation of social tensions in Russia.
[RIA news agency] |
RUSSIA IN FACTS
