Last week the Toronto Star published an article on the emerging Russian middle class. While these type of articles have become quite common in Western media outlets over the last year, the interesting thing is that after eight years of economic expansion, prosperous Russians going shopping is still news in the West. Perhaps the reason is that some Western pundits still peddle Cold War stereotypes about the Russian economy and deny the existence of a middle class in Russia.
Click on the extended post to read the full article (hat tip: Copydude blog)
Russians relish their freedom to shop
Critics may warn of the erosion of political rights, but consumers just want to hit the malls
by Michael Mainville
Special to the Star, January 28, 2007
MOSCOW -- On a typical weekend, Moscow's already overloaded streets become hopelessly jammed with cars heading to suburban shopping malls.
At huge complexes like the 150,000-square-metre Mega Mall Tyoply Stan, which claims to be Europe's busiest shopping centre, customers jostle and push, stuffing their carts with everything from Swedish furniture to Calvin Klein underwear.
The stores -- IKEA, Zara, Marks & Spencer -- would be familiar to any Western shopper, although in Russia they tend to be twice the size of their counterparts in Europe or North America.
With the country's economy booming thanks to high oil and gas prices, incomes have soared and Russians are spending like never before.
It's a capitalist binge far removed from the days of Soviet bread lines.
Fifteen years after the collapse of the Soviet Union, there is increasing concern in Western capitals over the state of Russian democracy and worried talk of a renewed Cold War.
Critics point to the suspicious deaths of Kremlin critics, the steady erosion of political freedoms and an increasingly aggressive Kremlin on the world stage as signs that the Russian government is becoming more like its Soviet predecessor.
But amid all the Western hand-wringing, many observers here say it's important to remember how far Russia has come since the Soviet collapse and that for many ordinary Russians, life has rarely been this good.
Few Russians would claim the Kremlin offers a full-fledged or healthy democracy, but for many the freedom to shop seems more important for now.
"If democracy means having to live like we did in the '90s, people starving in the streets and girls prostituting themselves to feed their families, then no thanks," says Valeria Batunina, 32, clutching two bags of clothes she'd bought at Mega Mall.
"Now, people can afford to buy a new car, nice clothes, even travel somewhere warm in the winter."
After seven years of steady decline in the 1990s, Russia has seen eight straight years of economic growth, with expansion for 2006 estimated at 7 per cent, more than three times the rate in the European Union.
As the world's largest exporter of gas and second-largest oil exporter after Saudi Arabia, soaring energy prices have hugely benefited the Russian economy. Salaries have been growing at a rate of more than 10 per cent a year and consumption is estimated to have risen by 12.5 per cent last year.
"Russia has one of the fastest-growing income and consumption rates in the world," says Mikhail Terentiev, a consumer analyst at Moscow's Troika Dialog investment bank. "People who could never afford to buy quality goods now can."
Car sales have risen sixfold since 2001, with Russians spending the equivalent of $38 billion on cars last year. Only 3 million Russians owned mobile phones in 2000, but today more than 80 million do.
The number of households that own a personal computer has jumped to about 20 per cent from under 5 per cent in 2001. Consumer lending is also booming and many Russians are getting their first taste of credit cards. A flat income tax rate of 13 per cent and remnants of the Soviet system, such as subsidized housing and utilities, also mean that Russians have far more disposable income than a typical Western consumer.
On the other hand, salaries still lag far behind those in Western countries, with the average income in Moscow only about $800 a month. And millions of Russians continue to live in abject poverty, especially pensioners and rural residents. But experts say there can be no doubting the emergence of a growing middle class, particularly in Moscow and St. Petersburg.
Most Russians credit President Vladimir Putin with fostering the economic boom by ensuring stability after the political chaos of former president Boris Yeltsin's rule in the 1990s. Putin's approval rating often surpasses 80 per cent in public opinion polls. His image in the West, however, has steadily deteriorated since he began his second term in 2004.
Western critics accuse Putin of backtracking on democratic reforms by muzzling the press, rewriting election rules to favour his supporters and imposing heavy restrictions on non-governmental organizations.
His image has been tarnished by the high-profile assassination of critical journalist Anna Politkovskaya in October and the radioactive poisoning of former Russian security agent Alexander Litvinenko in London.
Critics have also accused Putin's Kremlin of using Russia's vast energy resources as a political weapon to pressure ex-Soviet countries, such as Georgia and Ukraine, that have sought closer ties with the West.
Yet few Russians see Putin as anti-democratic and most support his attempts to consolidate more power in the Kremlin.
In a poll released by the Pew Research Centre last year, 81 per cent of Russians said a strong economy is more important than a good democracy.
"What the Western critics and newspapers don't understand is that Russians feel they have more personal freedom now than they did under Yeltsin," says Sergei Markov, a political analyst with close ties to the Kremlin.
"Russians see freedoms as not just political, but also social and economic. Democracy is about more than just the rules of political competition, it's also about if people's children can get a good education or if they can travel to another country."
Markov says Western expectations that democracy would flourish in Russia immediately after the Soviet collapse were unrealistic and that the emergence of a middle class is a key step forward.
Shopping in Mega Mall's enormous grocery store with her granddaughter, 48-year-old Svetlana laughs off suggestions of a return of Soviet-style dictatorship in Russia.
"Nobody would say that who was there at the time," she says, looking out over rows of imported fresh fruits and vegetables.
"People are forgetting how bad it really was. You used to need connections just to get tangerines for the holidays.
"It can never go back to the way it was."
Michael Mainville is the Star's stringer in Russia.