The exodus of the Moscow millionaires

[luvdovz.livejournal.com]

As we all know, luxury and posh kitsch is the trademark of wealthy Russians. The show-off lifestyle is one of the most typical characteristics of the new Russian parvenus, they're addicted to it, and that instantly becomes obvious whenever you spot Russian tourists abroad. The first impression is: "Those guys have so much money they don't know what to do with it". Most recent surveys among the tour-operators have found that the Russian tourists are among the biggest spenders abroad. Some of the most prominent resorts in the world are now full of Russians, you'd hear Russian speech everywhere around Monte Carlo, Sharm el-Sheikh, Phuket, Cancun, Bali, Antalya, and Costa del Sol. This tendency continues in and around Moscow itself, which has understandably become the most expensive city in the world. The new millionaires keep popping up like mushrooms after rain.

But a new tendency has been sweeping across those elite Russian circles in the recent years. Ah, those poor, poor Moscow millionaires... Apparently they aren't enjoying their fabulously posh palaces any more. Not one or two of the residents of the affluent Rublyovka neighborhood (west of Moscow) have found out that most of their wealthiest neighbors have permanently disappeared somewhere...

A Russian businessman who was on one of the tours I was guiding, recently complained that his neighbor "has a house in London", and he was "constantly shuttling between London and his summer-house in Southern France, and not paying any attention to Moscow". The wife of another businessman, whose daughter was going to the elite high-school in Rublyovka, also made the observation that the owners of the most expensive properties there are gradually disappearing abroad. She said that until recently it had been almost impossible to find a vacant place in that school, and now they even "have to merge classes" to fill the quotas.

The luxurious shops and boutiques around the so-called "Luxurious Village" are now like orphans. An agency that provides housekeepers and chambermaids to the Russian elite complained that their business has shrunk drastically, because many of the wealthy families now only return to their "Dachas" (vacation homes) for the summer holidays. That's the only time they come back, and the rest of the time they live abroad - in France, Italy, Spain, England. London has practically become the biggest Muscovite colony. The Russian property brokers are also almost broke because of that exodus. They're explaining this migration with the processes that started after the removal of the legendary (and oligarch-friendly) Moscow mayor Yuri Luzhkov last year. Under his reign many millionaires used to feel protected and welcome. Now they're having hard times. Poor souls! ;)

But that's hardly the main reason. People already know very well that the discontent with Putin's system should only get wider and deeper, the more well-off people are. While in the province (according to polls) 1/3 of the population are already discontent with the government, that percent in Moscow approaches 50%, and among the middle-class it's even higher.

And while the wealthy residents of places like Rublyovka are voting against Putin by leaving the country, they're doing what many other Russians could not afford. The tendency that the elites never really got attached to the "elite ghettos" of Russia, is proven by the fact that the local oligarchs never bothered to fix the streets around their private mansions, and left them in disrepair. Obviously they had never meant to stay there for too long. And that ought to be worrying tovarisch Putin.

Granted, he cleansed the system from the Yeltsin puppet oligarchs, only to substitute them with his own pals. Some of the old ones (like Khodorkovsky) ended up in jail; others (like Abramovich) were smart enough to flee in time, and invest abroad (he bought FC Chelsea and moved his empire to London).

So, one day Rublyovka and the like could again become what it has always been before the Moscow boom: a string of vacation villages, where the middle-class and the more well-to-do spend a couple of weeks annually, and maybe a few weekends, and nothing beyond that. Meanwhile, most of the consumer activity originating from those circles, will symptomatically continue to be shifted towards foreign destinations. Which means an increasing flow of capitals out of Russia.

Comments

[agk-ru.livejournal.com]

Excellent post.

[htpcl.livejournal.com]

It's entirely thanks to the Russian middle-class that our tourism and property industry has been saved after the complete withdrawal of the Brits, Irish and Scandinavians. The Russians have come back to our seaside and our skiing resorts and thanks to that we're having a full rennaissance of tourism. I work in tourism&property and my job has been stable and I'm getting good money (for our standards) thanks to being fluent in Russian. In a sense my professional value has risen thanks to the Bratushki (big bros).

It's true that they're very picky and kinda unsophisticated, and always ready to bargain till kingdom come, and cause all sorts of troubles, but we have similar mentality, similar culture, similar language, and we know their ways pretty well from the commie times, and they've always loved our nature and weather, and the food, so it's a symbiosis.

Btw that 2nd pic... does it say "Thanks [God] for our son"? They bought a new car because they had a baby? Cute. :-)

Cute story: a Russian guy came to our office, wanting to buy a new apartment in Sunny Beach, which he would later gift to his young wife; he explained "I was thinking of buying a Cayenne SUV, but then I got married and I'm thinking of postponing the car purchase with one year; I'm buying a wedding present to my girl instead". The jaws of my female colleagues dropped to the floor. ;-)

It's funny though, that the general tendency is that the Russian man would sit silent, open the purse and pay the cash, while the wife would lead the negotiations more often than not. Special family hierarchy they've got, lol!

[luvdovz.livejournal.com]

Many Russians would buy any kind of property at your place, just to acquire a EU visa and be able to travel anywhere in Europe, correct?

[htpcl.livejournal.com]

True. And the most frequent question we're asked by Russians is: "So when are you getting into the Schengen area?"

[sophia-sadek.livejournal.com]

It is a traditional role for a man to serve as a mule for a woman's gold.

[underlankers.livejournal.com]

Russia has problems of social class, news at 11.

[luvdovz.livejournal.com]

People have problems of social class. Oh my.

[underlankers.livejournal.com]

In most cases in Russia these problems produce chaos and violence a bit moreso than elsewhere. Nichevo, Tovarisch.

[luvdovz.livejournal.com]

A bit like in the Middle East, or moreso?

[underlankers.livejournal.com]

In terms of the results, somewhat. In terms of origins, not at all. In the Middle East there are a group of totalitarian dictators and the like who rule societies which have massive disparities of wealth from oil and no incentive to even consider more democratic options in a meaningful sense. In Russia the weakness at the in-between level between empire and locality is the issue, and without that in-between level there's been no real ability for anyone in a position to moderate class strife in Russia to do so. Russia's government in this sense rules at two levels but only reigns in the third.

[luvdovz.livejournal.com]

there are a group of totalitarian dictators and the like who rule societies which have massive disparities of wealth from oil and no incentive to even consider more democratic options in a meaningful sense

Sounds familiar.

The rest I agree with.

[underlankers.livejournal.com]

Yes, in this case this particular weakness goes all the way back to the 15th Century and various generations of Russian rulers have kept trying and kept failing to resolve it. It's not an easy task for anyone, and there's a certain irony in that the Soviet Union was the one set of Russian leaders that did the best job of anyone, to the point that it did them in but even they only made dents in a long-term pattern.

[luvdovz.livejournal.com]

OK.

[htpcl.livejournal.com]

I take it you have a theory about the reasons for that?

[underlankers.livejournal.com]

Yes, in Russia the government is good on the local level and at the imperial level, but has never really had an in-between. Without that in-between level there's no means to moderate class issues, and without that ability to moderate them, those issues become profoundly destabilizing.

[htpcl.livejournal.com]

That's a much more meaningful comment than the previous one.

[underlankers.livejournal.com]

My comment about Russia reflected that this is a case of how little Putin's regime has actually changed things, and in Putin's case too much change would endanger his monopoly on power and he won't want that.

[malasadas.livejournal.com]

He's charming in an "I killed fifty people with poisoned tea before I got high enough in Russian mafia to strangle the boss with his own platinum plated tooth floss" kind of way.

[ddstory.livejournal.com]

From what I've heard, they're just bored in Russia. It's like in the times of old when one couldn't buy anything in the shops simply because the shops were empty. Now they have money but all the fancy stuff they want either cannot be found in their shops, or it's ridiculously overpriced. That, and the long time of being deprived of the ability to travel abroad. So now they're feeling like unleashed...

[redheadrat.livejournal.com]

boredom creates tourists, this topic is about emmigration

[ddstory.livejournal.com]

This topic is about consumerism as well.

[redheadrat.livejournal.com]

consumerism in this case lies from inability to invest

[ddstory.livejournal.com]

So you do agree that it's about consumerism too?

[redheadrat.livejournal.com]

only as one of the side effects

[ddstory.livejournal.com]

Good. We're having some progress.

[mahnmut.livejournal.com]

People already know very well that the discontent with Putin's system should only get wider and deeper, the more well-off people are.

That's kind of ironic since it was under Putin that this middle class emerged. The irony is that the wealthier and more educated they get, the more informed they become about the outer world, and they start making conclusions and asking questions. This is what built up all that disillusionment with the regime in the last years of communism. People began seeing what the life of their Western counterparts was, and they decided they were lagging too far behind.

[htpcl.livejournal.com]

That's what happened here, too. In the 80s. Some info started leaking in from the West and people grew restless.

[sophia-sadek.livejournal.com]

The CIA had a project to destabilize Communist regimes by broadcasting disinformation behind the iron curtain. It backfired in Hungary '56 when revolt was quickly followed by the iron fist of Moscow.

[htpcl.livejournal.com]

I remember my grandpa was listening to Radio Free Europe and The Voice of America. Secretly, on short waves.

[sophia-sadek.livejournal.com]

We listened to Radio Deutsche Welle and the BBC on shortwave. They brought breadth to the narrowness of NBC and CBS.

[htpcl.livejournal.com]

Yes, DW too.

[underlankers.livejournal.com]

There was no need to destabilize them by that, any Communist leader who went too far in the direction of national autonomy got Soviet tanks blasting his cities to rubble. The Soviets never allowed any De Gaulles to withdraw from the Warsaw Pact, Tito doesn't count as he liberated Yugoslavia himself.

[nairiporter.livejournal.com]

Those poor, poor millionaires. :-)

[sophia-sadek.livejournal.com]

There is nothing as impoverishing as huge quantities of material wealth.

[chessdev.livejournal.com]

Interesting post. I Dont know enough about the subject to add anything, but
it's educational so I think it's a good post.

[redheadrat.livejournal.com]

What does Rublevka suburb of Moscow have to do with middle class?

[luvdovz.livejournal.com]

Did you just selectively pick parts of the post and mix them up? Read it again and notice where I'm talking about the wealthy and where - about the middle-class. Reading comprehension is a biach.

[redheadrat.livejournal.com]

Combining two separate topics under one premise is not good writing.

[luvdovz.livejournal.com]

You being unable to distinguish between nuances is not my problem.

[peamasii.livejournal.com]

I love Abramovich's Eclipse yacht, you could feed a small continent on what it must cost to keep that piece of garbage running.

[abomvubuso.livejournal.com]

While the number of the Russian billionaires is increasing, the times when the oligarchs were calling the shots in Russian politics are gone. The Khodorkovsky lesson has been engraved at the inside of their skulls.

The new generation of oligarchs are former cops from the secret services, hand-picked by Putin and being given their power by Putin. Unlike Yeltsin, he's calling the shots now.

[sophia-sadek.livejournal.com]

Gee, we haven't seen such an exodus since the days of Napoleon and Lenin!

[asket-klim.livejournal.com]

Yes. Russia is a rich country. We have a lot of oil. Our people live very well and can waste much money!

[luvdovz.livejournal.com]

How do you like that yacht of yours?

[asket-klim.livejournal.com]

Yes, i like that yacht because they owners work hard a lot of time to buy it. Its great!

[luvdovz.livejournal.com]

What do they work?

[asket-klim.livejournal.com]

I dont know, but if they gain much money in Russia, they must be a work hard. I think so

[luvdovz.livejournal.com]

There are many ways to make a lot of money, one is to work hard, another is to be a thug, and the other is to be hand-picked by the politicians to launder their money.