Ordinary Russians are beginning to resent the greed of the country's elite, writes Conor Sweeneyin Moscow.
There's a joke in Moscow about two new Russians trying to outdo each other's vulgar spending habits: "What do you think of this tie? It cost me €500," says one "biznizman", as they're called here. "That's nothing," boasts his friend. "I bought the same one last week, it cost me €800."
The ironic exchange sums up the behaviour of a certain clique in Moscow, who literally have more money than they know what to do with. While some Muscovites can barely afford a metro ticket, others splash thousands on the most expensive wine they can find on a menu, often over €1,000 per bottle.
There are also nightclubs where reserving a table, perhaps with a few bottles of champagne or other distractions thrown in, will cost €5,000. But with 16 million people in the city and 142 million in the country, this wave of cash still originates from a tiny minority, with decrepit Volgas frequently crashing into Porsche Cayenne SUVs on the city's clogged streets.
So, while some Russians struggle to make ends meet on a salary of as little as €10 a day in one of the world's most expensive cities, others complain about the waiting lists for cars - and they don't do Soviet-style queues. Russia is now the number one market in the world for luxury models such as Mercedes and Maybachs. And, while a new middle-class in between the two extremes expands in the capital and St Petersburg, there's little of it trickling down elsewhere.
In the latest sign of ostentatious wealth, the country's third-richest man, Mikhail Prokhorov, will tie the knot during an €8 million extravaganza in the Maldives in May. Prokhorov (41) emerged from the chaos of the 1990s as one of the winners in the first phase of privatisations, which has left a handful of people rich beyond their dreams. He's planning to fly hundreds of friends and business contacts to the islands of Kurumbu and Paradise for his wedding, where he will then get divorced a few days later, in order to win a wager that he would wed before his 42nd birthday.
The owner of a Russian basketball team, Prokhorov is currently splitting up his assets, which include gold mines and a wide variety of other interests in real estate and financial services, with his business partner, Vladimir Potanin, the largest nickel producer in the world. Although there was some speculation that Potanin may face the same kind of scrutiny which landed Yukos oil company executive Mikhail Khordovsky in jail (Russian president Vladimir Putin had the tycoon imprisoned to thwart his political ambitions) he has already publicly apologised for the excesses of the 1990s. He also took a dim view of Prokhorov's brief detention on the French ski resort of Courcheval earlier this year after French prosecutors suggested he played a role in pimping for prostitutes. At this stage Potanin has established himself as one of Russia's most high-profile philanthropists.
Status symbols such as expensive London homes or Alpine winter breaks are becoming not just popular, but are portrayed sometimes as tedious obligations of membership of the society's upper echelons, where yachts and football clubs are obligatory playthings for billionaires such as Roman Abramovich, who was completely unknown less than 10 years ago. According to one private banker, who deals with the new rich all the time, they are completely insecure about how to spend their money.
"I have them on the phone complaining to me about how they'll feel left out if they don't make it to Courcheval this year. I have to say nothing, of course, but five years ago these same people would never have dreamed of going skiing and now they want everyone to think they've been on the slopes their whole lives," said Irina, who didn't want to have her family name or the name of her employer published.
Russia has basically become a colder version of Saudi Arabia, with oil, gas and commodity exports underpinning the current boom. The main source of the boom comes from the most isolated areas of Siberia, where the gas, oil and gold originate. But the prosperity it creates goes elsewhere, with 94 per cent of the national wealth based in Moscow, helping to support property prices that would make a Dublin developer blush.
The inequality gap in Russia is best compared with South America, argues Yaroslav Lissovolik, thea Russian economist with Deutsche UFG, Yaroslav Lissovolik. "During his press conference organised in the beginning of the year,
[Russian
president] Putin stated that one of his greatest failures is the perseverance of inequality in Russia," explained Lissovolik. "If one looks at the statistics, the level of inequality is roughly in line with what was observed in 2000-2001, at the beginning of Putin's presidential term."
As the relative wealth of many Russians has grown, so too has resentment at the super-rich, points out Christopher Granville of Trusted Sources, an investment intelligence service.
"Now that income inequality has become more real and tangible to people, paradoxically enough, as it filters down to society, people can then see it's not just some abstract oligarch on television, but their own neighbour, who has a lot more than they do," he says. "As expectations rise, people can see what kind of lifestyle is available to those better off than they are. It will create political opportunities for parties and politicians who favour redistribution."
The writer, Alexander Solzhenitsyn, warned this month that the yawning gap between those enjoying the fruits of this wealth and those watching them enjoy it has never been so wide since just before the turbulent Russian Revolution in 1917 - an ominous prophecy of how history could yet repeat itself, whether as tragedy or farce.