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Market Closure Still Reverberates In Moscow

  • Kevin O'Flynn

Businessmen from the closed Cherkizovsky market gathered to discuss the situation and appeal to Russia's political leadership on July 16.

Businessmen from the closed Cherkizovsky market gathered to discuss the situation and appeal to Russia's political leadership on July 16.

MOSCOW -- It's doubtful that Hollywood stars Richard Gere and Sharon Stone knew much about the backdrop for a lavish hotel launch they attended on Turkey's Mediterranean coast as this summer approached.

But there was a direct connection between that late-May event and the closure of a massive outdoor market some 2,000 kilometers away, outside Moscow: Azerbaijani-born owner Telman Ismailov.

In fact, less than two weeks after the festive opening of Turkey's seaside Mardan Palace -- which boasted hundreds of kilograms of Beluga caviar in addition to the presence of the glitterati -- Russian Prime Minister Vladimir Putin berated his cabinet over a lack of arrests in connection with contraband confiscated from Russia's 600-hectare Cherkizovsky outdoor market.

"A result would be to send people to jail," Putin scolded his ministers at the specially convened cabinet meeting.

Less than a month later, on June 29, what had been one of Europe's largest markets was closed for "sanitary and safety violations." Billions of dollars' in contraband goods have been confiscated. Tens of thousands of former market workers are now jobless.

Ismailov -- until recently one of the best-connected businessmen in the Russian capital -- is reportedly in exile abroad.

The repercussions continue.

Armed police wearing balaclava masks raided the Praga restaurant in the center of Moscow this week as the investigation into Ismailov, whose company also controls the restaurant, broadens.

Thrown Into Chaos

The closure of the Cherkizovsky market -- which authorities say is part of a fight against contraband -- provides insight into what critics regard as government heavy-handedness and a perceived battle for control of valuable Moscow real estate.

It was not the last such shuttering, either. Since the closure of Cherkizovsky, authorities have moved against other markets such as the Izmailovsky market. Traders at the Sevastopolsky hotel -- primarily Afghan, Indian, and Pakistani businessmen -- are the latest to have seen their wares seized in an investigation into smuggled goods.

"Law enforcement representatives arrived early and closed the market," says the head of a migrants' federation, Mazhumder Mukhammad Amin, who has been fielding complaints from traders. "They won't allow anyone into the market complex."

In their latest raid, Russian police confiscated $29 million worth of goods that they say were fake or dangerous.

Police broke up a planned action by a migrant activist group to feed former Cherkizovsky vendors in early July.
Nationally, the government claims it loses 650 billion rubles a year due to goods illegally brought into the country.

Amin counters that the market was well-regulated and legal.

Outside what was once Cherkizovsky, former vendors are still trying to retrieve their confiscated goods from the vast complex.

Traders were given no notice of the closure and the overnight decision threw tens of thousands of people out of work.

Amin has been trying to help those who have lost their jobs or their goods, but there has been little progress.

"It is still closed, the goods are bring given out very slowly, and if they are given out, only with bribes," he says.

Critics of the decision say that closing the market instead of regulating it has simply brought on more problems.

'A State Within A State'

The market attracted huge crowds of bargain hunters looking for cheap clothing. Some 5,000 buses with traders and goods arrived at Cherkizovsky every day from all over the country.

"You have to understand that it is not just a market," says economist Mikhail Delyagin, "It provided goods for all of Central Russia at least and maybe more, and its closure has disorganized trade, as far as can we can tell, seriously."

Russian investigative committee head Aleksandr Bastrykin describes Cherkizovsky market as a "state within a state."

It is said to have lived by its own laws, and had its own security force (so Russian police rarely entered) and its own people -- a mixed workforce of Chinese, Vietnamese, Central Asian immigrants, many illegal, and Russians.

Bastrykin says a few days before the market was shut down that it was a disgrace and had its own brothels and underground casino.

Despite threats by the Moscow city government to close the sprawling complex for years, it never did. Instead, the closure only came after a signal from Prime Minister Putin.

Observers say the market could not have existed without highly placed protectors.

"Cherkizovsky was millions of dollars of cash in hand every day. It was a feedbag for the [Russian Interior Ministry], the [Federal Security Service], and many others," a policeman wrote on a law enforcement forum after the closure.

Moscow Mayor Yuri Luzhkov, who has known Ismailov since the late 1980s, was seen toasting Ismailov effusively at a 50th birthday party in 2006.

Ismailov was known for extravagance well before his Mardan Palace gala.

American singer Jennifer Lopez was once flown in to sing him "Happy Birthday," and he gave her a gold microphone and an expensive watch.

Moving On?

Many see the closure as part of a titanic power struggle. Political analyst Vladimir Pribylovsky sees it as a fight between Ismailov and his partner, Zakhar Iliev, over the valuable land that lay under Cherkizovsky.

Although the shutdown was a popular move among Muscovites who regarded the market as a source of crime, there have been repercussions.

The closure has left up to 100,000 people out of work, including tens of thousands of Chinese. The Chinese government sent a delegation last month, headed by Chinese Vice Minister of Commerce Gao Hucheng, to lobby for its traders, lost jobs, and lost revenues.

The city has allowed some traders to move to other markets, where traders are complaining that they are being crowded out and the rent and bribe costs are soaring.

A new movement, called Anti-Cherkizon, has been formed to prevent those vendors from moving to other markets.

"Cherkizovsky market was a hotbed of contraband, a hotbed of fake goods, a hotbed of crime, of drug dealing," says Aleksei Ivanov, an activist for the movement. He says severely that since its closure, the "filth that lived in Cherkizon began to spread throughout the country, began to spread to points of legal trade in Moscow."

RFE/RL's Russian Service contributed to this report