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Moscow Boasts World's Most Billionaires

  • Gregory Feifer

Two years ago, the global financial crisis sent Russia's economy spiraling downward, slashing the number of Russian billionaires by two thirds. But now they're back.

According to "Forbes" magazine, which on March 9 issued its annual list of the world's richest people, Moscow is now home the highest number of billionaires in the world, something "Forbes" chief executive Steve Forbes said reflects the world's changing economy.

"In terms of the BRICs [Brazil, Russia, India, and China], you saw Russia go from 62 billionaires to 101, Brazil from 18 to 30," he said. And so what this underscores is that there is dynamism in the world economy, but it's not in the United States and it's not in Western Europe."

Seventy-nine of Russia's billionaires live in Moscow. New York has only 58.

Oil Boom

The spurt is largely the result of a global commodities boom. Russia's economy is thriving again thanks to high prices for its top export, oil, prompted by unrest in the Middle East. Russia is the world's biggest oil exporter, and prices for Russian oil have risen almost 25 percent since the beginning of the year to around $115 a barrel. That has buoyed the Russian stock market.

In a televised meeting with a pleased-looking Prime Minister Vladimir Putin last week, Finance Minister Aleksei Kudrin said the oil boom could enable Russia to resume paying into its sovereign wealth funds for the first time since the global financial crisis sent the previous oil boom plummeting into recession in 2008.

The rising oil prices have also boosted the value of the ruble, but not enough to arrest inflation, which is contributing to growing public dissatisfaction with the government, especially among lower-income Russians.

Pollster Lev Gudkov of the independent Levada Center says despite the improving oil economy, an increasing number of Russians are unhappy and worried about their future. Still, he says, public reaction to Russia's place on the "Forbes" list is typically muted.

"It might as well have happened on the moon," he said. "The list essentially doesn’t affect people's lives and doesn’t interest them."

Yawning Gap

Forbes has said the increase in the number of billionaires is good for others in society because their businesses grow economies and create jobs. But Gudkov says Russians see the yawning gap between their country's super wealthy and the vast majority of impoverished people as evidence of a system that isn’t fair.

"People feel the authorities are corrupt and the presence of the super rich is a result of colluding between big business and politicians," he said.

Gudkov says most people don’t care about the "Forbes" list because they feel they're powerless to do anything about the inequities of Russia's economic system.

Economist Mikhail Delyagin agrees the reappearance of Moscow's billionaires signifies a sharp growth in the unequal distribution of wealth in Russia.

"Social injustice has grown sharply, as has public anger," he said. "State support goes not to those who really need it, but to those who are already wealthy enough."

President Dmitry Medvedev has made modernization a key policy, including diversifying Russia's economy to protect it from falling oil prices. But Delyagin says Russia relies even more on exports of oil, gas, and metals than it did in 2008.

For now, there's no sign the trend will change any time soon.
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