Business / Economy

Russia’s rich forgo some luxuries but still back Putin

Reuters

Russian model Alisa Krylova canceled her order for the latest Mercedes, spent New Year’s in Moscow rather than skiing in the Alps and now employs Russian staffers rather than foreigners.

The former Mrs. Russia and Mrs. Globe beauty pageant winner is among Russia’s superrich, but even she and many of her wealthy friends are feeling the pinch from the economic crisis.

Driven into “a kind of hibernation,” they are steering clear of celebrity parties and trimming spending to make up some of the millions lost to a weak ruble and a falling stock market.

But the enforced modesty has not yet driven the wealthy out of Russia or turned them against President Vladimir Putin, who has fanned patriotism during the Ukraine crisis and appealed to businessmen to bring their money home to bolster Russia’s position in the worst standoff with the West since the Cold War.

Perched on a golden sofa in the living room of her newly built apartment in Moscow, Krylova, 32, recoils at her compatriots who flocked to buy televisions, refrigerators and buckwheat — a staple — when the ruble plunged in December and shops had yet to change their prices to catch up.

“And what about me? I am calm in dealing with the crisis. Nothing really terrible has happened. Yes, of course, we didn’t fly away on holiday this year because I did not see the point in paying three times over the odds,” said Krylova, whose beauty has put her on the covers of numerous fashion magazines. “So we decided to holiday in Moscow and St. Petersburg and went to museums, theaters — everywhere — and we had a wonderful time. It was great to go to Red Square to see the Christmas tree, and I think it was just as good as skiing in Austria or France.”

Putin is counting on such attitudes. Since coming to power in 2000, the former KGB spy has tamed the powerful oligarchs who in the 1990s used their control over the economy to influence politics and his predecessor, Boris Yeltsin.

After bringing some of what he calls Russia’s “national champions” in the energy sector back under state control, Putin made a deal with private owners of big business: Be loyal and stay out of politics, and you can keep your assets.

The bargain has largely held, even with the ruble down 40 percent against the dollar since last summer and with the economy weakened by a fall in global oil prices and Western economic sanctions over Ukraine.

Konstantin Kostin, a former aide to Putin who now heads the Civil Society Development Foundation, said some in Russia’s business elite are without doubt suffering from the downturn. “Someone may be discontented, but I don’t think that it’s that widespread,” he said. “I think that if we are talking about their political affiliations, then they are loyal.”

Krylova said: “No one wants to show off, and everyone is waiting. When there was the panic … the middle class ran to get its stashed money and started to buy everything. Those who are higher than the middle class and even higher, they are kind of hibernating.”