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Monday 15 July 2019

Russia's super-rich tighten their belts but still back Putin

Model and former Mrs Globe Alisa Krylova is among Russia's super rich but even she and many of her wealthy friends are feeling the pinch from the economic crisis - driven into
Model and former Mrs Globe Alisa Krylova is among Russia's super rich 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 (REUTERS)

Elizabeth Piper

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

The former Mrs Russia and Mrs Globe beauty pageant winner is among Russia's super rich 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 rouble and a falling stock market.

But the enforced modesty has not yet driven the super wealthy out of Russia or 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, Ms Krylova (32) recoils at her compatriots who flocked to buy televisions, refrigerators and buckwheat - a popular staple - when the rouble 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 Ms Krylova, whose good looks have put her on the covers of numerous fashion magazines.

It's an attitude Mr Putin is counting on.

Since coming to power in 2000, the former KGB spy has tamed the country's powerful businessmen, or oligarchs, who in the 1990s used their control over the Russian economy to influence politics and his predecessor, Boris Yeltsin.

Loyal

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

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

Earlier this month, Mr Putin appealed again to leading businessmen to bring their money from offshore accounts back to Russia before, he suggested, the West closed off flows in possible further sanctions over Ukraine.

"So he said clearly - you've got enough for a good standard of living so please bring everything back to Russia so we can lift up our country," said Ms Krylova. A self-declared patriot who wants to "pass something on" to the next generation, Ms Krylova still likes to pop over to France and other west European countries for long weekends to indulge herself in French and Italian cheeses, imports of which have been banned by Russia in retaliation for the sanctions.

But mostly, Russia's wealthy are staying home, while making sure they have a firm plan B in place.

Luxury magazine director Alexei Koval said some businessmen had worked out an "evacuation plan" in case they fell out of favour.

"No one wants to show off a nd everyone is waiting.

"When there was the panic, crisis, speculation, the middle class ran to get its stashed money and started to buy everything," Ms Krylova said. "Those who are higher than the middle class and even higher, they are kind of hibernating."

Irish Independent

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