The financial crisis is hitting Russian oligarchs hard too, but there's no sign of them tightening their belts. Russia's rich are still digging deep into their pockets, especially when it comes to having fun.
Russia's wealthy won't let those pesky markets and bankruptcies spoil their caviar
“The Most”, Moscow's exclusive night spot for the renowned, the rich and the even richer offers its patrons a luxurious distraction from the stock markets, even -- or perhaps especially -- during this global economic downturn.
Russia's super-rich have lost an estimated 230 billion US dollars as a result of the financial turbulence, but that's not dampened the atmosphere at “The Most”. Instead the party-goers dance the night away, illuminated by giant crystal chandeliers with a value of over a million dollars.
“The Most” even held what it termed an ‘Anti-Crisis Party' recently, serving as an extravagant homage to the bankrupt US investment bank Lehman Brothers.
“Lots of investment bankers came along,” club owner Sergej Paramonov told Deutsche Welle. “Despite the huge losses and the insolvency they appreciated the humor and the sense of irony with which we tackled the problems in the world economy.”
No signs of panic
Anna Barinowa, the editor of the Russian magazine Madame Figaro doesn't expect the oligarchs to curb their spending. She still intends to focus on luxury products with price tags that would make most people weep. Barinowa is convinced that the Russian super-rich are still shopping, and to support her argument she points to the stable sales figures for luxury car makers like Bentley.
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There are few signs of panic amongst wealthy Russians, who are not strangers to financial turbulence. The Rubel crisis in 1998 showed them that even the sharpest dips in fortunes are usually followed by an upswing. Barinowa says many of the oligarchs see this downturn as the financial system balancing itself out, and know that they personally can weather virtually any storm.
“The middle classes are being hit hardest of all, but at the top they'll keep on consuming their luxury products,” Barinowa said. She even expects the desires and the standards of the super rich to increase in the coming years -- if you're spending frivolously in a recession, then you at least demand quality for the money.
Status symbols instead of stocks and shares
Extravagant fashion items still get Russians spending
Top designer Helen Yarmak tries to offer these high quality products, the sable furs she sells are all unique. Only the world's richest people are familiar with Yarmak's boutiques in Moscow, New York and Milan. Janet Jackson and Melanie Griffith are amongst the most famous customers, and business is booming, even now.
The designer is convinced that the financial downturn is good news for her business. People are turning to status symbols like her furs because the values of these real, tangible products are not decided on a stock market floor. “People who invested their money in shares rather than in one of my furs are regretting it a lot now, and they are looking to make amends,” Yarmak said.
Even though the markets are nose-diving and the oil prices are dropping, Russia's super rich are still living the high life. Having put plenty of money aside during better days, for the oligarchs the economic downturn may be an inconvenience but it's not really a crisis.