Not like most people in Moscow live in palaces.
There is a certain Russian expression: “Москва — не Россия” (i.e. Moscow, isn’t Russia), to denote the idea that while the capital may be rich, at least by Russian standards, the rest of the country languishes in grinding poverty. This is a trope is frequently taken up by the Western media, which at times presents the Russia outside Moscow and St.-Petersburg as a wasteland languishing in Third World-style destitution. It is also commonly implied that Moscow is growing fast in prosperity, while the rest of the country lags behind.
And at first glance the statistics seem to confirm this, with salaries in Moscow for 2010 almost double the Russian average. Income disparities are even greater, the average income in Moscow being 2.5 greater than in Russia as a whole. It accounts for about 20% of Russian GDP while only representing 7% of its population. But as is usually the case, there is an important catch. As argued in an excellent article by Sergey Zhuravlev, there are several factors dragging down Moscow’s real level of prosperity.
First, prices for a fixed assortment of goods and services in Moscow are approximately equal to the OECD average, and higher than in the rest of Russia by a factor of about 1.4 (see Rosstat). This means that a ruble of consumption in Moscow only buys as much as 70 kopeks in the provinces.
As a result, the 2.5 differential in incomes – this figure, by the way, is down from its peak of 3.6 in 2000, so in reality Moscow has grown substantially slower than Russia as a whole – is reduced to about 1.8 as of 2009.
However, what’s more, Moscow’s level of inequality is the greatest in Russia (as one might expect of a city with so many billionaires). It’s Gini index of 52 is about 10 points above the Gini index for Russia as a whole. So the median resident of Moscow got only 36% as much income as the typical Russian in 2009 (albeit this figure would likely recover to its more typical level of about 50% after the recession). A disparity of this modest scale is fairly large but not completely atypical by developed country standards.
Two conclusions follow. First, headline figures of the gulf of the inequality between ordinary denizens of Moscow and the rest of Russia overestimate its real extent due to their omission of price differentials and intra-regional inequality (both of which favor Russia). Second, the gap has been slowly narrowing over the past decade, as both incomes and prices in the Russian interior slowly converge to Moscow/OECD levels.
This is not to say that Moscow is poor, far from it, most of its socio-economic and consumption indicators are at or near the top of the Russian regions (e.g. meat consumption, Internet penetration, etc). But for most people living standards are not cardinally different from what they’d experience in in any other Russian city.
I live in the central administrative district of Moscow, at Taganka, and have a salary of 60,000 RUR a month, which by the yardstick set by the Russian government means that I am middle class. However, I don’t earn much more than does, say, a metro motorman. I have three children, two of school age and one at kindergarten. My wife doesn’t work: she’s a full-time housewife and mother, although by profession she is an engineer, having graduated from the prestigious Baumann Institute.
We live in a quite cramped three-bedroom flat in a 15-storey, 25-year-old block, which was completely renovated 5 years ago. We have no car. We do most of our shopping at local Russsian cut-price supermarkets such as “Perekryostok” and “Pyatyorochka” and occasionally at the French-owned “Ashan”.
We spend most of the summer months at our country cottage (dacha) situated some 55 miles west of the city. We bought it in 2004. We sometimes go to the Black Sea coast for a couple of weeks in summer as well, though we never go abroad – apart from the Crimea, which I do not consider as “abroad”. We never eat out. We seldom go to the theatre.
Most people in the West would, I suppose, consider that we live an impoverished life. However, the standard of living that I enjoy here is no worse than that which I had in my native country, the UK, where I last lived some 25 years ago in Northwest England. In several aspects, I should consider my present standard of living better than it was when I lived in the UK.
The vast majority of my Russian neighbours seem to enjoy a a higher standard of living than I do: they all have cars – and not old Russian ones. They all holiday abroad – usually in Turkey or Egypt, but sometimes further afield, e.g. in Thailand. They seem to earn more than I do – my next door neighbour is a computer programmer and earns more than twice as much than I do.
When I live in the Moscow region countyside at our dacha, I see little evidence of abject poverty, nor have I witnessed poverty in the provinces, though there are certainly many people who, for various reasons, do live in poverty in Russia, just as there are poor people in any other country, including the USA. I was in Tula province at a sanatorium on the banks of the Oka River two years ago and nobody seemed undernourished and living in abject misery there.
Hello Moscow Exile,
Have you seen Expatistan.com? It does cost of living comparisons between different cities. I’ve Googled a cost of living comparison between Moscow and Sydney and came across the website. According to information supplied by respondents, living costs in Sydney are 43% more than they are in Moscow. Here’s the link: http://www.expatistan.com/cost-of-living/comparison/moscow/sydney
In Australia, households that spend more than 30% of their total income on mortgage or rent payments are said to be financially stressed. One property website I looked at said 73,000 households in Sydney or 12% of households were financially stressed as of October 2011.
In parts of Sydney other than the western and south-western suburbs it can be difficult to tell who’s actually poor as people will often cut back on entertainment and day-to-day expenses before they’ll actually give up children’s school fee payments or other major expenses. The phenomenon of middle class people going without food or selling all their furniture to make necessary mortgage and school payments and keep the house and not disrupt children’s schooling has been reported in newspapers here.
60.000 EUR/month?
Two comments:
1. On standard of living. In the last few years I’ve traveled to some Russian provincial areas and cities (Petrozavodsk and Karelia in general, Kazan, some areas outside Moscow). The gap in living standards is real, but there have been notable signs of improvement in some of these places. Kazan, being a republican capital, has been seriously renovated in recent years and has lots of urban amenities, although there were still a lot of rough areas when I visited.
2. The real Moscow problem in my view is something else: in a country of this size, it is unhealthy to have one city dominating everything. In a small or medium-sized country, it’s natural; but in Russia, anyone who wants to “make it” knows they have to do it in Moscow. This contributes to the overcrowding, traffic, prices, and general craziness of the city, while draining ambitious people from distant regions.
Interesting point, Karlin. Maybe we should we start saying “Moscow has all the Russias within”, acording to the Natalia Zubarevich’s piece, instead of “Moscow isn’t Russia”, or something like that.
Cheers and congrats!
I remember a joke from one Russian TV show. There – the alleged presenter of some program invites a guest and introduces him in the following way:
“I am very pleased, that in today’s program we have as a guest ambassador of Moscow to Russia”.
I am afraid I can add little to this since I have not travelled outside Moscow and St. Petersburg. However friends of mine (Russian and British) who have travelled outside Moscow support your picture.
I think the point about Moscow being an isolated oasis of (very relative) prosperity in a vast wasteland of poverty had more truth behind it in the 1990s than it does today.
One observation I would make: by alleging that there is a vast gap between Moscow and the rest of the country western and some Russian writers find it easier to deny the true extent of the country’s recovery. Since Moscow’s affluence has become too visible to be any longer deniable especially to the many western travellers who visit it, western and Russian writers who want to claim that the country remains steeped in backwardness and poverty really have no choice but to claim that Moscow is somehow fundamentally different from the rest of the country.
On this note I will say that in Canada there is a gradient in wealth between different regions and within the provinces themselves. After traveling a bit I think I better understand why “central Canada” is resented in the rest of the country.
In no way can 20% of the GDP in the main city be construed as a distortion of development in Russia. You have this pattern around the world with countries that have any size. It reflects historical development and basic logistics. It is government “meddling” that actually tries to redistribute development to regions where none would occur under untethered market conditions.
For a large country such superconcentration of wealth is bad for development. European countries like France and the UK are hugely centralized (much more so than Russia) but the relatively small geographic size partially compensates the negative impact. Imho in Russia it is not the case
Related to Moscow’s relation to the rest of the country, in what sense do you, Karlin, use the term empire (as in “Russia’s Sisyphean Loop”)?
I was wondering: Is it a country where the ruling class is culturally and/or ethnically different from many governed peoples? I’m not convinced that’s true in case of the Russian “empire.” Is it a state reigning over culturally diverse lands? That’s a trivial, a common characteristic. Is it a system that organises its own growth? Maybe!
I would like it spelled out for my translation. Not providing some kind of explanation of a key & controversial term isn’t layman reader friendly.
Moscovites may be earning more on average, but this does not necessarily translate to a higher than average quality of life compared to other parts of the country. For example if you look at the massive problems that Moscovites have to deal with due to the superconcentration of resources and the dramatic overpopulation (such as being stuck in traffic for hours each day) then any gains from having a higher disposable income are easily cancelled out as far as quality of life goes. Btw. this applies not only to Russia, but any country hosting megalopolises