Billionaires Suffer from Consumer Discomfort

(MOSCOW, RIA Novosti, by Yana Yukova) — Analysts believe about 16,000-20,000 dollar multi-millionaires live in Russia today.

However, although run-of-the-mill millionaires are very happy with their lives, the organizers of a new cross-marketing project called Vladenie think the superrich are experiencing some discomfort. The project takes its name from a Russian word, "vladenie," which has a broad meaning stretching from property to a manor, and involves producers, designers and distributors of items costing $1 million and upwards (aircraft, yachts, real estate, vintage cars etc).

The project organizers believe that it is hard for wealthy people in Russia to find their bearings and use their millions wisely. The problem is that the Russian market is mainly oriented to either the poor or middle class. In such circumstances, billionaires are hard put to satisfy their needs. The Vladenie project was launched as an attempt to find a niche that could satisfy the needs of the superrich. Now, if you are looking for a yacht, you can pick up the phone and dial the number of the project’s call-center, place an order and wait a while.

Businessmen working in the raw materials sector, industry, and other exporters and importers, are the main buyers of elite goods. According to them, Russia’s macroeconomic stability and high oil prices have substantially increased the Russian elite’s welfare. As a result, the demand for deluxe goods and services has risen by over 200% in the past three years. Today, the luxury goods market is worth about $4 billion. Indeed, 2004 alone saw twice as many yachts sold for over $1 million as in 2003. Forty-five percent more business class aircraft were sold. The project’s marketing experts believe their scheme will help increase aggregate sales of such goods by $100 million this year.

The Vladenie team is continuing to expand the range of services on offer. For example, its catalogue includes Abyssinianmares, islands, and, perhaps, stars. Each client will receive a bonus card. For example, after totting up enough points, a billionaire can receive a personal birthday greetings from a famous actor or musician.

To all appearances, Russian society’s stratification is becoming increasingly obvious, and the gulf between the rich and the poor is rapidly widening. According to the Federal Statistics Service, 10% of the wealthiest people in Russia shared 29.8% of the total incomes in 2004, and 10% of Russians with low incomes received only 2%. The average income of the poorest people in Russia (1.9%) did not even reach $30 a month per capita.

Today, 39 million Russians live in poverty. The minimum subsistence level declared by legislators for the whole country is absurd: about $60 per month per capita, and $45 for a pensioner, while average monthly incomes are only about $130.

Scientists at the Russian Academy of Sciences’ Institute of the Population’s Socio-Economic Problems say rich Russians today account for 3% of the nation, the middle class 20%, people with low incomes 40%, people with incomes below the subsistence level 20%, and the poorest people (who can barely afford to eat properly) 7%, while social outcasts make up 10%, or nearly 14 million people.