Russian entrepreneurs keep Mammon at bay

Street life SAMOTECHNY LANE, MOSCOW

MY HUSBAND, Costya Gagarin, and his oldest friend, Costya Vasilyev or "Little Costya", represent a class of Russians that is genuinely new.

The so-called "New Russians", who drive around in limousines and carry suitcases of cash abroad, are actually very old Russians. If they are not former Communist bosses then they are the sons and daughters of Communist bosses who grew up with indecent privileges and have got richer by robbing their own country.

Costya and Costya, by contrast, are two working class lads who started out in life with nothing and have achieved their success by hard work. They belong to a tiny new middle class that exists between the top layer of often-criminal super-rich and the great mass that still lives in grinding poverty.

Costya Gagarin grew up in a wooden house without a bath in small town called Kirovsk near what used to be Leningrad. The town was on the front line during the war and every square inch of earth there was riddled with bullets. Costya's brother Sergei lost his hand at the age of 11 playing with a grenade. Costya was "lucky", getting an education up to age 16 at a school where the headmaster made the pupils dig his vegetable garden when they should have been studying.

Desperate to escape from Kirovsk, Costya made it to the bright lights of Leningrad by accepting a place at a technical college to study methods of refrigerated storage on the railways. Here he met Little Costya, whose generous family took him into their home.

Costya Gagarin soon dropped out of the tech, tried to get into theatre school and ended up earning his living by building houses for private clients, which in those still-Communist days was illegal. Little Costya stayed on at tech and was rewarded with what might have been a job for life on the state railways.

But both boys dreamed of better things. When enterprise was freed in Russia, it was natural that they should go into business together. Costya and Little Costya, a whole head shorter than the bear-like Gagarin, started a painting and decorating business.

Costya Gagarin was living in Moscow by this time. Costya Vasilyev joined him, living out of a suitcase and leaving his wife and child in St Petersburg until he could afford to rent a flat for them in Moscow. The problem at the outset was lack of capital. Costya and Costya had the equivalent of only pounds 2,000 between them when they began and so they had no choice but to borrow heavily at crippling interest rates. They borrowed not from banks but from friends who made a profit as moneylenders. In this way, many friendships in Russia have been spoilt, although the two Costyas have not lost too many friends.

Their own profit has grown slowly as they have had to pay back debts. It has been one step forward and nearly one step back, although now the forward movement is more marked.

Not long ago Little Costya took charge of the home improvement business by himself. His material standard of living has risen - he has a car and a house in the country - but unlike many "New Russians" who have sold their souls to Mammon, he has kept his balance. "I'm not interested in money for its own sake," he says. "The point is to make life better for my family."

Costya Gagarin, a bigger risk taker, has branched out into a new business in which the stakes are higher. Together with Costya Vasilyev's younger brother-in-law Dima, he runs a firm called Hobgoblin that supplies wholesalers all over the former Soviet Union with the T-shirts, badges, gothic jewellery, rucksacks and flags beloved of different youth groups from punks and hippies to heavy metal and football fans.

Recently, in the week when the State Duma decided it was better to pretend Taiwan did not exist rather than risk offending China, Costya and Dima were in Taipei buying silk flags for the Moscow football club Spartak.

Potentially there is a fortune in this business, which is why, like most entrepreneurs in the bigger league, Costya has a mafia godfather who protects him. "It's like having an insurance policy," he says. When racketeers held him up at gunpoint it paid off. Costya believes the bandits were dealt with more efficiently by the godfather than they would have been by the police.

The youth fashion venture throws up moral questions that we thrash out in our home at Samotechny Lane. Russian skinheads are closely allied to neo-Nazi groups. For a while, Costya saw no harm in selling badges to them if it made money. But since he saw a black American being beaten up by skinheads at Moscow's Gorbushka music market, he has come round to my view that rock should always be against racism.

Helen Womack