Fear haunts Russia's super-rich

BORIS wears a sweaty green T-shirt and works in a shabby office with peeling walls and medieval toilet facilities. But appearances can be deceptive in post-communist Russia. Behind the metal door in his office, computers and other expensive equipment have been installed; and Boris owns four flats, five cars, two country cottages and a yacht.

He is one of the new class of rich Russians who, far from needing foreign humanitarian aid, are much wealthier than the average person in the West.

Boris, 40, and two partners who used to work together in a state enterprise connected with the country's space research programme, are making their fortunes by helping the Russian food industry to achieve Western standards. The one-year-old company, which employs 60 staff, has made some of its money by introducing new flavourings for soft drinks.

The firm, which is officially registered, says that it pays its taxes to the state (at a relatively low rate for Russia of 47 per cent because there are allowances for the food industry) and does not break the law.

Its scruffy office in a pleasant suburb of Moscow buzzes with excitement. 'In the West, businessmen have photographs of their loved ones on their desks, which shows that the family is present even at work,' says one of Boris's partners. 'Here we take our work home and talk about it all the time because we are so happy to be free at last to have our own venture and earn money.'

Being an honest businessman, however, is not easy. Boris is constantly short of ready cash because it is difficult to obtain a bank loan in Russia. Worse, though, is the fear that the mafiosi may break into the office and strip him and his partners of their hard-earned assets.

Boris has already had several visits from the racketeers. On one occasion, seven armed men forced the firm's guards to face the wall and demanded money. He had to give a mafia boss three cars worth a total dollars 25,000. 'It was a one-off payment,' he says, adding that he no longer employs any guards because he believed they tipped off the racketeers.

He is so afraid that he will not allow his real name to be published. He has registered his property under the names of different members of his family and friends, and he has not dared to show off his 9-metre yacht. 'She's moored on the Moscow reservoir,' he says glumly. 'I haven't been out in her once.'

He says he is not super-rich, only middle-class, but admits that his flats, dachas, yacht and cars - including one Chevrolet, one BMW and one Mazda - must be worth about dollars 1m. Boris and his wife Natasha live in one of the flats; outside it looks typically Soviet, but inside it is decorated with carpets on the floors and walls.

One of the other flats has been given to the couple's daughter Katya, who is lucky to live separately in a country where most young people are forced to stay with their parents at least until they are married and often for many years after that. This young woman, wearing a diamond bracelet, dropped in on her parents to extract 5,000 roubles (dollars 5) pocket money to go to the theatre; a pensioner in Russia may receive as little as 10,000 roubles a month.

No records are kept of the number of rich people who live in the new Russia. For one thing, many of the country's wealthiest citizens have decided to live abroad. And fear of the mafia, or the taxman, or both, means that few of the well-off at home are prepared to talk to outsiders.

Irina Khakamada, however, is not afraid to give her real name. She, too, is wealthy but does not want to become so rich that she cannot sleep at night. As a half-Russian, half-Japanese entrepreneur, a member of the board of the Russian Commodities Exchange and a leader of Russia's new Economic Freedom Party, she wears Christian Dior spectacles and a green and black spotted silk outfit by the famous Russian designer Slava Zaitsev. However, she owns only one three-room flat on Leningradsky Prospekt in Moscow. Although she has a disposable income of about 200,000 roubles (dollars 200) a month, this does not tell the whole story, because she also has a lot of shares and other investments.

Ms Khakamada, 38, studied economics at Moscow University, and taught for eight years in a technical high school before setting up a co- operative business that trades in computer software. This was the springboard for her career.

Since she became involved in politics, she has been taking part in Boris Yeltsin's assembly and helping to draw up a new Russian constitution. She plans to stand for parliament when elections are held. A taxpayer and respecter of the law, she believes that Russia's reforms have reached the point where they are irreversible, and that it is possible to become rich honestly. But she adds: 'To be super- rich, you have to be involved in machinations. I am against that on principle. I am not greedy. I don't want the really big money that brings with it big headaches.'

Ms Khakamada, who refuses to be protected by bodyguards but who is driven about in company cars - a modest Lada for everyday business and a fancy Citroen if she needs to make an impression at a reception - has not redecorated her flat, now privatised but where she has lived for many years, because she says Russian workmen are too slap-dash to meet her high standards. And for the same reason, she has not followed the nouveaux riches in having a dacha built in the countryside.

Instead she spends her money on her son, on healthy food from the markets and hard-currency shops, on employing a cleaning woman at home (on a monthly salary of 10,000 roubles) and on her image.

She relieves stress by attending an aerobics club and, although she goes abroad regularly on business, she prefers to take her holidays in Russia. 'I cannot relax in a foreign environment,' she says. 'Dmitri (her husband, also a businessmen) and I always take our holidays separately. We need to rest from each other.'

Ms Khakamada believes that it is not enough to earn a good living, but that she also has a duty to help those less fortunate than herself. She gives about 10 per cent of her income to charity, and is particulary interested in helping Russian women, who are bearing the brunt of unemployment, to start up in business.

The state, however, gives the rich no incentive to help the poor. Income tax is levied at 40 per cent, profit tax on firms at up to 70 per cent, and those who donate money to good causes receive no tax breaks. It will take time for the new wealth of post- communist Russia to filter down from the thin upper-crust to the great mass struggling to survive.

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Campbell: ‘Sometimes you have to be economical with the truth’
newsFormer spin doctor says MPs should study tactics of leading sports figures like José Mourinho
Sport
football
Life and Style
Agretti is often compared to its relative, samphire, though is closer in taste to spinach
food + drink
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
Down-to-earth: Winstone isn't one for considering his 'legacy'
people
News
The dress can be seen in different colours
i100
Sport
Wes Brown is sent-off
football
Voices
Lance Corporal Joshua Leakey VC
voicesBeware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Life and Style
Alexander McQueen's AW 2009/10 collection during Paris Fashion Week
fashionMeet the collaborators who helped create the late designer’s notorious spectacles
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Bookkeeper / Office Co-ordinator

£9 per hour: Recruitment Genius: This role is based within a small family run ...

Recruitment Genius: Designer - Print & Digital

£28000 - £32000 per annum: Recruitment Genius: This Design and marketing agenc...

Recruitment Genius: Quantity Surveyor

£46000 per annum: Recruitment Genius: This property investment firm are lookin...

Recruitment Genius: Telesales / Telemarketing Executive - OTE £30k / £35k plus

£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?