Russians live the caviar dream

Down nearby streets lined with parked Mercedes dai, Lexus and BMW vehicles, shoppers can find Tiffany & Co. tif, Chloe, Gucci, Ralph Lauren rl and Bulgari stores along Moscow's chic Tretyakovsky Street. A few blocks from there is Stoleshnikov Lane, where there is another Dior store, along with Van Cleef & Arpels and Cartier.

Plenty of people here can afford these stores. Moscow is home to 44 billionaires, second in the world only to New York's 66, according to the Forbes 400 list. Most of Russia's 119,000 millionaires, as estimated last year by Merrill Lynch mer and the consultant group Capgemini, live in the greater Moscow area.

The city is now the most expensive in the world, according to this year's Mercer Human Resource Consulting survey of expatriate living costs. There's a Ritz-Carlton near Red Square and a five-star Marriott mar and Sheraton not far away.

Many more four-star hotels cater to business travelers, who are bringing what Finance Minister Alexei Kudrin last week estimated would be $70 billion in foreign investment this year on top of last year's $41 billion. Rooms in a four-star hotel cost about $500 a night. It's easy to pay $50 or more for a two-course meal and a glass of wine in a restaurant that caters to foreigners. A beer costs $8 in a hotel.

"It's very expensive," says Evgeny Gavrilenkov, chief economist for Troika Dialog, Russia's oldest private investment firm. "It's not just hotels and food. In the central part of Moscow, real estate prices are as high as Paris."

Modern two-bedroom apartments in the city's center are advertised for $3,500 to $10,000 a month. A six-room "cottage," as Russians call suburban houses, can run up to $65,000 a month in the prestigious Rublyovo area about 12 miles west of Moscow, which is home to many Moscow millionaires and the rising business and entrepreneurial class.

Anna Muravina is an interior designer and entrepreneurial success story. She caters to Russia's wealthy. Her MuGu Interiors firm, which she started in her apartment 12 years ago with a friend, now employs 15 to 20 people on average and keeps about seven projects going at a time. She is rated a top Russian designer by the likes of Architectural Digest and Andrew Martin International.

Russia's rich are different, Muravina says. Many older ones, who came out of the old Soviet elite, "had terrible tastes. They came from small villages and hadn't traveled," she says.

That's changed as more have traveled, their offspring have risen in such state-run industries as gas and oil, and a younger entrepreneurial class has emerged in the free-market sector, she says.

Nonetheless, she says, she still gets odd requests. Some clients will see things in foreign hotels, such as minibars in their rooms, and want one in their bedroom. Or, she says, they'll want two kitchens: one for their cooking or catering staff to work in when they entertain, and another for the family to sit around in, just as they did in their old apartments.

"It's a little strange, but it's Russian," she says.

Not everyone in Moscow is rich, although the average annual income of $23,000 here is double the national per-capita income. Moscow's 15 million people also produce roughly 28% of the nation's economic output, Troika's Gavrilenkov says.

Economic inequality

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