Oil-Rich Russia Embraces New Middle Class

July 13, 2006 — -- It's a luxury that Russians Dennis and Marina Shelipanov never thought they'd be able to afford: a second car.

The source of their new prosperity? Russia is pumping more oil than Saudi Arabia. Oil and gas wealth is sweeping across the country and transforming this post-Communist wasteland into a Russian version of a petro state.

In big cities, such as St. Petersburg where the Shelipanovs live, the new wealth is instantly apparent as breadlines have given way to BMWs and empty shelves have been replaced by packed cafes.

But the economic impact goes deeper than surface glitz. Finally able to capitalize on the nation's natural resources, the Russians have cut in half the number of people living below the poverty line and wrestled unemployment to a respectable 7 percent.

Perhaps the most significant sign is shopping -- the trademark of a true middle class. These days, the Shelipanovs often browse aisles at Ikea, one of the mega-discount stores now available to the discerning consumer.

"It's not just about buying everyday things," Marina Shelipanov said. "Now we can make plans, think about something good for our son, at some point try to get a house."

Dennis Shelipanov is a doctor and Marina Shelipanov is a dentist, which both were underpaid professions in Russia until recently. Now, as the economy has improved, they can begin to dream about the future.

"The government has balanced its books, is awash with money and is able to pay the salaries that make a middle class," said Steven Sestanovich, a senior fellow for the Council on Foreign Affairs.

The prosperity in Russia is startling to people who visit after years away -- it almost looks like Paris. Along with European charm, Western-style plastic is everywhere. Citibank is trying to get in on the action with a St. Petersburg branch.