Teaching Comparative Government and Politics

Tuesday, January 15, 2013

Are shopping malls indicators of middle class success?

Andrew E. Kramer, writing in The New York Times, argues that the building of malls around Moscow is a sign of a growing middle class in Russia. Will the middle class succeed? Will its success change politics? If so, how?

Malls Blossom in Russia, With a Middle Class

Mega Belaya Dacha

Shoppers who find that 250 stores aren’t enough can go ice skating, watch movies or even ride a carousel, all under a single roof.

While it sounds like the Mall of America, this mall is outside Moscow, not Minneapolis…

Instead of bread lines, Russia is known these days for malls. They are booming businesses, drawing investments from sovereign wealth funds and Wall Street banks, most recently Morgan Stanley…

As American malls dodder into old age, gap-toothed with vacancies, Russia’s shopping centers are just now blossoming into their boom years, nourished by oil exports that are lifting wages…

The mall boom illustrates an extraordinarily important theme in Russian economics these days. The growing crowds at malls, and the keen interest in Russian malls on the part of Wall Street banks, are signs that the emerging middle class that made up the street protests against Vladimir V. Putin in Moscow last winter is becoming a force in business as well as politics…

“Over the past 10 years, Russia has turned into a middle-class country,” Charles Slater, a retail analyst at Cushman & Wakefield, a commercial real estate consulting firm, said in an interview…

At the core of the attraction for investors is the rising disposable income of Russians, nudged along by policies favoring the middle class, lest their challenge to President Putin’s rule intensify.

Russia has a flat 13 percent income tax rate. Most Russians own their homes, a legacy of post-Soviet privatizations, and so pay no mortgage or rent. Health care is socialized…