Russia's New Middle Class

Right: Shoppers in St. Petersburg look over the wares at an outdoor market.

ussians are consumed by the desire for Russia to be a "normal" country, and "in a very Russian way, they have pretty much succeeded in making it one," says Harley Balzer, a senior fellow at the U.S. Institute of Peace. Balzer, director of Georgetown University's Center for Eurasian, Russian, and East European Studies, discussed Russia's new middle class at an Institute meeting December 17. He had just returned from the second of two recent trips to Moscow and St. Petersburg. Balzer's fellowship project focuses on Russia's new middle class and its potential impact on the development of Russian democracy.

Russia still operates with a large unofficial economy and thus its middle class is a "shadow" middle class, Balzer said. Consequently, "middle class" needs to be defined as a cultural category based on possessions and lifestyle activities rather than on economic indicators. "Perhaps half of personal income is generated in Russia's 'alternative' economy and is not showing up in statistics."

With help from his Russian friends--who initially insisted, "There is no middle class. I'm middle class, but I'm an exception"--Balzer has begun to develop indicators of middle class status. These include eating in cafes, owning a car, and/or remodeling a kitchen within the last three years. The middle class includes lawyers, accountants, and securities industry employees. Even the Russian press now refers to this new middle class.

Crime is one of the major factors that perpetuates a shadow economy and thus a shadow middle class. This is so in part because people hide their income to avoid paying taxes or attracting the attention of the mafia. Organized crime is ubiquitous: every political leader in Russia has to make some compromises with mobsters in order to get anything done. Westerners need to use a different yardstick for judging Russian society than for other societies because of all the upheaval the country has gone through, Balzer said. "When the Russian people realize the same German foodstuffs cost twice as much in Moscow as they do in Estonia, and the reason is that they have to pay Russian mobsters in Germany to ship the foodstuffs out and Russian mobsters in Moscow to bring it in, maybe they finally will decide they want to do something to stop it," Balzer said.

On the political front, progress toward democracy is slow but tangible, Balzer said, adding that "elections now are the one legitimate way to hold public office." At the same time there has been a significant shift in political power from the Duma to the Federation Council. Alexander Lebed, Boris Yeltsin's former National Security Council head, is considering a run for governor in Tula, which would give him a place in the council, perhaps the best platform from which to launch a presidential bid in the next national election. In the meantime, Balzer said, Lebed could help turn the council into a more powerful institution in setting a direction for the country. © 1997 United States Institute of Peace

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