The lightning closure of the sprawling Cherkizovsky market in northern Moscow on June 29th brought some predictable results. With some 100,000 people allegedly made jobless, market traders took to the streets in protest, Moscow Mayor Yuri Luzhkov pledged to send unemployed Chinese and Vietnamese back home and had the professional anti-Putin blogger, Robert Amsterdam calls it “mysterious” seeing Putin’s hand in it.
That disgruntled market traders should try and block the nearby highway in protest was predictable but what is really curious is the silence of the several million shoppers from Moscow and the surrounding region who have also lost a significant resource.
The market covers around 70 hectares. Thousands of people worked and lived there, most of them people from CIS states, including some 17,000 Tajik nationals, as well as China, Vietnam and India. Some people say they never leave the market territory. Many speak only pidgin Russian, and a private security firm ensured the rules, as set by market operator AST, were obeyed. AST is one of several enterprises owned by Azeri billionaire Telman Ismailov. Another is the recently opened $1.5 bn six-star luxury hotel Antalya hotel Mardan Palace Hotel, in Turkey.
How many customers does it take to fill a 70-hectare market with 100,000 traders and employees? On weekends it used to be jostling crowd packed into the market selling everything imaginable from plastic clothes hangers to toiletries as well as shoes, small electrical goods, clothing and luggage. A whole row of stalls were devoted to selling hair dressing and manicure equipment. One section was devoted to home décor. Another for the accoutrements of the tahe-away food trade.
While much has been made in the press about the smuggled goods and a reference is made to last September’s raid when it is reported $2 billion worth of fake and smuggled goods were seized in 6,000 containers, there’s been nary a word of the huge turnover of Russian made shirts, suits, dresses and other clothing. The 600 containers worth an astonishing $2 bn did not make a dent in the market’s operations.
Cherkizovsky was where you could buy a tuxedo for 6,000 rubles or a new 2-piece men’s suit for under 3,000 rubles. There were streets in the market with these kind of bargains one after the other and many factories in Moscow and Vanova kept alive by the trade.
Russian officials and bureaucrats who have never shopped in Cherkizovsky market in their life want the ordinary Russians who do shop there to switch to regular hypermarkets and pay more for their goods.
This creeping attack on Muscovites wallets is led by Industry and Trade Minister Viktor Khristenko. According to respected Russian business daily Vedemosti, he presented a report to the inner cabinet on June 1, in which he bemoaned the fact that despite the state invest8ing almost $2 billion into the consumer goods industry at the end of last decade, the sector is languishing.
$2 bn? That’s laughable. The same value as the paltry 600 containers seized at Cherkizovsky last September is all the government could afford to put into the entire consumer goods industry. It just shows how such investments are best left to the private sector,
Despite this Khristenko’s team with their Armani and Hugo Boss suits and Mercedes cars, want the ordinary Russians to abandon the markets with their cheap products and buy from regulated retail chain stores.
I have no doubt that when the chain stores offer the same value for money as the markets, then the Russian consumer at the lowest levels of the economic heap will exercise choice. Trying to force them into spending more by arbitrarily closing markets like Cherkizovsky, where a developer already has his eye on the land for high rise housing development, will only lead to suspicions of graft and corruption serving vested interests.