Page 56 - BNE_magazine_06_2020 Growers

56 I Eastern Europe bne June 2020
Moscow makes up a fifth of Russia's economy and is home to almost one in ten citizens. It is the epicentre of the coronavirus epidemic, but thanks to its size and wealth it is best equipped to weather the crisis
Moscow wounded by the coronavirus epidemic, but best prepared to weather the storm
Ben Aris in Berlin
More than half of all Russia’s 300,000-plus registered cases of coronavirus infections are
in Moscow, making it the epicentre
of the Russian epidemic. It is also one of the largest urban economies in the world and the biggest city in Europe, accounting for one fifth of the country's total GDP. The population of Moscow is more than 12mn people, and more than 20mn if the surrounding region and commuters are taken into account. That means the Moscow lockdown imposed on March 30 by Moscow Mayor Sergey Sobyanin is especially painful for both the country’s population and economy.
But Moscow, as a metropolis, has always suffered less from economic instability than the regions thanks to the concentration of wealth in the capital and the size of the economy, which
is as large as most Central European countries. Russians may be be poor, but Muscovites are not. Many enjoy salaries
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that are on a par or better than their EU peers and that are up to five-times higher than their peers in the regions. In the wild days of the '90s following the collapse of the Soviet Union and the complete destruction of the economy the cliche was: “There are two Russias: Moscow and everywhere else.”
Moscow Deputy Mayor Vladimir Yefimov gave Russian daily Vedomosti a wide- ranging interview on May 19 on how the Russian capital is faring.
Last year, consumer spending in the city amounted to $197bn. According to this indicator, Moscow ranks third among European cities. However, in the current crisis caused by the pandemic, consumer demand has fallen sharply: non-food stores are closed; the service sector
is practically not working. Already, Moscow has lost RUB140bn ($2bn, or 2% of Russia’s GDP) in revenues and has been forced to cut costs. According to
Yefimov, the city has “paused” projects worth RUB350bn ($4.9bn).
"To one degree or another, of course, all sectors have suffered, but the Moscow economy feels better than many. Moscow, as a metropolis, has always suffered less from economic instability due to the diversified structure of the economy and large consumer demand," Yefimov told Vedomosti.
The Russian government has been moving remarkably slowly in rolling out relief measures, as it is clearly keen to nurse its large resources and does not want to simply throw money at
the problem. Yefimov reiterated this cautious stance.
"We are only at the beginning of a new crisis. And while there is no clear understanding when we can remove the restrictions, it is very difficult to predict something. At the same time, we can