In Siberia, Shopping Malls Are Sprouting All Over - New York Times: "May 17, 2008
In Siberia, Shopping Malls Are Sprouting All Over
By ANDREW E. KRAMER
NOVOSIBIRSK, Russia — In this region of Siberia, long synonymous with gulags and hardship, shoppers mobbed an Ikea store last winter with the vigor of a miners’ riot. They loaded their outsize yellow shopping carts with clothes, housewares, appliances and small furniture.
The store and the surrounding Mega mall, opened last year on a bluff beside the Ob River, are expecting 12 million visitors in 2008 — bursting with pent-up consumerism and oil rubles, unbothered by the economic uncertainty roiling much of the rest of the world.
Siberia, where Russians waited in long lines to buy food with ration cards not long ago, is the improbable epicenter of a huge mall boom. As retail businesses shrink in the United States, provincial Russian towns like this one have become targets of retailers and shopping center developers from around the world. Malls in this area are even poaching managers from as far away as California.
Across the great expanse of Russia — on plots cleared of birch groves and decrepit factories, on the territory of old airports and collective farms — big-box stores are rising at a rate of several a month. Russia is projected to open"
Saturday, May 17, 2008
In Siberia, Shopping Malls Are Sprouting All Over - New York Times
Is there any wonder that Russia's inflation rate is now running at around 15% per year? Consumer binging like this, paralleled by governmental binging (a 45% annualized increase in budgetary spending during the first quarter of 2008), are fun until the piper comes knocking, as he surely will. (Among other ills, inflation encourages speculation at the expense of production, lowers saving rates, and distorts wage negotiations... Over time, all these factors undermine real economic growth.)