Imaqe: Russian model
Mikhail Metzel  /  AP file
A Russian model displays $1.2 million Buggati jewelry and a $1.3 million Bugatti car at Millionaire Fair in Moscow. The fair is a festival of super-luxury goods offering lavish consumer goods to the Russian capital.
updated 11/3/2006 3:52:09 PM ET 2006-11-03T20:52:09

Out of gift ideas for the holiday season? Businesses catering to Russia's millionaires suggest a $1.3 million diamond-encrusted cell phone, a $500,000 racehorse, or — if you're really short of cash — a $70,000 mini airplane.

These are among the items on display at the Millionaire Fair in Moscow this week — a screaming showcase of the country's oil-driven wealth and the free-spending ways of its nouveau riche.

In some ways, the event was testimony to how far Russia has come since the communist era 15 years ago. Russia now has an estimated 33 billionaires and up to 90,000 millionaires, and Moscow is home to more rich people than New York.

Yet the fair, held in a gleaming shopping mall on the capital's northern outskirts, also served as a bleak reminder of the tremendous gap between the small group of the extraordinarily wealthy and the nearly one-fifth of Russians who live below the poverty line of $410 per month.

A 15-fold difference in incomes separates the super-rich from the poor in Russia, said Chris Weafer, chief strategist with Alfa Bank in Moscow. That is well over the 12-fold difference that World Bank studies show can lead to social unrest, he said.

The poor may not be feeling the difference so keenly now that high oil prices are filling state coffers and bumping up their wages and pensions, but the situation could change if oil prices were to drop, he warned.

"There is ultimately an unsustainable wealth gap," Weafer said. "It's not a major issue just yet, but it will be."

The second annual exhibit in Moscow featured some 200 firms offering luxury goods and services such as yachts, sports cars and entire islands to some 40,000 visitors. Sales were estimated at $635 million, organizers said.

Mink coats and glittering jewelry
It was a vanity fair of thin beautiful women sporting mink fur coats and low necklines decorated with glittering jewelry and dark-suited, elegant men shadowed by beefy bodyguards.

One of the booths featured Russian-Dutch-made yachts selling for $3.8 million to $20 million, depending on the size. Despite the jaw-dropping prices, the yachts were all sold out until 2009 and the firm, Timmerman Yachts, was taking orders for after that, said salesman Dmitry Osankin.

"These are very famous and well-to-do people," Osankin said of the companies' clients. "You wouldn't buy a yacht on your last money, would you?"

For car lovers, there was the $1.7 million Bugatti, which was reportedly snapped up even before the fair kicked off, a 1960 Mercedes Cabriolet for $300,000 and $86,000 Jaguars for more modest consumers.

Also on sale was the world's most expensive cell phone — a $1.27 million model encrusted with gold and diamonds. The Swiss Goldvish company has produced only three such phones, one of which was sold at the Millionaire Fair held in Cannes in September to a Russian businessman who wished to remain anonymous, said vendor Ilgar Rustamov.

"This is very interesting and very diverse," said Vyacheslav Sorokin, a 30-year-old Moscow businessman walking hand-in-hand with his girlfriend. "I think we'll get some of the tableware and jewelry."

Guerlain offered a unique fragrance to be sold exclusively to a single buyer. The price: $64,000.

"Our people, they strive to be first, they want to be talked about," said salesman Ivan Belovolov. "And they are ready to pay this money so that people will say about them, 'Look, they got that exclusive perfume.'"

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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