Video: Russia in the 21st century

By Sue Herera Anchor
CNBC
updated 9/24/2004 9:58:04 AM ET 2004-09-24T13:58:04

Go to Russia looking for the stereotypical images, and you will not be disappointed. But a typhoon of change has blown through the former Soviet Union, and even Lenin wouldn't recognize Russia now.

“Fifteen years ago, it was like ... I don't know how to say it ... like a jail,” said Moscow resident Igor Petruhov.

“Fifteen years ago, it was lines for bread and vodka,” said investigative journalist Kirill Belyaninov. “Now we have to stay in line if you want to buy a Bentley.”

Moscow is a capitalist boomtown. Only a dozen years after the fall of communism, the former Soviet Union has embraced the free market with a bear hug.

And Russia is now one of the world's fastest growing economies.

Moscow now has more billionaires than any city in the world, according to Forbes magazine.

The real estate market is on fire.

“Right now, you're talking you need at least $1 million ... up to $2 million ... to find something decent in that area, is how the price has gone up,” said Irina Zharova-Wright, a real estate broker for Intermark Group.

Food stores are brimming and crowds of premium western shops line streets choked with European luxury cars.

The fuel for this economic fire is oil.

Russia has huge reserves, and exports 6 million barrels a day, second only to Saudi Arabia.

But many observers question what strength the country has beyond natural resources.

“The agricultural sector is in bad shape, the industrial sector is in a bad shape, with the exception of two major cities — Moscow and St. Petersburg — much of the country is still in a mess,” said Zbigniew Brzezinski of CSIS.

In fact, nothing defines Russia now better than the gulf between the haves and the have-nots.

“If you travel 20 miles outside Moscow — with all the Moscow fancy cars an boutiques and all this stuff — you'll find people are living in the houses without running water, without gas and with problems with the electricity” said Belyaninov.

Not surprisingly, some long for the stability of a Soviet past.

“Life for me has become more difficult as I am a pensioner,” said 78-year-old Octyabrina Gorbunova. “Prices are quickly rising, while our pensions are not.”

Others agree.

“During Soviet times, my refrigerator was always full,” said 65-year-old Nellie Pushina.

There are other ironies.

President Vladimir Putin, like Russia itself, reaches out to the west, inviting investment and seeking World Trade Organization membership.

Yet he has also alienated western countries by curbing Democratic freedoms and consolidating his own power.

Russia's economic miracle has other dark clouds. Environmental damage and corruption are rampant.

Terrorism is spreading, and then there's uncertainty ... a lingering pessimism that may be as much a part of the Russian character as its rich culture.

“In my country, you can never be sure about what happens tomorrow. So there are no guarantees,” said Elena Nyasnikova, editor for Cosmopolitan Russia.

Consider that Russia is the world's largest potato producer, but they are crops grown not by big farms, but by millions of backyard gardeners who simply refuse to believe the good times are here to stay.

© 2012 CNBC, Inc. All Rights Reserved

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