Saturday, December 6, 2008

Russia's Economic Crisis: Who Got the Story Right?

BOULDER, Colorado -- The Moscow Times seems to be taking an overly sunny view of Russia's economic prospects. Take a look at this story, by Ethan Wilensky-Lanford from the December 1 issue:

"IT Minds Expecting The Next E-Boom"

Now compare this with a story from the New York Times by Ellen Barry back on November 16:

"Russia's High-Tech Sector Reels"

Despite the collapsing stock market, disappearing credit, and a faltering banking sector, Mr. Wilenksy-Lanford expects a "boom" in e-commerce in Russia. He rightly identifies the serious obstacles to doing business on the internet there - low penetration rates, an abysmal postal service, and minescule credit card use, despite a few years of robust growth - but somehow, the rosy predictions of a few online entrepreneurs is enough to qualify a coming boom. The story of wireless networking supply company MeshNetics chronicled in the Times - huge layoffs and no new investment capital - is probably more indicative of the situation in Russia.

Earlier this week I mentioned a story by Miriam Elder for The Independent about Moscow's Millionaire's fair, which described how this year's event has seen fewer visitors and decreased sales amidst the downturn. Mr. Wilensky-Lanford had this headline in the Moscow Times:

"Crisis Fails To Dull Lustre of Millionaire Fair"

The story relies on event organizers and boosters. Russian horse-faced celebutant Ksenia Sobchak is quoted as saying, "Welcome to our anti-crisis event." A yacht salesman argues that people aren't too poor these days to buy luxury items, but they're just too busy to shop. The argument throughout seems to be that these super-rich are recession-proof. I am sure that the likes of Vekselberg and Potanin won't be headed to the poor house any time soon, but I doubt they are shrugging off the quarter-trillion dollars in personal wealth they have lost this past year.

It makes me wonder - has the Moscow Times adopted the policy of Russia's state-owned press, which is required to have at least 50% of their stories be "positive" about Russia?

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