THE TELEGRAPH: Moscow is the most expensive city in the world, like Tokyo before the Nikkei bubble burst. A taxi from Domodedovo airport to the Kremlin costs $170 (£86). Property in Ostozhenka trumps Chelsea. Space fetches $30,000 a square metre.
Nice Tsarist flats fetch $3m to $4m. Even Bolshevik boxes are booming. Moscow boasts 150,000 home millionaires in dollars, says Sergei Polonsky, the Mirax Group tycoon. In a good year, prices double.
This is the curse of commodity wealth, the "Dutch Disease" that eats at the competitive foundations of an economy and incubates a parasite culture. No doubt Russia's scientists, engineers, and cyber talent, will enrich the country, but first it must overcome the toxic effects of oil at $90 a barrel.
"We can no longer afford to buy Russian equipment," said Yevgeny Ivanov, head of Polyus Gold.
"The prices here are one and a half times higher than abroad so we're having to break our rigid rule and turn to foreign-made machinery. It is bad news for Russian firms. The commodity super-cycle is catching up with us through higher prices. It is a disheartening picture," he said.
"There's no infrastructure, no power, no roads. Electricity costs twice what they pay in Alaska and Canada. We face a Soviet bureaucracy passing decrees that make you weep," he said.
The government has declared an infrastructure emergency. Russia has hit the limits of durable growth on today's rickety foundations.China has built 25,000 miles of highways since 1988, Russia a few hundred. Russian economy succumbs to the oil curse >>> By Ambrose Evans-Pritchard International Business Editor
Mark Alexander (Paperback)
Mark Alexander (Hardback)
