The Alternate Reality of the Russian Elite During Vladimir Putin’s War in Ukraine

As thousands of Ukrainians fled their submerged homes after a catastrophic dam explosion last week, high-society Russians gathered for a festival of glitzy restaurants in the Black Sea resort town of Sochi, only 800 km from the devastating floods.

The event, called Gastreet, saw some 5,000 citizens pay up to $2,000 for the opportunity to listen to some of Russia’s top businesspeople, restaurateurs and influencers over five days. The event also included concerts, lavish nighttime experiences and gourmet dinners.

If there’s one thing that’s been made clear at the resort town of Sochi, it’s that no amount of Western sanctions, Kremlin restrictions or spillover violence into Russia can keep the country’s rich and famous from to live large, despite the war raging in neighboring Ukraine.

Take Ksenia Sobchak, Putin’s supposed goddaughter and one of Gastreet’s VIP guests who spoke at the resort town of Sochi last week. The Russian influencer – who reportedly earned more than $3 million from her holding company, Careful Media, last year – continued to promote products on her Instagram page ahead of the event, even though the app has been banned in Russia.

One of its latest marketing campaigns is for Primepark, a luxury real estate complex in the heart of Moscow.

“Imagine, a valet meets you in the parking lot, bellboys carry your shopping bags to your apartment, housekeepers help you with all your daily chores around the house – I’ve always said comfort comes from details,” Sobchak wrote alongside photos of herself as a designer. outfits, wandering in luxury apartments. (Comment sections are flooded with replies blasting Sobchack with “reminders” of the countless missiles descending on Ukraine.)

Ksenia Sobchak at the St. Petersburg International Economic Forum.

Maksim Konstantinov/SOPA Images/LightRocket via Getty Images

Speaking to The Daily Beast, the PrimePark manager claimed the war has not slowed apartment sales in the complex, which comprises nine towers and units with a starting price of $6,000 per square meter and includes amenities such as tennis courts and swimming pools.

As the war in Ukraine continues, hundreds of thousands of Russians have no choice but to recreate their luxurious lifestyle at home, either because of Kremlin-imposed travel bans or sanctions which prevent Russians from obtaining travel visas or investing in other countries.

“In the first year of the war, the elite real estate market shrunk by about 45%, and prices also fell a lot, but now people who are under sanctions and cannot invest in Europe are coming back… and investing in elite real estate – they just don’t have any other options,” Yana Madrykina, one of Moscow’s top luxury real estate agents, told The Daily Beast .

“Some elite resorts and cottages remain dark, but landlords are in no rush to sell real estate. We have clients who are ready to invest tens of millions of dollars,” she said, adding that ‘she had just closed a $1.4 million condo.

The elite prefers to do nothing to change reality.

Back in Sochi, restaurateurs from Moscow discussed how to grow businesses across the country, speaking at festival sites called “As a King”, “Barstreet” and “Winestreet”. It smelled of barbecue and expensive perfume, one of the Daily Beast attendees told the Daily Beast in an interview on Tuesday.

“Oh, was there another problem in Ukraine? Honestly, I haven’t had time to read about politics, I’m developing a new restaurant in Sochi,” Yelena Korshunova, one of the guests, told The Daily Beast when asked about recent developments in the war. She explained that her father, a Moscow businessman, had recently helped her finance her plan to open a new restaurant in the area. “Since we cannot travel to Europe, because of anti-Russian sanctions, we are creating Europe here for foodies.”

Can’t stop, won’t stop

There’s “a kind of eating disorder caused by the shock of war,” another Gastreet guest, who only wanted to be identified by her first name, Marina, told The Daily Beast. Wife of a prominent investment banker, Marina was complaining that all her favorite restaurants in downtown Moscow were overbooked last weekend.

After the war, she says, her husband moved his business to Dubai, where their family often mingle with new friends among the Iranian and Syrian sanctioned elites.

“Russian children of Kremlin bureaucrats, who are revolting against their parents in places like London, still cannot live and earn money honestly just because they are Russians,” she said. “So they go to Dubai, one of our hubs these days.”

People at the annual Gastreet Food Festival in Sochi, Russia, June 6, 2022.

Yulia Zhemchugova/Alamy Stock Photo

Marina said she was planning a brunch soon with friends at Vadvare, an elite restaurant hidden in a luxury apartment building in the heart of Moscow, which is home to many civil servants.

“There’s an Italian chef Emanuele Pollini in Vadvare, he experiments with food, which reminds me of my favorite cousin in Milan,” she said. “We eat in the best restaurants, exercise in elite gyms, but when we walk outside we know this is not Europe.”

Many members of Russia’s upper class continue to post their spending on social media, seemingly oblivious to reports of devastation in Ukraine or attacks on Russian border towns.

This “business as usual” appears to have caught the attention of Evgeny Prigozhin, the leader of the Russian mercenary group Wagner, who resorted to public rebuke from the Moscow elite for sending soldiers to die as they ” grew” in their luxury.

Meanwhile, Russian oligarchs continue to enrich themselves despite widespread sanctions. Twenty-two billionaires were recently added to Forbes’ list of Russia’s richest men. Local investment, particularly in commercial real estate, is booming, beating the 2017 record, although foreign investment has fallen to just 3%.

“The middle-class population has shrunk by almost 50%, a ton of foreign businesses have left, so now those who can’t spend are investing their money” in Russia, said Mandrykina, the real estate agent. The elite, she added, are “able to buy all the brands they liked before the sanctions. Goods are imported from China, India or the United Arab Emirates.

Olga Bychkova, a Kremlin watcher for three decades, believes that “while many intellectuals and creatives feel terribly guilty about the war, a large number of middle and upper classes are taking advantage of this exciting time”, using it as an opportunity to “developing local products”. to replace forbidden items and prosper.

‘Gas money is drying up, but oil money is floating,’ she told The Daily Beast, referring to Russians who have made money from business deals with Dubai, China , Brazil or India.

“The elite would rather do nothing to change reality, as long as they make a ton of money.”

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