What’s behind closure of Russia’s largest market?
Cherkizovsky of Moscow, Russia, Europe’s largest market and a cash cow that generated millions of dollars a year, was shut down couple weeks ago. According Moscow government, Cherkizovsky‘s closure was due to the fact that it’s a chaotic, filthy hub for knockoff and smuggled goods.
Apparently, it’s not that simple. Other factors appear to be at play.
First, the closure comes amid rising hostility toward dark-skinned migrants among ethnic Russians, as a sharp economic downturn throws millions out of work. The market consists of some 12 separate shopping areas selling everything from clothing and electronics to cheap Chinese toys teemed with shoppers. Most of these shops were owned and operated by foreigners or immigrants in Russia. Chinese was a large part of the group. So many have believed the shutdown was a step taken by the Russian government to drive the foreigners, particularly the Chinese merchants, out of this country. Moscow mayor even shouted in front of cameras, “Go home, you Chinese!”
Nevertheless, that’s still not the key reason.
The 740-acre covered market is operated by Telman Ismailov, an Azeri-born businessman who made a huge fortune in Russia in trading and property development since the free market movement took place in Russia some three decades ago. He may have fallen afoul of authorities due to his shows of ostentation amid Russia’s economic meltdown.
Earlier this year, Ismailov launched a lavish $1.5 billion hotel on the Turkish coast, replete with Hermes crockery, Italian marble, gold leaf and a 5-acre pool.
Some observers suggest that at the heart of the lock down lies an age-old Russian disease: official corruption. Ismailov might have felt he could no longer afford to pay off everyone who demanded graft. There are also speculations that the attack on Ismailov was an effort to undermine Moscow Mayor Yuri Luzhkov, thought to be Ismailov’s close ally.
The closure of Cherkizovsky appears to also be part of Prime Minister Vladimir Putin’s campaign to crackdown on some of Russia’s most criminalized industries. In a radical move, the Kremlin recently forced every casino and games arcade to close, offering as an alternative four regulated gaming zones in far-flung parts of Russia.
There seems to be little likelihood the market will reopen. Traders there, including a large number of Chinese vendors who consider the market as their lifeline, don’t have many options. They have become the ultimate victims of the shutdown, no matter what had motivated the Moscow’s decision.