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Russia Navigates Fallout of Economic Crisis

With its fortunes tethered to volatile natural gas and oil prices, Russia has suffered record inflation and unemployment in the global financial crisis. In the second of her series of reports from Russia, Margaret Warner examines the country's economic picture.

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  • JIM LEHRER:

    Next tonight, Margaret Warner continues her reports from Russia. Tonight, how its economy is faring in the global downturn.

  • MARGARET WARNER:

    It's the annual Vienna Ball in Moscow, where Russia's rich and aspiring rich step out for music, waltzing, and schmoozing with other swells.

  • ALEXANDER SYROMYATNIKOV:

    This is the very new Russia, and I love it. Do you love the new Russia? She loves the new Russia.

  • MARGARET WARNER:

    The glam and glitter of the new Russia took off during the first eight years of the decade, as economic growth soared and real incomes doubled. Many urban Russians got used to the nice things in life, as a new middle class and consumer culture grew.

    And until the global financial crisis hit late last year, most Russians thought the good times would keep rolling here, says Maxim Oreshkin, chief of investment bank research for the private Rosbank.

    MAXIM ORESHKIN, Chief of Investment Bank Research, Rosbank: Everyone expected that the economy will continue to grow, that the wages will continue to grow. And now it changed one day, and you see the unemployment rate very, very high. You see the income falling.

  • MARGARET WARNER:

    Now, in Moscow, cranes stand dormant as the rapid construction of the boom years stalls. And the tycoons who own much of this property, the oligarchs, are feeling the pain, says Oleg Anisimov, editor of Finans magazine and its annual Russian billionaires list.

  • OLEG ANISIMOV, Editor, Finans Magazine (through translator):

    In 2008, there were more than 100 billionaires in Russia. This year, there are fewer than 50.

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