Europe’s largest mall opens in Russia despite ruble instability

The largest shopping in Europe was opened in Moscow to an orchestra playing the Ode to Joy and the cut of a ribbon.

The mall, Aviapark, covers a space equal to 36 football fields and once it operates at full capacity, will contain a 17-screen theater with sufficient seating for 4000 people, in excess of 500 stores selling absolutely everything and 80 restaurants.

However, although the center was opened with the usual pomp and ceremony, there was uneasiness about the event.  The ruble is declining and the economic climate in Russia is unstable.  

Aviapark construction commenced in northern Moscow during 2012 at a time when the economy in the country was more positive.  The site of the large shopping mall is where Catherine the Great erected a tent city in celebration of gaining control of Crimea from the Ottoman Empire during the 1770s.  However, once again, the costs of Russia taking control of Crimea, along with a decline in oil prices have negatively affected the ruble.

The demand for imported goods has been dampened by the weak ruble, however local production is limited as there is not much industry in the country.  More than one third of the country’s food is imported.

Most of the first-day visitors to Aviapark appeared to be browsing and not buying.  

Economists have attributed three factors for the ruble’s decline.  The first and most important is related to the overall economy and concerns that Russia should implement
reforms.  This issue was compounded by the reaction to the problems in Ukraine, which resulted in sanctions from the west.  The final problem is the decline of the oil price, which affects the country’s main export.

Igor Rotenberg is one of Aviapark’s main investors.  His father, Arkady Rotenberg, and his brother, Boris, are both on US and EU sanctions lists, along with several other businessmen with links to Putin.

Many people still feel Russia has potential, however for middle-class Russians who had become accustomed to purchasing imported products and going on holiday abroad, the economic downturn is a real problem.

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Aviapark

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