Russia's Silent Middle Class

(CNN) -- Russia's newly emerged middle class, which led the country's charge into the free market, now sits on the sidelines and watch as their hard-earned lifestyles crumble. Their charge cards and business skills are powerless in the face of a collapsing currency and government.

The young entrepreneurs and professionals are seen by many observers of Russian politics as a critical force that now lies dormant. The door is open for a savvy politician to unite this segment of society and mobilize it -- for better or worse.

The middle class has become increasingly visible in recent years -- dining out in restaurants with menus full of imported delicacies, shopping for automobiles, working in flashy new banks, running small businesses and even vacationing in the French Riviera. Its growing affluence was most apparent in Russia's major cities, especially Moscow.

Sergei Sokolovski arrived in Moscow from his native Siberia five years ago. A senior researcher at the Russian Academy of Sciences, he watched the city bloom following the fall of communism.

"During the last five years, Moscow has changed a lot," Sokolovski said. "Very rich people have lots of money that has spilled into the city and is slowly leaking into the rest of the population. The streets are cleaner and brighter. New buildings are erected. It's changing to something much better than it was. There are several restaurants and things like that, full of people."

With the devaluation of the ruble a few weeks ago, Moscow's upwardly mobile trend nose-dived along with everyone's bank accounts.

Sokolovski, who had recently deposited a grant worth $10,000 into a Moscow bank, had to withdraw the money to leave for a scholarly exchange program in the United States on August 29.

"When I took all of my rubles from the bank, I lost about $2,000 [from the original $10,000]," Sokolovski said. "Many people, who did not react immediately, will lose much more."

Any hope for Russia to find its way out of its current crisis lies with the elite, not the middle class, Sokolovski said.

Perestroika, a movement begun in 1985 to rebuild Russia economically, "was a revolution from above, initiated by the political elite, not by the people," he said. "Again, it will take a revolution from above. It all depends on the oligarchy, because Russia is not a real democracy."

Russia's middle class cannot play a viable role because it has failed to recognize its own existence, said Harley Balzer, director of the Center for Eurasian, Russian and East European Studies at Georgetown University in Washington, D.C.

"The biggest problem with the Russian middle class is that it hasn't yet defined itself," Balzer said. "You talk to a Russian and they say, 'There is no middle class here.' That's because their image of the middle class is America in the 1960s and 1970s."

Balzer, who is working on a book about Russia's middle class, defines its members as anyone earning the equivalent of $300 to $1,000 per month. He estimated that 20 to 30 percent of the country's population fit that description before the economic crackup began in July.

"It's hard to get an exact number, because everyone lies about their income," Balzer said. "Much of their money comes not in official pay packets, but through other means -- under-the-table payments, stock options, insurance benefits and undeclared rental incomes."

The spirit with which Russia's young entrepreneurs and professionals embraced a newfound sense of individuality is partly to blame for the crisis.

"They were sick of the collectivism," Balzer said. "They opted for a strategy of individual rather than collective action. The middle class was not playing the political and social role that you would expect in a democratic or capitalist society."

They are now paying a heavy price. Their savings accounts are dissolving along with the value of the ruble. Sought-after jobs with international companies and the service sector are disappearing, and small businesses are failing.

"Only when the middle class develops political consciousness can it make a difference," Balzer said. "This crisis might be a learning experience. If they recover from it, one hopes that business people and entrepreneurs will understand that only by bonding together and becoming involved in politics can they ensure long-term stability. It's not enough to make money and stick it into bank accounts."

President Boris Yeltsin lauded the middle class in his February address to Russia's legislative branch, the Federal Assembly. He called "a substantial and stable middle class" the critical basis for a civic society and constitutional system in Russia and said the country must create "the most favorable environment possible for an expansion of the middle class."

Yeltsin failed, however, to get the Duma, Russia's lower house of parliament, to pass a tax code that would benefit the middle class and to provide an effective legal system for its long-term development.

Few are now venturing predictions on the future of Russia.

"One thing we do know," Balzer said, "is that the downwardly mobile members of the middle class were the greatest supporters of Adolf Hitler.

"In Russia, an awful lot of people were just beginning to find their way in (to economic prosperity). They have a lot more to lose than poor people, and they don't like their cut in status. That makes them a very dangerous group, politically. They were disillusioned by communism, disillusioned by capitalism, and now they're looking for a savior.