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Last Updated: Friday, 10 August 2007, 15:17 GMT 16:17 UK
Scraping by in a Russian resort
Bathers at the open-air spa in Pyatigorsk
Tourists and residents bathe in one of Pyatigorsk's open-air spas
In the second of a series from southern Russia, the BBC's Steven Eke reports on the wealth gap in the spa town of Pyatigorsk.

"Pyatigorsk" means "five peaks", and is the Russified version of "Beshtau", the Turkic name for the highest mountain in the region. A town of some 200,000 people, it is the capital of southern Russia's spa resorts.

Pyatigorsk has a unique atmosphere. This year, summer has brought a drought and temperatures of up to 46C. There are many Russian and foreign tourists.

The town's Soviet-era sanatoria are doing well, after the economic depression of the 1990s. Some are reserved for the military while others are purely commercial - and far from cheap.

BBC map

Unusually for Russia, there are also many cyclists, testing their stamina on the winding mountain roads on the outskirts of the town.

Many of the town's mineral waters are said to have special therapeutic value. At one spot, bathers were immersing themselves in a bubbling pool of sulphuric water.

I am travelling from southern to central Russia to find out how people far from Russia's boomtowns live. Here, society is conservative. There is fear of crime and "banditry", given the instability plaguing much of the North Caucasus.

Making ends meet

The local people are extremely hospitable, and more than happy to talk about themselves and their lives. Whatever the arguments between London and Moscow, I have experienced no hostility whatsoever.

A view of Pyatigorsk
Life for most of Pyatigorsk's permanent residents is far from a holiday

Most say life is very hard. Salaries are low - $100-200 a month on average, while prices continue to grow.

It is not uncommon for people here to do more than one job. There is a pervasive cynicism about politicians, with many accusing them of personal enrichment at society's expense.

There are some new, smart restaurants and shops. But there are few customers, with recreation for most people being an evening stroll down the town's main street. It is known locally as "Broadway". A huge statue of Lenin still towers at one end of it.

Behind the lush greenery and picturesque mountain setting, there is considerable urban decay. Many of the once grand 19th-Century buildings are now fading.

Much of the Soviet-era architecture is shabby, especially housing. In some suburbs, water is only available for a few hours a day.

Forced to flee

I came across an ethnic Russian family who had fled the war in Chechnya. They complained bitterly that they had been "abandoned" by the Russian government.

Russian refugees from Chechnya living in Pyatigorsk
This family are among thousands who fled Chechnya's wars

I found seven members of the same family living in a ramshackle house just a few minutes from the town centre. They had waited four years for official compensation for the loss of their property in the Chechen capital, Grozny. By that time, the sum on offer had been eaten up by inflation.

Out of curiosity, their neighbours came to find out who the unusual visitors were.

In a conversation I have heard so often all over the former Soviet Union, they explained how, in Soviet times, a shashlik (meat kebab) and a jug of beer could be bought for less than a rouble. Now, they said despairingly, they could hardly afford their daily bread and (sometimes not even daily) milk.

In keeping also with Soviet traditions, the neighbours then reported the arrival - and the questions - of the foreign journalists to the authorities. Old habits die hard.

The businesswoman

A very narrow section of society has prospered. In this part of Russia, it forms a still very embryonic middle class.

Natasha and her daughter
Natasha advocates self-reliance

Another family I visited has done very well.

Natasha, who made her money in business, now describes her occupation as the "full-time upbringing of her daughter".

Her flat, in a new apartment building, would put those of many Londoners to shame.

Life was improving, she insisted. But given what 70 years of communism had done to Russia, she added, people needed to be realistic about the pace of change.

She urged her fellow Russians to learn to rely more on themselves, and less on the state.

Read Steven Eke's first report here:

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