Russian Oligarchs












Russian Billionaires
The EU ,the U.S. and allies have attempted a stranglehold on Russian companies ,oligarchs and  banks ,in response to Russia’s invasion of Ukraine whoes capital estates and super yachts  have left many of us wondering- What makes someone an oligarch and how did they become so rich?
Elise Giuliano, a lecturer in the political science department at Columbia University who focuses on post-Soviet Russia  said that Oligarchs are exceptionally wealthy businessmen who are politically and socially influential and they’re often personally connected to a country’s top political leaders( not always).
The traditional definition of an oligarch would include some political influence but it’s become apparent since the war began as most of the country’s billionaires have little or no connection with Russian President Vladimir Putin.
Russian oligarchs made their fortunes in the 1990s during the chaotic aftermath of the Soviet Union’s collapse, as state assets were offloaded to private bidders which were often in corrupt deals. During this period of expansion and  market liberalization, well-to-do businessmen, former officials and plucky entrepreneurs acquired very  large stakes in Russian companies in oil and gas ,railway and transportation, metals and mining,  agricultural products and other core industries.
Roman Abramovich 

Some newer group of oligarchs became wealthy through their close  ties to Putin, who has ruled Russia in one way or another since early 2000.Alternately, Putin has  enriched and punished oligarchs, treating magnate and their businesses as pawns in his political chess matches.  Then Russia’s richest man,Mikhail Khodorkovsky, was arrested in 2003 for tax crimes after he supported Putin’s political rival and he was later pardoned and released in 2013. Still, some of today’s oligarchs are current or former Putin officials.  A longtime friend and advisor to Russia’s leader, Yuri Kovalchuk, obtained large stakes in  media companies and  insurance through his ties to Putin.
The  origin of Russia’s oligarchy were between 1992 and 1994, when the newly independent Russian Federation ran a voucher privatization effort. Under the privatization effort , shares of some 15,000 state-owned firms were made available to only private buyers. The aim was to allow ordinary Russians to buy shares ehile only the well-connected businessmen acquired blocks of vouchers which gave them large or controlling stakes in firms. According to a 1999 International Monetary Fund study ,under the voucher program, two-thirds of all privatized shares came to be held only by company insiders.
In 1995 ,Russian President Boris Yeltsin’s loan-for-shares scheme minted some of Russia’s wealthiest oligarchs. In return for loaning the deficit-burdened Russian government money and helping finance Yeltsin’s re-election campaign and only a few wealthy businessmen received shares of 12 state-owned mining  and energy companies in the form of leases. Depending on whether Yelstin won ,the leases would turn into ownership.
After Yeltsin got victory, Vladimir Potanin, one the deal’s architects, took a controlling stake in Norilsk Nickel which is the   the world’s largest producer of refined nickel. Other beneficiaries included Roman Abramovich and Khodorkovsky , who acquired sprawling interests in gas and oil.

The 1998 financial crisis of Russia was a temporary setback for the oligarchs.  Russia’s increasing economic integration and soaring commodities prices  into the West in the 2000 minted several new tycoons. According to a report of 2001, Russia had eight billionaires worth a collective $12.4 billion. According to Forbes data,ten years later, there were 101 billionaires worth $432.7 billion.
Later ,some oligarchs learned their wealth was conditional on obedience to Putin. They could see no further than the example of Khodorkovsky who had spent ten years in prison.Boris Berezovsky, another oligarch, who was critical of  V. Putin and  thrived under Yeltsin, sold his Russian media holdings and went into exile.
As Putin has asserted state control and consolidated power over more private businesses,silovarch; a new breed of oligarch emerged -a Russian word for the country’s military and security elite. Some silovarchs know Putin personally during his early post-Soviet political career.

The silovarchs are business class elites who have leveraged their networks in the  the military  or Russian Federal Security Service to amass extreme personal wealth.Silovarchs are not equally represented on corporate boards of the so-called state corporations, and they often own  very large stakes in firms from sectors in which profitability depends on government favor.Since 2003, Putin’s friends and the silovarchs have  risen to control crony sectors of the economy and to hold important positions in the executive branch.
As the West punishes Russia ,oligarchs face a rocky future . As of March 20, some of them are under personal sanction by the U.S. ,EU and its allies. And, it no longer seems to matter which side they’ve taken. Elite oligarchs who’ve sold their Russian assets and moved their holdings to the West are hurriedly distancing themselves from Putin and his regime. Eventually, many of them are being slapped with sanctions .Some silovarch  and those with Russian assets haven’t been protected by Putin. They’ve seen their fortunes plunge as Russian markets collapse.