Money, power, control… Who really are the Russian oligarchs?

• The war between Ukraine and Russia, and the economic sanctions that are falling on the latter, put the oligarchs back in the spotlight.

• The assets of these Russian billionaires are gradually frozen by Western countries, in response to the invasion.

• What is the oligarchy really, and what role does it play for Russia?

A volley of economic sanctions slammed into Russia following the invasion of Ukraine on Thursday, and more news could come very soon.

Among them is the freezing of the assets of the oligarchs, these Russian billionaires with often unscrupulous fortunes.

The United Kingdom has notably sanctioned five Russian businessmen on its territory, all close to Vladimir Putin.

Behind the yachts and palaces spread out in full view of the West, the oligarchs hide a complex history and dubious links, especially with Russian power.

takes stock.

Where do the Russian oligarchs come from?

It all started at the end of the 1980s, when the Soviet Union began to privatize part of its economy in the hope of reviving it before fully embracing the market economy, informs Cécile Vaissié, university professor in Russian studies and Soviets.

Jean de Gliniasty, director of research at the Institute of International and Strategic Relations (Iris), specialist in Russian issues and author of the book

(L'Inventaire), explains: "Privatization was done by good.

All the workers in a factory received vouchers which represented the ownership of the company, but the number of vouchers depended on the class of the employee”.

A worker, for example, had only one voucher, compared to 50 or 100 for a manager.

Very quickly, a small caste manages to accumulate many good, by exchanging them against services or by defrauding, and finds itself at the head of a considerable fortune, and a stranglehold on most of the Russian economy.

Rebelote of privatization in 1995-1996, when the State, over-indebted and in need of funds for the campaign for the re-election of President Boris Yeltsin, sold some of its assets to the 

the

seven bankers, a group that accounted for half of Russia's wealth in the late 1990s.

What links with Vladimir Putin?

The higher the summit, the harder the fall.

The arrival of a certain Vladimir Putin at the head of the country will change the situation.

The new president is determined to bring this caste to heel.

"We could criticize the oligarchs of the first generation on lots and lots of aspects, but they still represented a counter-power, economic of course, but also media, by controlling many media", nuance Cécile Vaissié.

A counter-power lost with Vladimir Putin, determined to be the only master aboard the Russian ship.

"All the Russian oligarchs who did not submit to power had big problems", attests Jean de Gliniasty.

Of the seven bankers of the 1990s, only two escaped disgrace: Vladimir Potanin and Mikhail Fridman.

For the others, the backlash was harsh: prison, exile, banishment from society.

The best known example is that of Mikhail Khodorkovsky, ex-Russian oil magnate and the country's richest man in the 1990s. The billionaire was arrested in 2003 for tax evasion and large-scale fraud, spent ten years in prison and sees his Yukos oil business being dismantled.

With the power of Vladimir Putin will be born a new class of oligarchs, much more numerous and much more submitted.

"They are mainly relatives and friends of Vladimir Putin, who derive their fortune from this proximity to the head of state," says Jean de Gliniasty.

"The oligarchs are either old rich who have shown allegiance, or new ones who are friends of Putin", summarizes Cécile Vaissié.

What influence do they exert on Russia?

According to the Boston Consulting Group (BCG), Russia's Fortune 500 own 40% of the country's wealth.

If the oligarchs have often flamed in the West, Vladimir Putin has been working for several years for a return of capital to the Motherland.

A maneuver with two advantages: to secure Russian fortunes in the event of a conflict with the rest of the world and to allow Russia to benefit from these riches.

“This policy has been crowned with success: an increasing share of the income from corruption is now invested in the country, and former officials no longer buy castles in France or ocean-going yachts, but chain stores, office complexes, factories and restaurants in Russia,” notes a report by the French Institute for International Relations (Ifri).

“These oligarchs serve their country so as not to fall into disgrace and not to attract the wrath of Vladimir Poutine”, supports Cécile Vaissié.

The Ifri report takes as an example Alexander Tkatchev, Minister of Agriculture from 2015 to 2018, who left his post "with more than 650,000 hectares of land in the Krasnodar region, the value of which is estimated at one billion dollars. dollars”.

The oligarchs therefore now actively participate in the country's economy, even if it means carrying out philanthropic actions – building roads, bridges, etc.

– in order to be seen well in Moscow, specifies the researcher.

Blocking their assets, is it really useful?

As a result of this repatriation of capital, can the decision to tackle assets really be effective?

Obviously, the Russian oligarchs did not wait for the conflict to disperse their money to the four corners of the world, particularly in tax havens that are not easily accessible.

Between these hiding places and the return to Russia, “the major part of the fortune of the oligarchs is sheltered, estimates Jean de Gliniasty.

Nevertheless, the latter will not appreciate seeing their children being unable to make prestigious studies in England or the United States, and losing some other social ranks of this kind.

»

For Cécile Vaissié, if Western assets only represent a part of the money of the oligarchs, they are nonetheless important for them: "The oligarchs are under constant threat from Vladimir Putin, who can exclude them from the system at any time.

Before, they could hide in the West, in their castles or their yachts.

If we block their assets, they are blocked in Russia, at the mercy of Vladimir Putin's moods.

Anything but trivial.

World

War in Ukraine: Many countries impose a new wave of sanctions on Russia

World

War in Ukraine: Why is it almost impossible to suffocate Russia economically?

• Money

• War in Ukraine

• Billionaire

• Fortune

• Russia

• World

• 0 comment

• 0 share

  • Share on Messenger

  • Share on Facebook

  • Share on Twitter

  • Share on Flipboard

  • Share on Pinterest

  • Share on Linkedin

  • Send by Mail

• To safeguard

• A fault ?

• To print