The Russian oligarchs (see the related term "New Russians") are
business oligarchs of the former Soviet republics who rapidly
accumulated wealth during the era of
Russian privatization in the
aftermath of the dissolution of the
Soviet Union in the 1990s. The
failing Soviet state left the ownership of state assets contested,
which allowed for informal deals with former
USSR officials (mostly in
Russia and Ukraine) as a means to acquire state property. Historian
Edward L. Keenan has drawn a comparison between the current Russian
system of oligarchs and the system of powerful boyars which emerged in
The Russian oligarchs are business entrepreneurs who emerged under
Mikhail Gorbachev (General Secretary 1985–1991) during his period of
market liberalization. The term oligarch derives from Greek, and
translates approximately as "rule by the few".
1 Yeltsin era
2 Putin era
2.1 Oligarchs in London
2.2 2008 global recession and credit crisis
3 See also
5 Further reading
By the end of the Soviet era in 1991 and during Mikhail Gorbachev's
perestroika, many Russian businessmen imported or smuggled goods such
as personal computers and jeans into the country and sold them, often
on the black market, for a hefty profit.
Anatoly Chubais, the man most credited with the Yeltsin-era
privatization that led to the growth of the oligarchs
During the 1990s, once
Boris Yeltsin became President of
1991, the oligarchs emerged as well-connected entrepreneurs who
started from nearly nothing and became rich through participation in
the market via connections to the corrupt, but elected, government of
Russia during the state's transition to a market-based economy. The
so-called voucher-privatization program enabled a handful of young men
to become billionaires, specifically by arbitraging the vast
difference between old domestic prices for Russian commodities (e.g.
gas, oil) and the prices prevailing on the world market. Because they
stashed billions of dollars in private
Swiss bank accounts
Swiss bank accounts rather than
investing in the Russian economy, they were dubbed "kleptocrats".
These oligarchs became extremely unpopular with the Russian public,
and are commonly thought of as the cause of much of the turmoil that
plagued the country following the collapse of the
Soviet Union in
The Guardian described the oligarchs as "about as popular
with your average Russian as a man idly burning bundles of £50s
outside an orphanage".
Post-Soviet business oligarchs include relatives or close associates
of government officials, even government officials themselves, as well
as criminal bosses often connected to the Russian government who
achieved vast wealth by acquiring state assets very cheaply (or for
free) during the privatization process controlled by the Yeltsin
government of 1991–1999. Specific accusations of corruption are
often leveled at
Anatoly Chubais and Yegor Gaidar, two of the "Young
Reformers" chiefly responsible for
Russian privatization in the early
1990s. According to David Satter, author of Darkness at
Dawn, "what drove the process was not the determination to create a
system based on universal values but rather the will to introduce a
system of private ownership, which, in the absence of law, opened the
way for the criminal pursuit of money and power". In some cases,
outright criminal groups – in order to avoid attention – assign
front-men to serve as executives and/or "legal" owners of the
companies they control.
Although the majority of oligarchs were not formally connected with
the Communist Party of the Soviet Union, there are allegations that
they were promoted (at least initially) by the communist apparatchiks,
with strong connections to Soviet power structures and access to the
monetary funds of the Communist Party. Official Russian media
usually depict oligarchs as the enemies of "communist forces". The
latter is a stereotype that describes political power that wants to
restore Soviet-style communism in Russia.
During Yeltsin's presidency (1991–1999) oligarchs became
increasingly influential in Russian politics; they played a
significant role in financing the re-election of Yeltsin in 1996. With
insider information about financial decisions of the government,
oligarchs could easily increase their wealth even further. The 1998
Russian financial crisis hit some of the oligarchs hard, however, and
those whose holdings were still based mainly on banking lost much of
The most influential and exposed oligarchs from the Yeltsin era
include Boris Berezovsky, Mikhail Fridman, Vladimir Gusinsky, Mikhail
Khodorkovsky, Vladimir Potanin, Alexander Smolensky, Pyotr Aven,
Vladimir Vinogradov and Vitaly Malkin. They formed what
became known as
Semibankirschina (or seven bankers), a small group of
business moguls with a great influence on
Boris Yeltsin and his
political environment. Together they controlled from 50% to 70% of all
Russian finances between 1996 and 2000.
Fridman, Potanin, Aven and Malkin are the only ones on the list to
have retained their influence in the Putin era, which began in 1999.
Khodorkovsky, Berezovsky and Gusinsky "have been purged by the
Kremlin", according to
The Guardian in 2008.
Russia under Vladimir Putin
The most famous oligarchs of the Putin era include Roman Abramovich,
Alexander Abramov, Oleg Deripaska, Mikhail Prokhorov, Alisher Usmanov,
German Khan, Viktor Vekselberg, Leonid Mikhelson, Vagit Alekperov,
Mikhail Fridman, Vladimir Potanin, Pyotr Aven, and Vitaly Malkin.
Between 2000 and 2004, Putin apparently engaged in a power-struggle
with some oligarchs, reaching a "grand bargain" with them. This
bargain allowed the oligarchs to maintain their powers, in exchange
for their explicit support of – and alignment with – Putin's
government. Many more business people have become oligarchs
during Putin's time in power, and often due to personal relations with
Putin, such as the rector of the institute where Putin obtained a
degree in 1996, Vladimir Litvinenko, and Putin's childhood friend
and judo-teacher Arkady Rotenberg. However, other analysts argue
that the oligarchic structure has remained intact under Putin, with
Putin devoting much of his time to mediating power-disputes between
rival oligarchs. Some had been imprisoned, such as Mikhael
During Putin's presidency, a number of oligarchs came under fire for
various illegal activities, particularly tax evasion in the businesses
they acquired. However, it is widely speculated and believed that the
charges were also politically motivated per these tycoons falling out
of favor with the Kremlin.
Vladimir Gusinsky of MediaMost and
Boris Berezovsky both avoided legal proceedings by leaving Russia, and
the most prominent,
Mikhail Khodorkovsky of
Yukos oil, was arrested in
October 2003 and sentenced to 9 years. This was subsequently extended
to 14 years, and after Putin pardoned him, he was released on 20
December 2013. The term 'oligarch' has also been applied to
technology investors such as Yuri Milner, although without involvement
in Russian politics.
Defenders of the out-of-favor oligarchs, often associated with
Chubais's party—the Union of Right Forces, argue that the companies
they acquired were not highly valued at the time because they still
ran on Soviet principles, with non-existent stock-control, huge
payrolls, no financial reporting and scant regard for profit. They
turned the businesses around and made them profitable for
shareholders. They obtain little sympathy from the Russian public due
to resentment over the economic disparity they represent.
An economic study distinguishes 21 oligarchic groups as of 2003.
Forbes listed 36 billionaires of Russian citizenship, with an
interesting note: "this list includes businessmen of Russian
citizenship who acquired the major share of their wealth privately,
while not holding a governmental position". In 2005, the number of
billionaires dropped to 30, mostly because of the
Yukos case, with
Khodorkovsky dropping from #1 (US$15.2 billion) to #21
Billionaire, philanthropist, art patron and former KGB agent Alexander
Lebedev has criticized the oligarchs, saying "I think material wealth
for them is a highly emotional and spiritual thing. They spend a lot
of money on their own personal consumption." Lebedev has also
described them as "a bunch of uncultured ignoramuses", saying "They
don't read books. They don't have time. They don't go to [art]
exhibitions. They think the only way to impress anyone is to buy a
yacht." He also notes that the oligarchs have no interest in social
In 2018, the
USA Treasury published a "list of oligarchs" per Pub.L.
Oligarchs in London
A significant number of Russian oligarchs have bought homes in
upmarket sections of London in the United Kingdom, which has been
dubbed "Moscow on Thames." Some, such as Eugene Shvidler,
Konstantin Kagalovsky and Abram Reznikov, are
expatriates, having taken permanent residency in London. This
community has led to journalists calling the city "Londongrad". Most
own homes in both countries as well as property and have acquired
controlling interests in major European companies. They commute on a
regular basis between the EU and Russia; in many cases their families
reside in London, with their children attending school there. In 2007
Abram Reznikov bought one of Spain's mega recycling companies, Alamak
Espana Trade SL, while
Roman Abramovich bought the English football
club, Chelsea F.C., in 2003, spending record amounts on players'
The billionaire Moscow oligarch Mikhail Fridman, Russia's second
richest man as of 2016, is currently restoring
Athlone House in London
as a primary residence, to be worth an estimated £130 million
2008 global recession and credit crisis
According to the financial news-agency Bloomberg L.P., Russia's
wealthiest 25 individuals have collectively lost US $230 billion
(£146 billion) since July 2008. The fall in the
oligarchs' wealth relates closely to the meltdown in Russia's stock
market, as by 2008 the
RTS Index had lost 71% of its value due to the
capital flight after the
Russo-Georgian War of August 2008.
Ukraine have been particularly hard-hit by
lenders seeking repayment on balloon loans in order to shore up their
own balance sheets. Many oligarchs took out generous loans from
Russian banks, bought shares, and then took out more loans from
western banks against the value of these shares. One of the
first to get hit by the global downturn was Oleg Deripaska, Russia's
richest man at the time, who had a net worth of US$28 billion in
March 2008. As Deripaska borrowed money from western banks using
shares in his companies as collateral, the collapse in share price
forced him to sell holdings to satisfy the margin calls.
Privatization in Russia
Robber baron (industrialist)
Political groups under Vladimir Putin's presidency
^ a b "Russia's Oligarchy, Alive and Well", New York Times, December
30, 2013.[dead link]
^ Scheidel, Walter (2017). The Great Leveler: Violence and the History
of Inequality from the Stone Age to the Twenty-First Century.
Princeton University Press. pp. 51 & 222-223
^ Profile: Anatoly Chubais,”
BBC News, March 17,2005
^ Johanna Granville, "The Russian Kleptocracy and Rise of Organized
Crime." Demokratizatsiya (summer 2003), pp. 448-457.
^ Holmstrom, Nancy; Richard Smith (February 2000). "The Necessity of
Gangster Capitalism: Primitive Accumulation in
Russia and China".
Monthly Review. Monthly Review Foundation. 51 (09).
^ Profile: Boris Berezovsky
BBC Retrieved on April 28, 2008
^ What a carve-up!
The Guardian Retrieved on April 28, 2008
^ Freeland, Chrystia (2000). Sale of the Century: Russia's Wild Ride
from Communism to Capitalism. New York: Crown Business.
^ "Grigory Yavlinsky". www.cs.ccsu.edu. Retrieved 2017-07-30.
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Management Journal, 1 January 2003. Retrieved 31 July 2017
^ Yegor Gaidar: The price to pay
BBC News. Retrieved 31 July 2017
^ Satter, David. Darkness at Dawn: The Rise of the Russian Criminal
State. Yale University Press, 2008.
^ Virtual Politics – Faking Democracy in the Post-Soviet World,
Andrew Wilson, Yale University Press, 2005
^ Braguinsky, Serguey, and Roger Myerson. "A macroeconomic model of
Russian transition." Economics of Transition 15.1 (2007): 77–107.
^ British Paper Names Banking Clique at The Moscow Times, November 5,
^ Dmitry Butrin. "The Results of 10 Years of Capitalism". Kommersant,
March 5, 2002 (in Russian)
^ Billionaires boom as Putin puts oligarchs at N2 in global rich list
The Guardian, 19 Feb 2008
^ Putin: Russia's Choice. Richard Sakwa, (Routledge, 2008) pp 143-150
^ Playing Russian Roulette: Putin in search of good governance, by
Andre Mommen, in Good Governance in the Era of Global is
Neoliberalism: Conflict and Depolitisation in Latin America, Eastern
Europe, Asia, and Africa, by Jolle Demmers, Alex E. Fernández
Jilberto, Barbara Hogenboom (Routledge, 2004)
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^ Oligarchology by Alex Yablon, New York Magazine, Mar 31, 2013
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Free Europe, 31 May 2011.
^ "Khodorkovsky speaks out on plight of Russia's political prisoners".
Euronews. Retrieved 30 December 2013.
^ "Hague court awards $50 bn compensation to
Russia Herald. Retrieved 29 July 2014.
^ Wired Magazine: "How Russian
Yuri Milner Bought His Way Into
Silicon Valley" by Michael Wolff October 21, 2011
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Russian capitalism". Journal of Economic Perspectives. 19 (1):
^ a b c Harding, Luke (October 25, 2008). "Twilight of the oligarchs".
The Guardian. London. Retrieved April 1, 2010.
^ Michael Weiss, IN PLAIN SIGHT: The Kremlin's
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^ According to British journalist Nick Watt, reporting for ABC's
Nightline. (broadcast of June 1, 2007)
^ "Over there: American and other foreign owners are revolutionizing
British football", Boston Globe, May 25, 2007
Athlone House owner: ‘I want to restore it to its former
glory’ 11:21 30 June 2016 Anna Behrmann, Ham and High
^ Billionaire's plans for £65 million derelict mansion approved By
Emma Woollacott Sep 15, 2016
^ Chorafas, D. Capitalism without capital. Springer, 2009.
^ "Russia's Richest Have Lost $62 Billion This Year". Business
Insider. Retrieved 2017-07-30.
^ "Russian Rich Lose $10 Billion in Two Days as Ruble Drops".
Bloomberg. Retrieved 2017-07-30.
^ Thomas Jr., Landon (September 5, 2008). "Russia's Oligarchs May Face
a Georgian Chill". The New York Times. Retrieved April 1, 2010.
^ a b "Margin Calls Ignite Billionaire Fire Sale". Archived from the
original on 2008-10-26.
The Russian Oligarchs of the 1990s
Andrew Bowen, "Why
London Is So Crucial To Putin's Russia." The
Interpreter, 20 March 2014.
David E. Hoffman, The Oligarchs: Wealth and Power in the new Russia,
New York, Perseus
Book Group, 2002.
Mark Hollingsworth and Stewart Lansley, Londongrad: From
cash. The inside story of the oligarchs, London, Fourth Estate, 2009.
"Oligarchology" Mar 31, 2013 New York (magazine)
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