Vladimir Putin, Russia’s long-time ruler, launched an unprovoked war on Ukraine over a month ago. The West launched sanctions on Russia including on the Oligarchs that have benefitted from Putin’s corrupt rule. This article by Blake Schmidt and Scott Carpenter published by Bloomberg Wealth examines who these oligarchs are and what sway could they have on Putin. Here is an excerpt:
Plenty of countries have super-rich business leaders with political influence. Russia took this to a different level. The wealthy, connected men who enabled and profited from the transformation of Russia’s economy and society under President Boris Yeltsin came to be known as oligarchs. (An oligarchy is government by a small group of people.) Though Russian billionaires these days are routinely called oligarchs, their role in society has changed under President Vladimir Putin, complicating efforts to target them as a way to punish Russia’s government for the invasion of Ukraine.
1. Who are the oligarchs?
Russia’s original oligarchs included some of its earliest entrepreneurs from when Mikhail Gorbachev loosened the strictures of Communist Party control in the late 1980s. They made fortunes in the 1990s as Russia, under Yeltsin, was transformed from the capital of the Soviet Union into a primitive state of capitalism. Yeltsin’s government expedited that process by privatizing state assets at deep discounts, putting massive wealth in the hands of a select few — some of whom then struck a deal to use their fortunes and media assets to help Yeltsin defeat a resurgent Communist Party to win re-election in 1996. That deal came to be known as “loans for shares,” as the government placed its cash in the banks of oligarchs, took the money back as loans, and then defaulted on them. In essence, the oligarchs got state assets in exchange for state money. Significantly, these oligarchs also exerted sway on Yeltsin’s administration, influencing policy and in some cases serving in formal government positions.
Read the full article here.
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