Ukraine: 5 minutes to understand the role of Russian oligarchs subject to economic sanctions

This is a term that has come up frequently since the beginning of Russia’s invasion of Ukraine, especially when it comes to sanctions. Even before Vladimir Putin crossed the red line, Britain decided to target the oligarchs. Since then, many countries have decided to hit this caste into their wallets, especially by robbing their assets.

Where did they come from?

The history of Russia’s oligarchy is not so old, as it dates back to the end of the Soviet Union, where the government liberalized the country’s economy based on the massive privatization of the country’s previously dominated enterprises. After that, the economic elite was established, “in political life, capture The Process of Private Diversion of the State ”details Andrey Kinjakin in an article on the article on the oligarchs of modern Russia. Boris Elstin, the first president of the Russian Federation, “relied on this few fairly wealthy men,” commented Carol Grimaud Potter, a professor of Russian geopolitics at the University of Montpellier.

This privileged class took advantage of the context of the domestic “weak legal and political system,” the article author continues. In addition to becoming new owners of large corporations, they build close ties with the government, especially the budgetary branch, play a role in certain political decisions, and for some, the Security Council. As Deputy Secretary of the Society or Deputy Prime Minister of the Government.

What is your current relationship with the government?

“When he came to power, Vladimir Putin wiped out the oligarchy,” Carroll Grimaud Potter explains to us. The president even signed a “mutual distance” agreement based on “respect for oligarchy’s property in exchange for no interference with political issues,” Andrey Kinjakin details in his article on this subject. ing. “Vladimir Putin wanted to impose verticality of power,” added a professor who is also the founder of the Geneva think tank CREER.

Because of this, he did not actually put an end to the oligarchy, but simply relied on his relatives, who he had set up in the heads of large corporations in the country, to change its shape. Previously, oligarchy used their wealth to influence power, but now it is their proximity to the head of state that allows them to increase their wealth. Some conditions are the same. “Putin rewards the loyalty of his friends, but they must not criticize the state and they must prioritize national interests over personal interests,” explains Carol Grimaud Potter. “Yes, but get rich with Putin’s blessing,” she summarizes.

Another big change: In recent years, led by Vladimir Putin, elite members have increased their investment in Russia and decreased their investment abroad. “The increasing share of income from corruption is now being invested in the country,” says a note from Ifri (French Institute for International Relations).

Where do their property come from?

Originally, oligarchs owe their property to the privatization of various economic sectors following the collapse of the Soviet Union and the end of communism. Some branches were particularly profitable. The hydrocarbon and gas industry, the mining and steel industry … list Andrey Kinyakin in his work. People close to Vladimir Putin have also built their fortune in the media and banks.

who are they ?

Some names stand out without quoting all the members of the oligarchy under Putin’s administration. This is the case with Matthias Wanich, “a friend of Vladimir Putin when he was in the German Democratic Republic (GDR),” recalls Carol Grimaud Potter. He is currently the Managing Director of Nord Stream. Arkadi Rothenberg is also part of this Russian elite. “I was Putin’s judo teacher in St. Petersburg. His property is currently estimated at $ 2.5 billion,” explains a geopolitical professor.

In this oligarchy, Putin’s “neighbor, mostly barbecue friend” Yuri Kovalchuk also had a villa on the shores of the lake, so he found it. Putin, who was a friend of the KGB, Sergei Ivanov, or even Igor Setin of the “Petersburg Clan”, worked at the St. Petersburg City Hall before taking power.

Are sanctions against them really effective?

When the idea of ​​sanctioning Russian oligarchs is often mentioned, it is, among other things, indirectly affecting Vladimir Putin. The members of this elite are ” Slush fund Explaining a note from Ifri, “and as a guarantor of his financial interests” by the Russian President.

The problem is, at the request of Vladimir Putin, “most bureaucrats, heads of public enterprises, and businessmen serving the federal and regional political elite are trying to inflate even to break ties with the West.” Further states. .. Therefore, the effect of sanctions may be reduced.

There is no doubt about the loyalty of those close to Vladimir Putin. Even if they are affected by Western sanctions, the oligarchy “will not rebel or abandon” their president and friends, Carroll Grimo Potter said. “They have to accept losing billions without saying anything. It’s an agreement. »»