If you ask most people how Russian oligarchs make their money, they’ll probably say “oil.” And while it’s true that a lot of Russian oligarchs do have interests in the country’s oil industry, that’s not the whole story. In reality, there are a number of different ways that these wealthy individuals make their money.
In this blog post, we will take a look at some of the most common ways that Russian oligarchs make their fortune. We will also discuss how you can use these strategies to make money for your own business. So, if you’re interested in learning more about Russian oligarchs, keep reading!
How Do Russian Oligarchs Make Their Money?
Many of Russia’s oligarchs made their money in the 1990s, during the privatization of state-owned assets. They used their connections to the Russian government to acquire valuable state-owned companies at discounted prices.
Today, many of Russia’s oligarchs continue to use their close ties to the Kremlin to maintain their wealth and power. They are often involved in corrupt practices, such as bribery and embezzlement.
Some of Russia’s oligarchs have also been accused of involvement in organized crime. For example, Semion Mogilevich, one of Russia’s most powerful oligarchs, is on the FBI’s ten most wanted list for his alleged role in a multi-million dollar fraud scheme.
Despite their questionable business practices, many of Russia’s oligarchs are extremely wealthy. In fact, several of them are included on Forbes’ list of the world’s richest people.
Here are some ways in which they make their money:
What is a Russian oligarch, Russian President Vladimir Putin? How Did Russian Oligarchs Get So Rich? They subsequently stashed their earnings in foreign bank accounts rather than investing them in the Russian economy.
Oil And Gas
As mentioned, many Russian oligarchs have interests in the country’s oil and gas industry. This is one of the main reasons why Russia has been able to become one of the world’s leading energy producers.
Banking And Finance
Another common way for Russian oligarchs to make their money is through banking and finance. A number of these individuals have controlling stakes in some of the country’s largest banks.
Metals And Mining
Russia is also one of the world’s leading producers of metals and minerals. As a result, a number of Russian oligarchs have interests in this sector as well.
Real Estate
Many Russian oligarchs also have significant holdings in the country’s real estate market. This includes both commercial and residential properties.
Manufacturing
Finally, some Russian oligarchs own or control large manufacturing businesses. This can include everything from car factories to steel mills.
How Did The Fall Of The Soviet Union Make Russia’s Oligarchs Rich?
The rise to international prominence of Russian billionaires like Roman Abramovich, Boris Berezovsky, Alisher Usmanov, and Oleg Deripaska over the past few decades has furthered the notion that the oligarch is synonymous with superyachts, sports washing, and shady geopolitical maneuvering of post-Soviet Russia.
Oligarchies are not essentially Russian, but the idea has now come to be firmly identified with the nation. It makes one think of ruthless, well-connected businessmen who gained billions by robbing the wreckage of the defunct Soviet Union and remaking Russia into a paradise for untamed capitalism.
The first wave of Russian oligarchs were largely hustlers who had made their money in the late 1980s when the Soviet Union started to relax its harsh regulations on private business operations or by grabbing entrepreneurial chances. They had the intelligence and wealth to take advantage of a poorly run privatization scheme.
It might be argued that Boris Yeltsin, the first president of the Russian Federation, contributed to the development of conditions that were ideal for the burgeoning oligarchy by rushing Russia’s transition to a market economy.
The Oligarchy Of Yeltsin
Price limits were removed in December 1991, and Russia experienced the first shock of Yeltsin’s shock treatment. The nation had a severe economic crisis.
Due to their ability to take advantage of poor Russians and pay deeply discounted prices, the soon-to-be oligarchs were able to acquire massive amounts of vouchers from privatization schemes, which, lest we forget, were intended to bring about a distributed ownership model.
The oligarchs, who had also committed to supporting Yeltsin’s reelection, kept control of many of Russia’s most successful companies when the government defaulted on those loans, as was expected.
Once more, a small group of tycoons was able to take advantage of a privatization process that was becoming more and more tainted and capture control of extremely successful state-owned enterprises, including steel, shipping, mining, and oil firms.
The planning paid off. Yeltsin was able to win reelection thanks to the support of his increasingly powerful lenders, who at that stage had extensive media sway.
At that time, Yeltsin’s transformation of Russia into a market economy a kind of capitalism that concentrated power in the hands of a small number of cronies confirmed a new power structure in the country.
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