One of the main ways the US and Europe are punishing Russia for its invasion of Ukraine is through sanctions. The Russian economy is being choked off by these sanctions, which are also making life and business difficult for Russia’s oligarchs, an elite class of extremely wealthy individuals who started exerting significant influence on Russian politics as they became wealthy during the privatization of the post-Soviet state.
Many oligarchs are having their assets and yachts seized by other countries, and they are being prevented from traveling and from conducting the majority of their business with the US and Europe.
The intention is to put pressure on Russia’s wealthiest residents to condemn and call for the termination of President Vladimir Putin’s offensive against Ukraine.
Oliver Bullough, a journalist who publishes a weekly about oligarchy at Coda, stated, “It’s the trillion-dollar question. Can Putin be restrained by these people?
But it’s crucial to understand that the Russian oligarchy doesn’t function the same way it did before Russian President Vladimir Putin was elected in 2000; its members now have a lot less clout and influence.
Few billionaires, many of whom are situated outside of Russia, have made only subdued remarks regarding Ukraine as a result of these harsh sanctions so far.
Bullough told Recode that Putin has “introduced oligarchy in-house.” And now, with a king and several aristocracies gathered about him who own their property so long as he is willing to tolerate them, our system is far more like that of Henry VIII’s Tudor court.
Bullough continued, “The term ‘oligarchy’ is rather archaic in a strange manner, but we don’t have a better one.
Putin’s Oligarchs’ Meager Influence 2.0
Since Russia’s invasion of Ukraine last month, the world has been debating how the conflict may end and if Putin’s advisors or the nation’s elite class, which was previously highly prominent inside the Kremlin, might have a role to play.
But, says Ben Judah, the senior fellow there at Atlantic Council and author of Fragile Empire: How Russia Fell In and Out of Love with Vladimir Putin, the idea that a single tycoon might suddenly have an impact on Putin is mistaken. Judah said, “That’s not how Russia operates now; that was 15 or 20 years ago.”
Putin pledged to control Russia’s oligarchs during his first presidential run, and he didn’t wait long to begin. The richest man in Russia at the time and owner of a 78 percent share in the enormous Yukos oil firm was imprisoned by Putin in 2003. Khodorkovsky was formally accused of financial crimes, but he was also giving money to Putin’s adversaries.
The oligarchs essentially realized that they only had their money as long as [Putin] wanted them to own it after Putin detained Khodorkovsky. That altered their entire political philosophy. Additionally, it made them more determined to amass as much riches as they could outside of Russia, where it would be secure, according to Bullough.
In the meanwhile, a fresh class of oligarchs rose to prominence known as the siloviki, which mostly refers to businesses with connections to the Federal Security Service, the police, and the military. Putin used the siloviki as his muscle as he worked to consolidate his position of authority. Because of their tight ties to the president, a class of “silovarchs” has emerged who are even more dependent on Putin than oligarchs who gathered their wealth in the 1990s.
Power and riches are shaky for all Russian oligarchs, and they are aware of this. Because of this, the few people who have spoken out so far against the conflict are either foreign nationals or people who live outside of Russia. Even the offspring of oligarchs have made calls for peace, but they haven’t specifically denounced Putin.
Oleg Deripaska, a Russian industrialist with a current net worth of slightly more than $2 billion, deemed peace to be “extremely vital.” He posted on Telegram that “after these events, the entire globe will be different, and Russia will be transformed.” In the wake of claims that Russia meddled in the 2016 US election, the US government imposed sanctions on him for his connections to Putin back in 2018.
Founder of Alfa Bank Mikhail Fridman described the invasion as a catastrophe at a press conference. But in response to a question about leveraging his power to pressure the Kremlin, Fridman said, “You should understand that it’s a very sensitive matter,” and that he could not remark on Putin without endangering his business partners and personnel.
The Evening Standard published an opinion piece by Evgeny Lebedev, owner of the British newspapers the Independent and the Evening Standard, pleading with Putin to halt the conflict. Lebedev is a dual citizen of Russia and the UK and belongs to the British peerage. He has not received a penalty.
Again, it is hardly surprising that oligarchs are responding in such a methodical manner. Direct criticism of Putin would be “a really difficult position to have,” according to Stanislav Markus, a University of South Carolina professor who has done significant research on Russia’s billionaires.
According to Judah, a senior fellow at the Atlantic Council, “Putin essentially made the decision to go all-in in Ukraine.” The old so-called inner circle and the Russian elite as a whole have grown increasingly alienated from Putin over the past few years.
Judah referred to an instance from the security council meeting that Putin called on February 21 just before invading Ukraine. When Putin questioned Sergey Naryshkin, head of the Russian Foreign Intelligence Service, about his support for recognizing the independence of Donetsk and Luhansk, two Ukrainian regions that have been ruled by pro-Russian separatists for almost ten years, he stumbled.
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