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Ukraine: five minutes to understand the role of Russian oligarchs, targeted by economic sanctions

2022-02-28T09:36:38.825Z


Even before the start of the war in Ukraine - and as early as 2014 and the annexation of Crimea - the West wanted to strike at the wallet the oligar


It's a term that comes up often, since the beginning of the invasion of Ukraine by Russia, especially when it comes to sanctions.

Even before Vladimir Putin crossed the red line, the UK had decided to target oligarchs.

Since then, many countries have decided to hit this caste in the wallet, in particular by depriving it of its assets.

Where do they come from ?

The history of the Russian oligarchy is not so old, since it dates back to the end of the USSR, when the government liberalized the country's economy based on the massive privatization of enterprises, on which the state had so far taken control.

An economic elite was then set up, acquiring influence in "political life, through the

capture

of the state, the process of private appropriation of the state", details Andrey Kinyakin in an article on the oligarchs article. in contemporary Russia.

Boris Yeltstine, the first president of the Russian Federation, “relyed on this small handful of considerably enriched men”, comments Carole Grimaud Potter, professor of geopolitics of Russia at the University of Montpellier.

This privileged class took advantage of a context of “weak legal and political institutions” in the country, continues the author of the article.

In addition to becoming the new owners of large companies, they have forged close ties with the government - in particular the branch responsible for the budget -, have played a role in certain political decisions and have even, for some, obtained positions of power such as Deputy Secretary of the Security Council or Deputy Prime Minister of the Government.

What are their links with the current government?

“When he came to power, Vladimir Putin cleaned up the oligarchy,” Carole Grimaud Potter describes to us: “Some of its members went to prison, others had to go into exile.

The president even signed a “reciprocal distancing” agreement, based on “respect for the property of the oligarchs, in exchange for their non-interference in political affairs”, details Andrey Kinyakin in his article on the subject.

"Vladimir Putin wanted to impose a verticality of power", adds the professor, also founder of the think tank CREER in Geneva.

Read also "Dictator", "tyrant" ... how Putin became a "pariah" in the eyes of Westerners

For this, he did not really put an end to the oligarchy but simply changed its form, relying on his relatives, whom he installed at the head of the country's big companies.

Whereas before, the oligarchs took advantage of their wealth to influence power, now it is their proximity to the head of state that allows them to increase their fortune.

On some conditions all the same: "Putin rewards the loyalty of his friends, but they must not criticize the state and they must put national interests before their personal interests", explains Carole Grimaud Potter.

"Get rich, yes, but with Putin's blessing," she sums up.

Another major change: in recent years, on the initiative of Vladimir Putin, members of the elite have been investing more in Russia and less abroad.

"A growing share of income from corruption is now invested in the country," says a note from Ifri (French Institute of International Relations).

Where does their fortune come from?

We saw it earlier, originally, the oligarchs owe their fortune to the privatization of the various economic sectors which followed the break-up of the USSR and the end of communism.

Several branches were particularly lucrative: the hydrocarbon and gas industry, the mining and steel industry…, lists Andrey Kinyakin in his works.

People close to Vladimir Putin also made their fortunes in the media and banks.

Who are they ?

Without citing all the members of the oligarchy under Putin, several names stand out.

This is the case of Matthias Warnig, "a friend from the time when Vladimir Putin was in the German Democratic Republic (GDR)", recalls Carole Grimaud Potter.

He is now managing director of Nord Stream.

Arkadi Rotenberg is also part of this Russian elite.

He was “Putin's judo teacher in St. Petersburg.

His fortune is now estimated at 2.5 billion dollars”, further lists the professor of geopolitics.

In this oligarchy, we also find, pell-mell, Yuri Kovaltchouk, “a neighbor, almost a barbecue friend” of Putin, since they both had a second home on the edge of a lake.

Sergei Ivanov, a friend of the KGB, or even Igor Setchine, of the "Petersburg clan" - Putin having worked at the town hall of Saint Petersburg before coming to power.

Do the sanctions against them really have an effect?

If the idea of ​​sanctioning the Russian oligarchs is often mentioned, it is above all to affect, indirectly, Vladimir Putin.

The members of this elite being “considered as the holders of the

slush fund

 ” of the Russian president “and as the guarantors of his financial interests”, describes a note from Ifri.

Read alsoWar in Ukraine: what effects to expect from unprecedented financial sanctions against Moscow?

The problem is that, at the request of Vladimir Putin, "most bureaucrats, heads of public enterprises and businessmen in the service of the federal and regional political elite seek to distend, even to break their links with the West," the Institute further notes.

Sanctions may therefore have less effect.

Not to mention that the loyalty of those close to Vladimir Putin is unfailing.

Even if they are affected by Western sanctions, the oligarchs “will not rebel, they will not abandon” their president and friend, comments Carole Grimaud Potter.

“They have to accept losing billions without saying anything.

It's the pact.

»

Source: leparis

All news articles on 2022-02-28

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