Business oligarch

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Business oligarch is a synonym of "business magnate". The inclusion of the word oligarch describes the significant influence such wealthy people may have on the life of a state. The term came into wide circulation after the collapse of the Soviet Union in application to the people that became extremely wealthy in some post-Soviet republics.

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[edit] Russia

A number of prominent oligarchs, including Mikhail Khodorkovsky (far right), pictured with Boris Yeltsin in the mid-1990s
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A number of prominent oligarchs, including Mikhail Khodorkovsky (far right), pictured with Boris Yeltsin in the mid-1990s

The Russian oligarchs are business entrepreneurs who started under Gorbachev during his period of market liberalization. Rare goods, such as PCs, and jeans, were smuggled into the country and sold on the black market for a hefty profit, an unforeseen consequence of partial market liberalization with still excessive trade restrictions. In the 1990s, the oligarchs emerged as well connected entrepreneurs who started from nearly nothing and got rich through participation in the market via connections to the corrupt, but democratically elected, government of Russia during the state's transition to capitalism.

Post-Soviet business oligarchs are relatives or close associates of government officials or even government officials themselves who achieved vast wealth by acquiring state assets very cheaply (or for free) during the privatization process controlled by the Yeltsin government. Specific accusations of corruption are often levelled at Anatoly Chubais and Yegor Gaidar, two of the 'Young Reformers' chiefly responsible for 'shock therapy' privatization in the early 1990's. According to David Satter, author of Darkness at Dawn, "what drove the process was not the determination to create a system based on universal values but rather the will to introduce a system of private ownership, which, in the absence of law, opened the way for the criminal pursuit of money and power."

Although the majority of oligarchs were not formally related with the communist party of the Soviet Union, there are allegations that they were promoted (at least initially) by the communist apparatchiks, with strong connections to power structures to the bolshevik regime and access to the monetary funds of the communist party. In official media, oligarchs are usually pictured as the enemies of "communist forces". The latter is a stereotype that describes political power that wants to restore Soviet-style communism in Russia.

During Yeltsin's presidency, oligarchs became increasingly influential in politics and played a significant role in financing the re-election of Yeltsin in 1996. With the insider information about financial decisions of the government, oligarchs could easily increase their wealth even further. The 1998 Russian financial crisis hit some of the oligarchs hard, however, and those whose holdings were based on banking lost much of their fortunes. In the Putin era, the remaining oligarchs have come under fire for various alleged and real illegal activities, particularly the tax evasion in the businesses they acquired. Vladimir Gusinsky (MediaMost) and Boris Berezovsky both escaped justice by running out of Russia, and the most prominent, Mikhail Khodorkovsky (Yukos oil), was arrested in October 2003, and sentenced to 8 years, and (as of August 2006) is in jail, with his company trying desperately to protect itself from being further investigated and punished.

Their defenders (often associated with Chubais's party—the Union of Right Forces) argue the companies they acquired were not highly valued at the time because they were still run on Soviet principles, with non-existent stock controls, huge payrolls, no financial reporting and scant regard for profit. They turned the businesses—often vast—around and made them deliver value for shareholders. They obtain little sympathy from the Russian public, though, due to resentment over the economic disparity they represent.

In 2004, Russian Forbes listed 36 billionaires of Russian citizenship, with an interesting note: "this list includes businessmen of Russian citizenship who acquired the major share of their wealth privately, while not holding a governmental position". In 2005, the number of billionaires dropped to 30, mostly because of the Yukos case, with Khodorkovsky dropping from #1 ($15.2 bln) to #21 ($2.0 bln).

[edit] Russian oligarchs

From Russian Forbes, May 2005. Wealth in 1,000,000,000 USD.

  1. Roman Abramovich 18.2 (Роман Абрамович, Sold Sibneft Oil)
  2. Vladimir Lisin 7.0 (Владимир Лисин, Novolipetsk Steel)
  3. Viktor Vekselberg 6.1 (Виктор Вексельберг, petroleum, colour metals)
  4. Oleg Deripaska 5.8 (Олег Дерипаска, Rusal aluminium)
  5. Mikhail Fridman 5.8 (Alfa Group)
  6. Vladimir Yevtushenkov 5.1 (Владимир Евтушенков, Sistema telecommunications, finance, real estate)
  7. Alexei Mordashov 5.1 (Алексей Мордашов, black metallurgy)
  8. Vladimir Potanin 4.7 (Владимир Потанин, Norilsk nickel)
  9. Mikhail Prokhorov 4.7 (Михаил Прохоров, Norilsk nickel)
  10. Vagit Alekperov 4.1 (Вагит Алекперов, LUKoil petroleum)
  11. Viktor Rashnikov 3.6 (Виктор Рашников, black metallurgy)
  12. German Khan 3.5 (Герман Хан, petroleum, finances, telecom)
  13. Boris Ivanishvili 3.0 (Борис Иванишвили, metellurgy, finances)
  14. Alexander Abramov 2.9 (Александр Абрамов, Evraz Group steel)
  15. Aleksei Kuzmichev 2.7 (Алексей Кузьмичев, petroleum, finances, telecom)
  16. Suleiman Kerimov 2.6 (Сулейман Керимов, investor)
  17. Vladimir Bogdanov 2.3 (Владимир Богданов, petroleum (Surgutneftegaz))
  18. Iskander Makhmudov 2.2 (Искандер Махмудов, colour metals)
  19. Nickolay Tsvetkov 2.2 (Николай Цветков, petroleum, finances)
  20. Alisher Usmanov 2.0 (Алишер Усманов, black metallurgy)
  21. Mikhail Khodorkovsky 2.0 (Михаил Ходорковский, Yukos petroleum)

[edit] Other notable oligarchs

[edit] References

  • David E. Hoffman: The Oligarchs: Wealth and Power in the New Russia, PublicAffairs, 2003, ISBN 1-58648-202-5

[edit] Ukrainian oligarchs

[edit] See also


[edit] External links

  • "The Oligarchs" - former Knesset Member Uri Avnery on how Berezovsky et. al. amassed their wealth
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