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Boris Yel’tsin’s radical liberalisation in 1992 led not to a
competitive market economy, but to oligarchic capitalism
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It
thrived on Russia’s insider privatisation,
allowing a handful of politically well-connected tycoons to
manipulate the post-Soviet sell-off of state assets to their
personal advantage |
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Instead
of dispersing ownership throughout the society, the result was a
remarkable degree of concentration of ownership in the new private
sector
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Their monopoly played a critical role in
preventing the emergence of a working free market and in
discouraging foreign investment in Russia |
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By 2001 the country’s 23 largest firms
were estimated to account for 30% of Russia’s GDP, and these firms
were effectively controlled by a mere 37 individuals
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By international standards, this is an
astonishing concentration of wealth and industrial power in such a
large country. The
oligarchs were able to control the lion’s share of the
national economy |
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It was all the more surprising given the
fact that private ownership had been outlawed for decades, and the
entire economic elite did not exist as a class just 15 years earlier
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Their dominance, especially over banking and the extraction of raw
materials for export, had cost the state immense revenues |
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The rise of the oligarchs coincided with a
wave of lawlessness, contract killings and grotesque displays of
wealth
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Putin faced the task of attacking the entrenched
interests of semi-criminal financial and industrial magnates, the
so-called oligarchs and dismantling the
system of “robber capitalism” |
