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The Attack on the Oligarchs |
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after his
election as president in May 2000 Putin moved quickly to consolidate his
political authority
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his first
decisive step being to wrest control of the broadcast media from the
oligarchs
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at the same
time he assured corporate leaders that he would not interfere with their
business activities, so long as they stayed out of politics
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Putin
maintained this ‘equidistance’ approach until 2003, when
many
business leaders became heavily involved in the preparations for the
December 2003 State Duma elections
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it is
estimated that 20% of the candidates were directly linked to business
corporations
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the most
politically active firm was Yukos, Russia’s largest oil company, which was
headed by Mikhail Khodorkovsky
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it also
seemed to be preparing itself for sale to a Western buyer (thought to be
Chevron)
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in October
2003 Khodorkovsky, the richest man in Russia with an estimated net worth of
$16 billion, was jailed on charges of tax evasion
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he was
eventually sentenced to eight years in prison.
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Yukos was
forced into bankruptcy through exaggerated claims for tax arrears, and its
prize assets were sold off in a rigged auction to the state-owned Rosneft
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oligarchic
capitalism proved highly unstable, since the economic fate of the individual
oligarchs was too closely tied to the course of state policy
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The Shift to State Corporatism (State–Oligarchic Capitalism) |
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the oligarchs as a class have not disappeared
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they have increased in number and seen their wealth multiply
under Putin’s rule
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the oligarchs benefited from Russia’s booming economy, its
soaring stock market, and successful stock offerings to domestic
and foreign investors
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Forbes magazine reported that there were 33 individuals in
Russia in 2006 with personal assets above $1 billion, the third
highest number of billionaires in the world
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their ranks had risen to 87 by 2008, putting Russia in second
place after the US
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Forbes estimated their combined assets doubled from $90 billion
in 2005 to $172 billion in 2006, and more than doubled again to
$455 billion by 2008
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the state recaptured the commanding heights of the economy
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this has been most pronounced in the all-important oil sector
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the state raised its holding in key companies
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the state’s total shareholding portfolio was estimated to have a
market value of $469 billion in 2007, equal to 40% of the
capitalisation of Russia’s stock market
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government oversight of the companies is achieved through the
placement of currently serving members of the executive branch
on corporate boards, in some cases as chairmen
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many of these are drawn from Putin’s own retinue
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the increasing fusion of state and oligarchic power
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"Private" and "State" Oligarchs |
The core of the Russian
economic elite, that had emerged in the 1990s, has survived and
prospered under Putin. This group of tycoons can be called
"private" oligarchs:
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V.
Alekperov, V. Bogdanov (oil industry)
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A. Mordashov,
V. Lisin (iron and steel industry)
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M. Prokhorov,
V. Potanin, O. Deripaska, I. Makhmudov (non-ferrous metals)
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V. Yevtushenkov
(telecommunications)
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M. Freedman, V.
Vekselberg, R. Abramovich (investors with diverse portfolios; in
the 1990s Abramovich started his rise as an oligarch in the oil
industry)
In contrast to this group, the
tycoons that emerged during the economic boom under Putin can be
described as "state" oligarchs. They can be further divided
into:
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State-Related Tycoons |
State Crisis Managers |
Managers of successful holding
companies and banks, in which the state has a significant or controlling
interest:
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A. Miller (Gazprom)
- V. Yakunin
(Russian Railways)
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N. Tokarev (Transneft)
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Sh. Takhautdinov (Tatneft)
- S. Bogdanchikov (Rosneft)
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G. Gref (Sberbank)
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State-appointed crisis managers, presiding over state corporations:
- S. Kirienko (Rosatom)
- S. Chemezov (Rostekhnologii)
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State vs. Private Sectors |
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The influence and
weight of state-related oligarchs have grown under Putin. Yet, all the
talk about the expansion of the state's control over the economy and the
rise of state capitalism notwithstanding, the state sector has not
displaced the private one as the core of the Russian economy.
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In the 2000s,
renationalisation has been significant: YUKOS, Sibneft (now Gaspromneft),
all helicopter building plants, etc. But at the same time privatisation has
also proceeded apace, including electricity generating companies, the
completion of the privatisation of the iron and steel industry, coal mining
companies, etc.
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As a result, the
overall weight of the state sector in the economy has not changed
significantly compared to the late 1990s.
Copyrighted material
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