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. In particular, the term Russian oligarch describes Russian businessmen who came to prominence during the presidency of Boris Yeltsin.

Contents

1 Russia

1.1 Russian oligarchs

1.1.1 Other notable oligarchs

1.2 References

2 Ukrainian oligarchs
3 See also

Russia

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

According to a widespread stereotype, the oligarchs are business entrepreneurs who started under Gorbachev during his period of market liberalization. Under market liberalization, many smuggled rare goods into the country, such as PCs, and jeans, for a hefty profit margin, an unforeseen consequence of partial market liberalization with still excessive trade restrictions, and the willingness of some, less savory characters, to smuggle goods into the country and sell them on the black market. The stereotype of a Russian oligarch is a lucky entrepreneur who started from nearly nothing and got rich through participation in the free market during the transition to capitalism.

In actuality, 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 levied on 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 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 underpayment of taxes in the businesses they acquired. Vladimir Gusinsky (MediaMost) and Boris Berezovsky were both effectively exiled, and the most prominent, Mikhail Khodorkovsky (Yukos oil), was arrested in October 2003, sentenced to 8 years, and (as of 7/05) is in jail, with his company trying desperately to protect itself from being dismantled.

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 (aggravated by the fact that the original six out of seven oligarchs are of Jewish descent).

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).

Russian oligarchs

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

Roman Abramovich 14.7 (Роман Абрамович, Sold Sibneft Oil)
Vladimir Lisin 7.0 (Владимир Лисин, metallurgy)
Viktor Vekselberg 6.1 (Виктор Вексельберг, petroleum, color metals)
Oleg Deripaska 5.8 (Олег Дерипаска, Russian Aluminium)
Mikhail Fridman 5.8 (Alfa Group)
Vladimir Evtushenkov 5.1 (Владимир Евтушенков, telecommunications, finance, real estate)
Aleksey Mordashov 5.1 (Алексей Мордашов, black metallurgy)
Vladimir Potanin 4.7 (Владимир Потанин, Norilsk Nickel).
Mikhail Prokhorov 4.7 (Михаил Прохоров, color metals)
Vagit Alekperov 4.1 (Вагит Алекперов, petroleum (LUKoil))
Viktor Rashnikov 3.6 (Виктор Рашников, black metallurgy)
German Khan 3.5 (Герман Хан, petroleum, finances, telecom)
Boris Ivanishvili 3.0 (Борис Иванишвили, metellurgy, finances)
Alexander Abramov 2.9 (Александр Абрамов, black metallurgy)
Aleksei Kuzmichev 2.7 (Алексей Кузьмичев, petroleum, finances, telecom)
Suleiman Kerimov 2.6 (Сулейман Керимов, investor)
Vladimir Bogdanov 2.3 (Владимир Богданов, petroleum (Surgutneftegaz))
Iskander Makhmudov 2.2 (Искандер Махмудов, color metals)
Nickolay Tsvetkov 2.2 (Николай Цветков, petroleum, finances)
Alisher Usmanov 2.0 (Алишер Усманов, black metallurgy)
Mikhail Khodorkovsky 2.0 (Михаил Ходорковский, Yukos oil)

Other notable oligarchs

Rustam Tariko 1.9, Russian Standard vodka and banking
Boris Berezovsky 0.73 (Борис Березовский)
Vladimir Gusinsky 0.35 (Владимир Гусинский, MediaMost)
Anatoly Chubais (Анатолий Чубайс, Unified Energy System)

References

David E. Hoffman: The Oligarchs: Wealth and Power in the New Russia, PublicAffairs, 2003, ISBN 1586482025

Ukrainian oligarchs