Who are the Russian oligarchs and what is their role?

Since the day Russia invaded Ukraine last Thursday there has been a lot of talk about the oligarchs as they are the hardest hit by Western sanctions and secondly, some of them seem to be creating some sort of disagreement with Putin and the war he has started.

The term “oligarchy” is derived from the Greek and indicates a regime in which government is in the hands of a few people. This was a very widespread form of government in the ancient Greek cities, but even then it was despised by philosophers like Plato and Aristotle, for the fact that it was based on the wealth of individuals and not on special merits or abilities.

However, after the era of Greek cities, oligarchy remained for centuries a largely theoretical form of government, at least in the West, studied purely from an academic point of view, until the end of the last century. It was in post-Soviet Russia that the ideal context was created for the affirmation of a very wealthy elite that would later form the Russian oligarchy.

By the time the Soviet Union disintegrated in 1991, Russian President Boris Yeltsin had accelerated the process of opening up to Western capitalism, which had been carefully initiated by the last Soviet leader, Mikhail Gorbachev, but creating serious imbalances. Yeltsin was funded by a group of young businessmen who were able to take advantage of the political and economic situation and, when the Russian government decided to privatize large public companies, some of these businessmen were able to buy them. those at a low price.

In short, after the dissolution of the Soviet regime, some people became extremely rich in a very short time, who multiplied their businesses from energy to sports, then moving to the metallurgy and media sectors. But in the last two decades, the oligarchy has transformed with Putin’s empowerment. In the beginning, since the oligarchs had a very bad reputation in Russia for how they got rich, Putin publicly positioned himself against them.

However, he then did nothing to change the power relations, merely replacing the old oligarchs with other, more trusted ones and excluding from any economic advantage those who opposed him. Many of Putin’s former colleagues, for example, joined the new oligarchy when he was a member of the KGB.

An interdependent relationship has been established between Putin and the new oligarchs, who officially do not belong to the government or other public institutions, because, as former Russian Prime Minister Mikhail Kasyanov stated in 2014 in an interview with the New York Times, “they depend from him and he depends on them. On the one hand, the oligarchs guarantee Putin stability and loyalty, on the other hand, Putin allows them to expand their businesses and properties.

This is a report that Putin himself admitted in an interview with the Financial Times, in which he said that the oligarchs are “those who use their connections with state authorities to create huge economic profits.” After all, even Putin, who has been in power for over twenty years, managed to get very rich.

Despite their interdependent relationship, it seems that the oligarchy is not compact in its support, as far as the occupation of Ukraine is concerned. In fact, the wealth of the oligarchs is located mainly outside Russia, so because of the sanctions imposed by the West, they are the first to suffer the consequences. And that is why they are expressing opposition to Putin’s policy regarding Ukraine.

For example, Oleg Deripaska, who is one of the largest industrial groups in Russia, published a post on the social network Telegram, according to which he hoped for a peace agreement that could be reached “as soon as possible.” He then made another statement indirectly criticizing the economic management of the Putin government, stressing that “economic policy needs to change and all this state capitalism must end.”

According to the Reuters news agency, another oligarch, Mikhail Fridman, wrote a letter to his staff, describing the war in Ukraine as “a crisis that will cost many lives, damaging two neighboring countries for hundreds of years.”

Even some moves by oligarch Roman Abramovich have also been interpreted as signs of concern over the war and Western-imposed sanctions. Over the weekend, Abramovich announced he would leave the administration of English football club Chelsea, but not from his ownership.

In his statement to the media there was no detail about the situation in Ukraine, but according to a spokesman, Abramovich had traveled to Belarus to attend the meeting of two delegations that would discuss the establishment of peace in the midst of the conflict.

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