Reds to riches! A third of Russia’s wealth is held by 110 billionaires
LEVELS of inequality have reached unprecedented heights in Russia, with more than a third of its wealth concentrated in the hands of just 110 super-rich people, says a new report.
Credit Suisse investment bank says wealth has been massively concentrated in the hands of powerful ‘ oligarchs’ – among them wellknown football tycoons Roman Abramovich, the owner of Chelsea, and Alisher Usmanov, a major shareholder at Arsenal.
And they nearly all owe their wealth to President Vladimir Putin, who has allowed trusted businessmen to gain exclusive rights to the nation’s vast natural reserves.
In Soviet times, the Communist credo was that everyone was equal – though the reality was different – but now the contrast could hardly be starker. Russia
‘Highest level of wealth inequality’
has a population of 143.5 million generating total household wealth of £750billion, but £263billion of that is owned by just 110 people.
‘Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires,’ said Credit Suisse.
Its report said the discrepancy was a ‘parody’ of the hopes for a prosperous egalitarian society that some held for Russia following the Soviet Union’s collapse.
And the gulf is expected to grow. Russia currently has 84,000 dollar millionaires, a figure forecast to rise to 133,000 by 2018 – a faster rate than Europe or America.
Most of the ‘Reds-to-Riches’ dollar billionaires made their fortunes by buying up highly prized state assets of the old USSR, or through securing lucrative contracts awarded by the Kremlin for which businessmen commanding the economy, a high oil price and Europe’s need for energy aided him in stoking a remarkable recovery.
Mr Abramovich is seen by many as the figurehead of this Russian elite, many of whom have London bases and are synonymous with trophy wives, palatial homes, fleets the closest political connections are deemed necessary.
After a decade of chaos under Boris Yeltsin in the Nineties, Mr Putin set about tapping Russia’s vast natural wealth in order to rebuild a country battered by the transition from Communism to rampant capitalism. With loyal of luxury cars and ocean-going armadas. But the Chelsea owner ranks only 13th in Credit Suisse’s analysis, which is based on the latest Forbes list for Russia.
It is headed by mining magnate Mr Usmanov, who is said to be worth £11billion and owns Sutton Place in Surrey, a Tudor mansion once the home of J Paul Getty. Number nine on the list is Gennady Timchenko, who is seen as a personal friend of Putin.
The enormous influence of the president is also demonstrated in the fortunes of those who have fallen out of favour.
Manufacturing and banking mogul Boris Berezovsky was thought to have been the first post- Soviet billionaire and Mr Putin’s ‘kingmaker’, but they fell out and he moved into exile in London. He died in March after apparently taking his own life at his ex-wife’s home in Ascot, his wealth having fallen substantially.
Another early billionaire, Mikhail Khodorkovsky, lost the bulk of his fortune after he was jailed on ‘political’ grounds after financing opposition parties in Russia.
Russia now has one billionaire for every £ 6.9billion i n household wealth. In the rest of the world, there is one for every £107billion.
‘The situation in Russia has no parallel’ says Anthony Shorrocks of Global Economic Perspectives, an author of the report.
‘If you look at how Russians have made their money and the sort of political ties that seem to be necessary to maintain it, there are just very few places where the situation is similar.’