While ”oligarchs” from the era of former president Boris Yeltsin have been purged by the Kremlin, a new breed of super-rich tycoons has thrived under Vladimir Putin, bringing the number of dollar billionaires in the country to more than 100. Russia now has the most billionaires in the world after the United States, which has 415. Germany is third, with 60.
According to an annual survey published by Russia’s respected Finans magazine, the metals tycoon Oleg Deripaska (40), a mild-mannered physics graduate, has shot to the top as the country’s wealthiest man. With assets estimated at $40-billion, he is worth almost twice as much as Roman Abramovich (41), the Chelsea Football Club owner, who is second, with $23-billion.
The survey found that the number of Russian billionaires had soared to 101, compared with 61 last year. Russian companies sold a record $33-billion in shares last year, while bountiful reserves of oil, gas and coal and soaring commodity prices have brought money pouring into the coffers.
Many tycoons live in the wealthy ghetto of Rublyovskoye Shosse, near Putin’s dacha on the edge of Moscow, where Lamborghini showrooms jostle alongside Gucci boutiques. Plastic surgery is a huge growth industry, while elite restaurants and nightspots are booming. The capital’s über-wealthy set were shocked this month when their favourite club, Dyagilev, burned down. Tables costing up to £7 500 a night had ensured privacy away from the prying eyes of ordinary Russians, who earn less than $600 a month on average.
While there have been fears that Putin’s departure from the presidency this year would provoke a fresh carve-up of assets, the Finans survey seems to suggest that the party is far from over. Analysts say the big hitters in business are diversifying from traditional money-spinners such as the extraction industries and cashing in on new growth areas, such as car manufacture and retail, as ordinary Russians’ spending power takes off.
Deripaska topped the Russian rich list for the first time last year with $21,2-billion, just pipping Abramovich, but rejected the figures in an interview with The Guardian shortly afterwards, saying he knew ”a dozen people who should be above me”.
A spokesperson for the businessman, who is seen as loyal to the Kremlin, cast doubt on the new figures. ”We don’t understand their method of evaluating the data,” he told The Guardian. ”They didn’t talk to us about it. It’s very different from what we estimate, which is about $20-billion.”
However, Finans insisted that Deripaska’s lead as richest man was unquestionable and ”for a long time”. He was the ”most active entrepreneur in Russia”, while his Basic Element holding company, which controls the aluminium giant Rusal, had expanded rapidly after a series of new acquisitions abroad, including stakes in General Motors, Magna International, the Canadian auto parts group, and Hochtief and Strabag, the German and Austrian construction groups.
By contrast, joked the Moskovsky Komsomolets newspaper, Abramovich had increased his worth since last year by ”a mere $2-billion” because he was distracted by football. ”Looks like all these Chelseas and other hobbies don’t do any good for business,” it commented.
The survey confirms the dominance of a tier of tycoons who have developed friendly relations with the Kremlin by agreeing to Putin’s ultimatum to stay out of politics.
Deripaska has poured hundreds of millions of dollars into a sports complex near Sochi, the Black Sea town where the 2014 winter Olympics will be held, while Abramovich has funded a new training camp for the Russian football team. Viktor Vekselberg (ninth richest, with $15,5-billion) is famous for buying a clutch of Fabergé eggs worth about $100-million to ensure they stayed in Russia. And Arsenal Football Club shareholder Alisher Usmanov (12th, with $13,3-billion) splashed out $40-million last September to buy the art collection of the late cellist Mstislav Rostropovich for a state museum.
By comparison, the self-exiled London resident Boris Berezovsky, the ultimate Yeltsin-oligarch, who had immense political clout in the late 1990s until he fell out with Putin and fled to the United Kingdom, has seen his assets dwindle. He came in at 80th on the list with $1,3-billion. Mikhail Khodorkovsky, who was jailed and stripped of the leading oil company Yukos after clashing with the Kremlin and being convicted on fraud charges in 2005, did not even figure in the list of Russia’s 500 richest people.
Despite their philanthropy, the new tycoons are not popular figures. While Russia’s economic boom has begun to trickle down to an embryonic middle class, social inequality has risen as the super-rich accelerate away. The country’s richest 500 people are today worth $715-billion; more than half of Russia’s GDP, while some pensioners get less than $120 a month.
One figure notably absent from the rich list was Putin. In recent press interviews, the Moscow-based political analyst Stanislav Belkovsky speculated that Putin had a personal fortune of $40-billion. Belkovsky said Putin had secretly acquired vast holdings in three Russian oil and gas companies. Putin dismissed the reports during his annual press conference last week as ”detritus excavated from someone’s nostril and smeared across bits of paper”. — Â