During the war with Ukraine, the number of billionaires in Russia has reached an all-time high. But in the 25 years Vladimir Putin has been in power, Russia has seen a dramatic shift in wealth distribution, with a small group of individuals accumulating vast fortunes while the majority of the population struggles with economic hardship.

According too Forbes,as of early 2024,Russia has 105 billionaires,a significant increase from the 87 recorded just before the full-scale invasion of Ukraine in Febuary 2022.Their combined wealth totals over $566 billion (£447 billion).

This surge in billionaire numbers may seem counterintuitive given the Western sanctions imposed on Russia following the invasion. However, several factors contribute to this phenomenon.

Firstly, the war has created new opportunities for certain businesses. companies involved in supplying the military, import substitution, and benefiting from the departure of Western firms have seen their profits soar.

Secondly, many Russian billionaires have been able to shield their assets from sanctions through complex ownership structures and by transferring wealth to family members or associates. Some have also relocated their businesses and assets to countries that have not imposed sanctions on Russia.

Thirdly, the Russian government has actively supported its wealthiest citizens, providing them with access to lucrative contracts and favourable policies. This has allowed them to consolidate their wealth and power.

Though,the benefits of this wealth accumulation have not trickled down to the wider population. Real incomes in Russia have stagnated or declined in recent years, and poverty rates remain high. According to Rosstat, the state statistics service, around 19.8 million Russians, or 13.5% of the population, were living below the poverty line in 2023.

The concentration of wealth in the hands of a few has also led to growing social inequality and resentment. While the billionaires enjoy lavish lifestyles, many ordinary Russians struggle to afford basic necessities.

The rise of the Russian billionaires is closely linked to the political and economic system that has developed under Vladimir Putin.In the early years of his presidency, Putin consolidated power by cracking down on independent media and political opposition. He also implemented economic reforms that favoured a small group of well-connected individuals.

These individuals, often with backgrounds in the Soviet-era security services, were able to acquire valuable assets at bargain prices during the privatization of state-owned enterprises in the 1990s. They then used their wealth and political connections to build vast business empires.

Over time, this system has become increasingly entrenched, with the billionaires becoming increasingly reliant on the government for their continued success, and the government becoming increasingly reliant on the billionaires for financial support.

the war in Ukraine has further strengthened this relationship, as the government has turned to the billionaires for funding and support. In return, the billionaires have been rewarded with access to new opportunities and protection from sanctions.

The long-term consequences of this wealth concentration are uncertain. Though, it is indeed clear that it is contributing to growing social and economic problems in Russia. It also poses a challenge to Putin’s legitimacy, as it undermines his claim to be a leader who is working for the benefit of all Russians.

From Riches to Ruin: What Happened to Russia’s Oligarchs?

This is a far cry from the way things were before Putin became president.

In the years following the break-up of the Soviet Union, some Russians became fabulously rich by taking ownership of massive enterprises formerly owned by the state, and by exploiting the opportunities of their contry’s nascent capitalism.

Their newly acquired wealth brought them influence and power during a period of political turmoil and they became known as oligarchs.

Russia’s most powerful oligarch, Boris Berezovsky, claimed to have orchestrated Putin’s ascent to presidency in 2000, and years later he appealed for forgiveness for doing so: “I didn’t see the future greedy tyrant and usurper in him, the man who would trample freedom and stop Russia’s development,” he wrote in 2012.

Berezovsky may have exaggerated his role, but Russia’s oligarchs were certainly capable of pulling strings at the highest echelons of power.

A little more than a year after his apology, Berezovsky was found dead in mysterious circumstances in exile in the UK. By that time, Russian oligarchy was well and truly dead, too.

Putin’s Methods of Control

Vladimir Putin maintains power through a consistent pattern of rewarding loyalty and punishing dissent. This strategy extends to both political figures and business leaders within Russia.

To profit, Putin consistently punishes those who have refused to toe the line.Russians remember all too well what happened to oil tycoon Mikhail Khodorkovsky. Once Russia’s richest man, he spent 10 years in jail after launching a pro-democracy organisation in 2001.