Russian Sanctions strengthen Putin’s relationship with oligarchs

  • Russian’s wealthiest have always had close connections to the Kremlin, but US sanctions are pushing them even closer together.

    Following the dissolution of the Soviet Union in the 1990s, there was mass privatisation of state assets. This allowed individuals the opportunity to make millions, in some cases billions, of dollars through the acquisition of state property. And so the notorious Russian “oligarchs” were born.

    Putin demands Russia’s richest stay in line and support his government, or risk losing their wealth. Failure to do so and they could also find themselves subject to criminal accusations. Many dissidents have been forced into exile, some even fearing for their lives.

    In April the Trump administration sanctioned some of Russia’s oligarchs and the companies they own or control stating “The Russian government operates for the disproportionate benefit of oligarchs and government elites…Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.”

    Sanctions on the oligarchs and restrictive measures on financial institutions and investors funding Russian projects are forcing Putin and the oligarchs to form an even stronger alliance. Bloomberg reported Russia’s richest and their companies have already lost billions of dollars due to the Trump administration sanctions. It is therefore no surprise the oligarchs are moving their internationally-held assets back to Russia to avoid further losses and asset freezes. The Russian Government is now planning a five-year $100 billion infrastructure project for which the support of Russian’s richest and their companies will be instrumental.

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  • The oligarchs might be scared but Putin isn’t wavering. He ensures his own wealth is protected