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How Russia’s wealthy made $800 billion and why it matters

·2-min read
The superyacht belonging to billionaire Roman Abramovich from Russia in Turkey.
Wealthy Russians are known for spending their money on superyachts, mansions and even football teams. (Source: Getty)

One way Western leaders are trying to deter a full-on invasion of Ukraine is to go after Russia’s wealthy elite.

US President Joe Biden and UK Prime Minister Boris Johnson have announced sanctions on rich individuals with ties to the Kremlin, noting that they are vulnerable to frozen assets and travel bans because they have so much money tied up in the West.

So why double down on these wealthy Russians? And how rich are they exactly?

They are eye-wateringly rich

According to Forbes 2021 Billionaire List, Russia’s billionaires are worth a collective $808.06 billion (US $584 billion).

With 117 in total, Russia has the fifth-most billionaires in the world.

And, like a lot of wealthy people around the globe, many Russian billionaires got richer during the pandemic.

How did they get so wealthy?

Many of these rich businessmen made truckloads of money when the Soviet Union collapsed in the late 1980s and early 1990s.

Known as the Russian oligarchs, these individuals became ultra-wealthy when state companies were privatised as part of the transition to capitalism.

During this chaotic period, then-president Boris Yeltsin sold some state-owned companies in oil, gas, media and more to raise some cash.

A few enterprising types snagged these companies for rock-bottom prices. This period is known as “grabification” by some Russians.

When order returned to the Russian economy, these lucky few were set up to become monstrously rich.

Why they are being targeted

The UK government has slapped sanctions on three high-net-worth Russians because he said they are “very close to the Putin regime”. These three are Gennady Timchenko, Boris Rotenberg and Igor Rotenberg.

They are banned from the country, their assets have been frozen and they cannot do business with UK companies.

Johnson has also taken aim at five Russian banks: Rossiya Bank, IS Bank, General Bank, Promsvyazbank and Black Sea Bank.

As well as targeting oligarchs, the US government has also placed sanctions on the VEB bank and Russia's military bank, which does defence deals.

This will freeze the banks’ US assets, ban Americans from doing business with them, cut them off from the global financial system and eliminate their access to the dollar.

Biden said the country was also working with Germany to stop the Nord Stream 2 pipeline from Russia to Germany from progressing.

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