Moscow News
http://www.mnweekly.ru/
February 21, 2008
The Land of Bears and Billionaires
By Marina Pustilnik
Vladimir Putin's Russia may go down in history annals one day as the breeding ground for billionaires. Even though a number of oligarchs from the pre-Putin days have been expelled by the Kremlin to other breeding grounds, some or all of their wealth taken away, a new crop of super-wealthy has come up. It is not even the numbers of these billionaires that seem stounding, although they are.
It is the rate at which they seem to be acquiring their wealth. One of Russia's finance magazines, aptly named Finance, has recently made a name for itself by publishing ratings of the country's billionaires. The latest report says Russia now has 101 billionaires (whose fortune is dollar-denominated), second only to the United States, which has 415 of them. The number of super-rich has soared by 40 in just one year. The majority of these billionaires seem to have come upon their wealth in the course of our record-breaking IPO spree. In 2007 Russian companies sold $33 billion in shares during placement of their shares, mostly on international markets. Few, it seems, have used this money to reinvest in production.
The magazine has named Oleg Deripaska, the 40-year-old oligarch with close ties to the Kremlin who owns aluminium giant Rusal, as number one of the list, valuing his personal fortune at $40 billion, almost twice as much as that of his closest competitor Roman Abramovich, with $23 billion. Although Deripaska's spokesman denied the figure in an interview with the British newspaper The Guardian, saying that the businessman's own estimates point to a figure of about $20 billion, the figure seems a more or less safe bet, considering the size of Deripaska's empire.
According to various estimates, Russia's 500 richest people are currently worth $715 billion, which is about half of the country's total GDP.
Both the Western press and Russian opposition are always quick to point out that this abundant wealth lives side by side with pensioners who receive a meager pension of $100 a month. This brings the Western journalists to come to obvious conclusions that the overwhelming majority of Russians hate the "oligarchs," while the Russian opposition uses it as a call to arms for the redistribution of wealth.
Such a view, however, seems too simplistic to me. Yes, the majority of this wealth has been acquired by means which are far from commendable. Yes, a lot of wealth that has been acquired during the Putin years was a result of especially good relations with authorities and a promise to stay out of politics. Yes, Russia's rich often live their lives like there is no tomorrow, with lavish displays of wealth that border on distasteful. Yes, the wealthy should give more to the country and the people, through philanthropy, for example.
But philanthropy is a very slippery slope. It does not make enough people happy, unless you give away all of your wealth in equal parts, and even that won't satisfy people, because they will each receive too little. It also sets a dangerous precedent of giving away money just because you have some and others do not.
Yes, Russian oligarchs have often become wealthy because they knew the right people in the right place at the right time. But it is also difficult to argue against the fact that they are often willing to take more risks and spend all of their waking hours on the job. What I would like is for Russian oligarchs to give back to the people in ways other than charity. Russia's uber-rich have milked the country sufficiently of its natural resources, amassing fortunes. It would be nice if they gave back to the country now - by investing beyond the extraction industries.
More jobs for the people - now, that's a right kind of philanthropy. If this ever takes place - on a grand scale - may be the Western press will finally stop comparing our rich compatriots with bears of extreme wealth and start treating them like regular billionaires.