International

Oligarchs

Oligarchs

With all that’s been happening surrounding the Russia investigation in the US, the word oligarch has become very popular. It is perhaps important to understand what exactly the term means in the Russian context.
The word Oligarch comes from the Greek word Oligarkhes which is from the words Oligoi (few) and arkhein (to rule). An oligarchy is a form of government where a few at the top control who run everything. It now refers to a small group in Russia that runs the country and the economy under Putin.

Russia is the world’s largest country and is very diverse in its culture and traditions. Less than 50% are Russian. There are many minorities who are also part of the country. In the medieval period, country was run by ‘boyars’ who were warlords. They would convene in Moscow from time to time and discuss issues relating to the nation. They ran fiefdoms independently. This idea has sort of percolated over the years.

There are two distinct periods of Oligarchs in Russia. The first was the Yeltsin period. After the break-up of the Soviet Union, Russia saw the rise of Oligarchs. These were entrepreneurs who were closely connected to the political circles. Most of them are self-made billionaires. They took advantage of the privatization period to get control over firms at very reasonable prices. At one point in time it is believed that seven bankers claimed control over 50% of the Russian economy during the Yeltsin period. Oleg Deripaska is believed to have said that he was born in one country and got wealth in another.

The second period is the Putin period. There has been a marked shift in the way they operate now. In the Putin Period, those who don’t agree with Putin are believed to be forced out. The media reports them to have become mere tools in the hands of Putin. He is believed to seize their wealth and drive them out if they oppose him. He supposedly asserts a substantial degree of authority over them. But this may not be completely true.

Oligarchs aren’t really tools in the hands of Putin. It is an over simplification of the situation and dynamic. There are some that are seen with Putin very frequently and some that aren’t. Russian politics is very complicated. It is true that those who opposed him aren’t active in Russia (of the seven bankers mentioned above, only two remain). Putin does have strong authoritarian tendencies, but must operate within political limits. The Oligarchs are relatively independent and are successful businessmen in their own right. Many have chosen to work closely with the President. But notion that Putin is mastermind may not be true. This view fails to capture the complexity of the political dynamic in the country and denies the existence of politics in the country.

Putin does enjoy a high degree of independence. His popularity has increased after the Crimea incident. He does operate without much constraint. But there are constraints. We must recognize political and economic limits. He needs the support of key people in Moscow and St. Petersburg. He also needs the backing of people who are economically important. There must be a dynamic where he is constantly building coalitions and consensus to achieve objectives. He is acting in a political way rather than the dictatorial manner in which he is portrayed.
The relationship between Putin and the Oligarchs could be viewed as a loose cooperation. While those who are against him will fade away, those close to him have some room to maneuver. The exact dynamic isn’t clear. Many of their actions could be with the prior blessings of the Kremlin. Or they could be acting independently in order to please Putin.

It is important to understand the dynamics among the oligarchs as well. Most of the present ones are self-made and are extremely wealthy, but they rose to power at different time under different conditions. Since it is a relatively small group, Oligarchs tend to know each other. There form cross-relationships where they engage in certain ventures together and work together. But they may also be working against each other at times, depending on the changing circumstances.

All in all, the mainstream conception of an oligarch created by the media maybe very different from the reality. It is important to recognize the political and human element in these equations.

-Contributed by Bhargav Dhakappa

Picture Credits: rbth.com



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