http://www.businessinsider.com/what-is-a-russian-oligarch-2013-3
Modern Russia is infamous for being home to a slew of billionaire oligarchs, the majority of whom earned their wealth in the 1990s after the fall of the Soviet Union. This article details some of the recent history behind this small group of Russian businessmen. In the 1990s, the government implemented a program called 'loans for shares.' Companies provided loans to the Russian government in exchange for shares in state-owned firms. When the government defaulted on its debts, these companies kept their shares and were able to acquire many state-owned enterprises for incredibly cheap prices as the nation underwent massive privatization. One of Russia's most high-profile oligarchs, Boris Berezovsky, committed suicide this past week and much of his death has been centered around his dealings with fellow oligarchs.
It's pretty intriguing as to how certain people were able to take advantage of the swift and turbulent transition from a communist economy to market economy. In the ensuing chaos of the 1990s, traditional economic forces were replaced by sneaky financial transactions. Such a situation is unlikely to happen again in the near future. The Russian oligarchs were really in the right place at the right time.
2 comments:
Very interesting article. It appears to me that these select few individuals simply capitalized on a calamitous moment in order to garner extreme economic profits. It is interesting to see how these oligarchs have used their riches in recent time. Many have invested in soccer teams in Russia and abroad. Chelsea FC, one of the riches clubs in the world, is currently owned by a Russian oil tycoon named Roman Abramovich. It will be interesting to gauge the long-run effect these oligarchs have on Russia's economy.
Anthony I would have to agree with you that these oligarchs were at the right place at the right time but also like Austin said they capitalized when the time was right. I believe that if all companies had the opportunity to provide loans to the government then it would make sense that there would be even more billionaires but it seems to be that some of these businessman made better decisions than others.
Post a Comment