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Russia has the highest current wealth gap of any country in the world, and the richest of their ultra-rich are growing faster than any crime family.
By Jack Doyle
Alisher Usmanov is everything that Tinker, Tailor, Soldier, Spy and Vladimir Putin would lead you to believe about Russia’s richest man. He owns a $300 million helipad-equipped yacht, has served jail time for corruption, is sentimental only about the Bolshoi ballet and keeps his mysterious past quiet — apart from his suitably badass Russian international fencing career, of course.
Usmanov is just one of a cast of eccentric, important and often shady characters driving a striking phenomenon in the realms of the super-rich: Russia is suddenly bursting at the seams with billionaires. A staggering 35 percent of the nation’s wealth (that’s $420 billion) is currently controlled by just 110 people. Worldwide that figure is 1 to 2 percent. Moscow may not draw in nearly as many tourists as New York, but the oligarch capital of the world has 78 billionaires, compared to 57 in the Big Apple, according to Forbes. In 2000, Russia had only eight billionaires.
8: Billionaires in Moscow, 2000
78: Billionaires in Moscow, 2013
57: Billionaires in New York City, 2013
110: People who control 35 percent of Russia’s wealth
Is this billionaire boom just a continuation of the stereotypically corrupt, Mafia-mustached, steely-eyed Russian business guru’s hold on power and politics? Some Russian oligarchs may indeed be living the unchecked high life, as evidenced by a pair of billionaires who rang up a $200,000 bill in three hours at a London club last month. However, a recent Forbes list of the world’s richest suggests that this kind of Russian wealth is a post-Berlin Wall phenomenon. People who made their fortunes in the ’90s are now considered old fogeys in the billionaire bubble: Many of Russia’s billionaires are newly minted.
What’s the secret to this rapid Russian success? Unlike big-name American billionaires like Bill Gates, these ultra-rich opportunists often do not have the advantage of running off decades of profits from established companies. Rather, Russian elites have cleverly capitalized on the sudden onset of capitalism. The collapse of the Soviet Union set off a mad scramble to privatize massive industries and Russia’s natural gas and mineral resources — and those with former Soviet government and KGB connections often got first dibs.
From Russia with Love
Estimated wealth of Alisher Usmanov, Russia’s richest person.
Estimated cost of 2014 Sochi Winter Olympics. President Vladimir Putin has reportedly encouraged Russian billionaires to bankroll the games.
Approximate value of auctioned artwork Usamov donated to the Russian government.
When the USSR fell in 1991, Alisher Usmanov leapt into the iron, natural gas, steel and gold industries. But like many of his fellow Russian Forbes A-listers, he keeps up with the times — and now that the Iron Curtain is drawn, he and other Russian business leaders are free to chase up the hottest investments abroad as well. Usmanov is one of the best informed people about the latest Silicon Valley developments (he sold his Facebook shares in 2012 and collected a tidy $1.3 billion for his foresight), keeps massive property holdings around the world and is a leading shareholder in London’s Arsenal Football Club.
Russia has the highest level of wealth inequality in the world.
This year, a comprehensive global wealth report by Credit Suisse showed that Russia has the highest level of wealth inequality in the world. Capitalism may be treating 110 people exorbitantly well, but a short drive beyond the Ferraris, Maseratis and Bentleys that dot curbs in central Moscow and St. Petersburg will reveal scenes of poverty that might have inspired Bolshevik revolutionaries a hundred years ago.
Many billionaires are protected by personal connections to the state, as evidenced by Usmanov donating nearly $33 million worth of auctioned-off artwork to the government. Given Russia’s notoriety for doing away with outspoken journalists, protestors and political figures, it is difficult to speak out against a complex, isolated group that has learned to balance politics, money and international connections to its advantage.
In the ’80s, Alisher Usmanov spent six years in jail for extortion. The experience, he said, taught him “to be a man.” In 2013, he is learning how to be more than that as he climbs to unprecedented levels of wealth — and shakes up Russia’s economy with his turn on the ladder.
- Jack Doyle, OZY AuthorContact Jack Doyle