Thread: Russian Oligarchs

My question does not aim the acquisition of historical knowledge. My question is seeking answer to one of the most popular questions in human history: How to get extremely rich quickly?
I agree that with the word rich I don't distinguish between billionaires, millionaires and simple wealthy. I meant extremely rich people (50 millions of wealth and above)
Through my job as a Financial Advisor with specialization in Russians I tried many times to answer one of the most important questions:
These oligarchs have been already rich and before the collapse of the Soviet Union?
Did rich Russians existed and before 1989?
We all say that Russians before 1989 were leaving under a communistic regime, were the existence of private property was prohibited?
Is this true? Did in reality oligarchs had already accumulate a lot of money before 1989 and when the collapse arrived they just have the resources/money to buy everyrthing that was under privatization?
In my country except from extremely rich Russians we have an extremely rich Chinese.
Chinese are still living in a communistic regime. These people come from China to Cyprus, possessing the resources to buy a house with value one million and a car 100,000 euro. If they have 1,000,000 (house) + 500,000 (deposits) + 100,000 (car) = 1,600,000 euro in insignificant and trivial Cyprus this means that in China they don't have less than 50,000,000 euro.
Where did they found this money from the time the state is communistic?

Restatement of the question:
You want me just to believe that a person who was just clever and ruthless was able to find 1,000,000 euro to buy a state business?
Where he found the money?
Or ... he was just a superior army officer and this state business was just a present to him by the government?

Nothing makes sense.
I know hard working, clever people who will never earn more than 1,000,000 million during their whole life.
If these oligarchs just stole this money without using any skill, cleverness, innovation, social contribution the government should confiscate everything.
Russians should wake up!

Originally Posted by Antonio1986

Restatement of the question:
You want me just to believe that a person who was just clever and ruthless was able to find 1,000,000 euro to buy a state business?
Where he found the money?
Or ... he was just a superior army officer and this state business was just a present to him by the government?

They didn't need any 1 mil Euro. And as you know, the Euro didn't exist back then. They would have used Dollars or D Mark. But nowhere near that. If you really want to know about this, some of the oligarchs have actually written memoirs. I assume they explain some of this. Boris Berezovsky for example, wrote a memoir, I think. I haven't read it, but I've seen interviews with him.

They bought entire factories and mines for much less than that!

They borrowed the money abroad, and had made some of it during glasnost when some limited capitalism was allowed, co-ops and the like. Against that, they could borrow more.

In all honesty, a very large proportion, if not the majority of the oligarchs are Jewish. So they may have taken advantage of the opportunity to emigrate to Israel in the 1980s, made a bit of hard currency there, and taken a loan, then returned to the USSR. I think a few people did that, and their Israeli citizenship meant they could circumvent some of the local laws even though they were for all extent and purposes Russians.

Also, super rich people from the US, like George Soros etc, made funds available for those wanting to invest in Eastern Europe. Western banks knew what was going on in Eastern Europe and they knew that anyone who bought anything there was paying well below the market price. I don't know how the banks in the USSR worked, and whether they would have lent people money for investments in the late 1980s.

It probably varied from person to person, but they bought HUGE enterprises for RIDICULOUSLY low sums of money, and money was made available to Russians who figured out capitalism before everybody else.

A lot of rich people or corporations across the world were all to keen to see the USSR sold off and thus lose the opportunity to ever make a comeback as a socialist country.

If these oligarchs just stole this money without using any skill, cleverness, innovation, social contribution the government should confiscate everything.
Russians should wake up

They know it... Check the political forum.
And the oligarchs were clever and bold. Not very ethical probably, and they did not invent anything. But it was probably hard work to figure out how to make a Soviet factory or mine profitable internationally while hanging on to skilled labour and preventing looting. Not to say I admire them, I don't. They were like clever parasites who took advantage of a very unusual situation.

But unfortunately it took regular people in Russia too long to figure out what was happening to their country. By the time normal people really understood capitalism and had a competent president, it was too late.

Some of us said for a year or two "They are crazy! They are selling out everything they worked for, for 70 years. For a stupid BigMac and a pair of Levis" But then, all the dirt on the USSR came out, it was black painted. People thought it was a cruel country and modern Russia a dump. For a few years people thought Russia was a country of gangsters, alcoholics, crooks and prostitutes. Everyone turned their back on Russia. That was Russia's darkest moment, in the 1990s. Then things improved, with Putin and oil/gas money after that.

Russia has had the most insane modern history of any country in the world really. That's one of the reasons I find it so intriguing. They have experienced everything there.

Originally Posted by Hanna

They didn't need any 1 mil Euro. And as you know, the Euro didn't exist back then. They would have used Dollars or D Mark. But nowhere near that. If you really want to know about this, some of the oligarchs have actually written memoirs. I assume they explain some of this. Boris Berezovsky for example, wrote a memoir, I think. I haven't read it, but I've seen interviews with him.

They bought entire factories and mines for much less than that!

The most valuable property was sneaked away from the state via Залоговые аукционы.

the government should confiscate everything.
Russians should wake up!

Funny like a bank employee from Europe suggests to confiscate while european leaders call Putin a dictator for trying to do just the same. Look like Khodorkovsky bieng a biggest crook in modern russian history magically turned from bloody oligarch into a political prisoner and freedom fighter.

That's not that easy, my friend.

How can this happens from the time the economy of Russia is now in a severe crisis (the GDP growth is less than 2%)?
I think that Russia has one of the worst economic systems and more socially unfair from all the industrial countries.

I wish this "crisis" and unfairness would last as long as possible.