It looks like 2020 might not be such a good year for the world’s richest man. No, I do not mean Jeff Bezos. He’ll be fine. Amazon’s profits will do nicely with half the world waiting for deliveries in lockdown. But Bezos is not the world’s richest man. That honour belongs to another kind of businessman altogether, Vladimir Vladimirovich Putin. He’s best known in one guise or another as the man who has been running Russia for 20 years during which Putin has become the most powerful Russian leader since Stalin, and the richest Russian in history.
For the past year I’ve been putting together a podcast series, The Big Steal, trying to figure out why the world’s biggest country, Russia, spanning 11 time zones and with extraordinary natural wealth is so seriously under-developed in economic terms. Russia’s GDP per head is about a quarter of that of the UK. The simple answer is that so much of Russia’s wealth has been stolen by what were described to me as a “clique of bandits” who have turned Russia from communism to kleptocracy in a generation. At their heart is President Putin himself.
The most striking example is the the Russian oil company, Yukos. When the Soviet Union collapsed in 1989 there followed years of economic and political turmoil. In the 1990s a young Russian entrepreneur Mikhail Khodorkovsky seized a great opportunity when Russian state assets were going cheap. He bought up Yukos and its oilfields. Within a few years Yukos was transformed, competing with US oil giants and turning Khodorkovsky into Russia’s richest man. But, as he told me, he made a terrible mistake. Vladimir Putin took part in a discussion live on Russian TV with some of the country’s top businessmen. Khodorkovsky used the opportunity to tackle Putin about corruption by state officials, hoping Putin would crack down on their links with the Russian mafia. It didn’t go well. Within a few months Khodorkovsky was in a cage in a courtroom show trial and sentenced to a decade in a Russian jail. Yukos had its assets seized by the Kremlin and Putin’s cronies.
As Bill Browder, an American businessman who also fell foul of Putin, told me, Putin’s message was simple. He was telling the oligarchs, the richest Russians, to keep out of politics. If they obeyed, he would let them keep most of their money. The alternative was that they could join Khodorkovsky in a cage. Browder and numerous investigators into Russia’s dark money economy say that Putin and his Kremlin cronies then began to take a cut from the businesses. Anders Aslund, a Swedish economist and well-connected Russia-watcher with the Atlantic Council in Washington told me Putin could be regarded as a “trillion dollar criminal,” although the money is shared by others in his circle. Aslund estimates Putin’s personal net worth at more than Jeff Bezos’ fortune of roughly $120 billion.
But now Putin is dealing with a host of problems. First, in February a court in the Netherlands awarded the former Yukos shareholders compensation of $50 billion for what is the biggest theft in history. It’s unlikely the Russian government will be signing any cheques to pay, but the court decision may be the beginning of more legal problems to come for Putin and his allies. Second, coronavirus means Putin has been forced to cancel this week’s military parade marking the 75th anniversary of the defeat of Nazi Germany, Russia’s “Great Patriotic War” event is usually a big crowd-pleaser. And, even more unwelcome for Putin, last month Russia was due to hold a vote which would allow him to become president for life, or at least until 2036. Coronavirus means the vote has been postponed, while Russia’s economy – based on oil – is being pummelled by the lowest oil prices anyone can remember.
But do not write Putin off. The ex-KGB Colonel is as resilient as he is ruthless. On his watch Russia has invaded Ukraine and parts of Georgia, annexed Crimea, murdered Alexander Litvinenko with polonium in London in 2006, attempted to murder the former Russian military intelligence officer Sergei Skripal and his daughter Yulia in Salisbury with nerve gas, launched a cyber attack on Estonia, annexed Crimea, bombed civilians in Syria plus, hacked Hillary Clinton’s emails, interfered in democratic elections, and shot down a Malaysian passenger aircraft MH17. There are also various Russian sport doping scandals and the “mysterious” deaths of anti-Putin activists. As one of our interviewees for The Big Steal, the former world chess champion Gary Kasparov put it, every country has its own mafia. In Russia, the mafia has its own country.
The Big Steal is free on https://podcasts.apple.com/gb/podcast/the-big-steal/id1498600409 and wherever you download your podcasts, listen to the first episode below:
