Russia’s Deep Pockets Becoming Only Ankle-Deep

A devastating financial crisis is taking its toll on Russia’s wealthy population. The rich has seen drastic cuts in net value, especially billionaires whose assets have been cut in half in most cases.

Oleg Deripaska, an automotive and aluminum tycoon, was the richest man in Russia until the recent financial crisis. After the Russian stock market collapsed, Deripaska became in debt of over $20 billion.

Other tycoons were hit hard as well. Vladimir Potanin in the metals and media industry lost a fortune. Mikhail Fridman in the banking, oil and retail industries also felt the wrath of the financial crisis.

According to Finans Magazine, the business magazine or Russia, Russia’s richest man is Mikhail Prokhorov, with a fortune of $14.1 billion. was formerly a major shareholder of Norilsk Nickel, Russia’s biggest mining company, but he sold his 25% stake in Norilsk last April, after disagreements with his long-time partner Potanin, bagging $8 billion in cash. So, he was sitting on a pile of cash for a rainy day that came with the financial crisis.

However, with great fortune in Russia comes the emergence of corruption, greed and embezzlement. After Finans published its story on the effect of the financial crisis on Russia’s richest, Russian prosecutors announced that they plan to bring new charges of theft and embezzlement against Khodorkovsky, the former owner of the oil company Yukos.

Khodorkovsky could now face time behind bars. This makes even those who lost fortunes because of the financial crisis feel lucky. Better to be poor and honest than free and behind bars.

Julianne Kriner
Team Russia

Russia: the Financial Crisis and Migrant Workers

There appears to be a juxtaposition between the image Russia wishes to project on a global scale and the realities that exist within the country. Most recently Russia has tried to present a more positive image of itself in the press, openly showing its support of the new Obama administration, even expressing its willingness to holding negotiations on nuclear disarmament with the US. On Feb. 11 the country added to the positive press by announcing its opposition to add issues such as climate change to the agenda for the April summit, arguing its wish to focus on a more pressing matter, the financial crisis. Russia’s G8 and G20 deputy Sherpa Andrei Bokarev stated the need for all countries to work together to make “decisions leading to concrete results” to truly solve all facets of the economic crisis.
Yet, according to a new report released by the Human Rights Watch, the crisis is taking a serious toll on an already underprivileged group in Russia, migrant workers, specifically in the field of construction. According to the report, based upon 146 interviews with current or former workers, employers are not providing contracts, continuing to deny wages, trafficking migrants into forced labor and threatening violence. Perhaps most discerning in the report, however is that there is also an official police presence, which does not work to protect these workers but instead works for the employers to enforce these unfair working conditions and further abuse the workers. "Without urgent action by the Russian government, migrant construction workers will be doubly vulnerable to abuse, both by employers and by others looking to scapegoat migrants for the country's economic problems," Jane Buchanan, the report's author said.

By: Jennifer Lynch (Russia)