Is Russia an oligarchy? What is an oligarchy and what does it mean in 2022?

Is Russia an oligarchy? What is an oligarchy and what does it mean in 2022?

For centuries, rich people, families, and organisations representing business interests have had a powerful grip on a country’s government policy. Their preferences have always had a more significant impact on policy decisions than the views of the poor or middle-income constituents. In most cases, the opinions of those in the lower-income groups and their representatives never matter and do not impact government policy. Such a power structure in any country is known as an oligarchy, and examples have existed throughout history. But in the modern era, is Russia an oligarchy?

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The Russian flag. Photo: @KremlinRussia_E
Source: Twitter

One can consider Russia both a historical and modern example of an oligarchy. In Russia, the elite and the wealthy are the ones that somewhat run the government. The oligarchs created their wealth in the late 1980s when the Soviet Union collapsed. But even when the Soviet Union was in existence, oligarchy still existed.

Russia has many industrial tycoons with ties to the ruling government. Therefore, they are more likely to be agents of political and economic change or opponents of any changes.

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What is an oligarchy?

An oligarchy is a power structure composed of a few family members, corporations, or individuals that control a country or organisation. The people with this power structure are known as oligarchs.

Many have similar traits, such as family, politics, wealth, military power, religion, nobility, or corporate interests. Oligarchs are so powerful that they control all forms of government and can influence specific aspects like a change of the laws, policies, and even constitutional democracies.

What country is an oligarchy? One can give many oligarchy examples even in 2022. For example, South Africa was a racially-based oligarchy during the apartheid era. However, their independence in 1994 made them a democratic nation. Today, the best examples of oligarchies include China, Turkey, Iran, Saudi Arabia, the United States of America, and Zimbabwe.

Unlike before, oligarchies today do not have a specific oligarchy symbol. Instead, the individuals with influence in government and the economy choose to operate in the shadows.

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What type of government is Russia?

Constitutionally, Russia is a federal democratic government. When the Soviet Union collapsed in 1991, the Russian Federation became independent. As a result, it transitioned from a communist dictatorship state to a capitalist, multiparty democracy. In 1993, the country formally approved a new constitution that recognised it as a federal, democratic republic.

Is Russia an oligarchy
A group of Russians wearing traditional attires. Photo: @KremlinRussia_E
Source: Twitter

Once it became democratic, its citizens could exercise freedoms and fundamental rights, including voting for a president for a term of six years. Now, on paper, Russia is a federal democratic government. But, in reality, is Russia an oligarchy?

Is Russia an oligarchy government?

Historians trace the Russian oligarchy to at least the 1400s. However, oligarchy in the country became more apparent after the dissolution of the Soviet Union between 1988 and 1991. After the Soviet Union, Russia allowed a small group of wealthy individuals to gain a lot of controlling interests in the most valuable resources and utilities in the country.

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The consequence of such vested interest was that oligarchs ruled the politicians, although politicians ruled the country. Moreover, since they controlled the politicians, the oligarchs benefited financially from insider knowledge of their actions and economic policies. As a result, today, many influential business people in Russia have close ties to the government and the president.

How is Russia an oligarchy? Here is how Russia is an oligarchy today:

  • About a handful of individuals and corporations control 85% of the value of the country's leading private companies. The billionaires control roughly 30% of the nation’s wealth.
  • A few wealthy Russians either have direct power or perceived power in the country’s state of affairs despite not being elected to positions of power by the electorate. Igor Ivanovich Sechin is an example.
  • In Russia, influential individuals in the corporate world are likely to be agents of economic and political change. However, they can also be opponents of change. The re-election of Vladimir Putin and the change of the Russian constitution to allow Putin to run for president until 2024 is a classic example of oligarchs exerting control over the country’s constitution.
  • Oligarchs invest their money overseas. They prefer countries with stable democracies. Thus, Russian oligarchs have their money in other European nations and the USA and Australia. Roman Abramovich is an excellent example.

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Russian oligarchs also hold excessive market power in the sectors they control, including oil, natural gas, energy, ferrous metals, automotive, machinery, and non-ferrous metals.

How did the oligarchy start in Russia?

Is Russia an oligarchy
Russian athletes holding their flag. Photo: @KremlinRussia_E
Source: Twitter

Although the form of government started in the 1400s, the collapse of the Soviet Union in 1991 saw an elite class of Russians use their connections to take over previously state-owned industries. Most of them profited from Russia’s new capitalism, became wealthy, and even joined the government.

Before the collapse of the Soviet Union, many Russian oligarchs either managed state enterprises or worked in government agencies supervising the enterprises. When firms in the Soviet area got privatised, the individuals converted their existent control into ownership rights. Also, other entrepreneurs who had built their wealth during the Soviet era used their financial capital to buy ownership in privatisation auctions.

In the mid-1990s, President Boris Yeltsin introduced loans for shares auction scheme to fundraise for his 1996 re-election campaign and restructure freshly-sold companies. The scheme's implementation allowed the government to appoint a commercial banker to run an auction and allocate a controlling stake of the country's resource to an individual in exchange for a loan to the federal government.

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Ultimately, the scheme resulted in an influential class of individuals or oligarchs in Russia. The three best examples of people that took advantage of the scheme are Roman Abramovich, Mikhail Khodorkovsky, and Vladimir Potanin.

So, is Russia an oligarchy in 2022? The government is a federal democratic state where citizens enjoy freedoms and fundamental rights, including voting for their representatives. However, Russia is an oligarchy because a few individuals significantly influence the country’s policies. Furthermore, many wealthy individuals and corporations in Russia control most of the country’s wealth.

Yen.com.gh shared an interesting article about Visa-free countries for Ghana. Most people were grounded at home during the pandemic; hence, they resolved to travel more if things went back to normal. If this is you and you are scouting for your next destination, then you may be considering visa-free countries for Ghana in 2022.

Visa-free countries for Ghanaians do not require a visa for you to enter or transit through them. This means that a passport holder could get into the country's borders without a visa or obtain a visa via an electronic Travel Authorization, eTA, or on arrival.

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Source: YEN.com.gh

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