One person close to Kudrin said he met with Putin a month before the invasion. Although it was clear that preparations for war were underway, Kudrin had believed the plans would not be carried out, one person familiar with his thinking said. “He counted on things not reaching such a head,” the person said.
Among the billionaires who left Russia in the immediate aftermath of the invasion are several who grew wealthy during the Yeltsin era, including Alexander Mamut and Alexander Nesis, who own the Russian gold company Polymetal, and Mikhail Fridman and Petr Aven of Alfa Group.
But many other tycoons high-tailed it to Moscow as soon as they were hit with sanctions, which have barred them from travel in the West. Other business executives fear that if they leave Russia, their companies will be seized by the government, one of the Moscow business executives said.
Some of the billionaires now stuck in Moscow are seeking only to emerge unscathed. “You may not support the war but you have to keep quiet and be with your countrymen because some of your soldiers are dying,” said one person close to one of the billionaires present at the Feb. 24 Kremlin meeting. “If you are living in the country, you may not be happy — nobody is happy about what’s going on — but don’t voice your opinion.”
Those billionaires who have been willing to speak out publicly are those who remember a different era; they made their first fortunes in the Yeltsin years, before Putin became president.
Sergei Pugachev, a Kremlin insider until he left Russia in 2011, pointed out that these tycoons were still careful in their public comments not to directly criticize Putin for going to war. “What they say is subtle: The context is that the West, NATO is to blame. … They are talking about this as though it is a conspiracy against Russia,” he said.
By contrast, those closest to Putin — who are from St. Petersburg and became fabulously wealthy after his rise to the presidency — such as Gennady Timchenko, Yury Kovalchuk and Arkady Rotenburg, are resolutely silent. They “would never go against Putin. They started with Putin, and he made them gazillionaires. Why would you bite the hand that feeds you?” said a former senior Western banker who worked with Russian oligarchs.
Apart from these tycoons, there is an army of officials and business executives in Moscow who are not troubled by Russia’s increasing economic isolation as a result of the invasion, Pugachev said, and many of the contacts he retains in Moscow have not faulted Putin for going to war. They have complained instead that the army should have been better prepared.
He said many members of the current elite are mid-level government ministers who have stashed millions of dollars in private accounts and maintain homes elsewhere in Europe. If sanctions prevent them from traveling to these countries, they’ll still be fine. “He’s still a minister in Russia, and instead of going to Austria, he’ll go to [the Russian resort] Sochi. They don’t suffer very much,” Pugachev said.
On the surface, moreover, the Russian economy has appeared to stabilize since the initial salvo of sanctions, buoyed by estimated revenue of more than $800 million a day from the sale of oil and gas to Europe. The central bank’s policy to force exporters to sell 80 percent of their hard-currency earnings has prevented a ruble implosion, while Putin has declared that the “economic blitzkrieg” against Russia has failed.
But earlier this month, Nabiullina warned the impact of sanctions was yet to be fully felt and said the worst was still to come. The manufacturing plants, where “practically every product” depended on imported components, were beginning to run out of supplies, while reserves of imported consumer goods were dwindling, too. “We are entering a difficult period of structural changes,” she told parliamentary deputies. “The period during which the economy can live on reserves is finite.”
In these conditions, Putin’s position is precarious, Pugachev said. The population has so far been lulled by the state propaganda machine, which has covered up the level of deaths in the Russian military, as well as by the sanctions’ lack of immediate bite. “But in three months, the shops and factories will run out of stocks, and the scale of deaths in the Russian military will become clear,” he said.
Despite the near-fatal blow to their interests, for now, the Russian business elite appears to be still frozen in fear. “I don’t know who has the balls to fight back,” said one of the business executives.
“But if the war is long, and they begin to lose, then the chances will be greater,” he said. “There will be a serious battle for Donbas and, if it is not successful, then there will be a big battle inside Russia” among elites.
