Oligarchs reap billions in war dividends as Russia's economy adapts
Russian investors received dividends totaling over 1 trillion rubles (21 billion CAD) in 2023 and the first quarter of 2024. This is a result of the economic revival that Russia has experienced despite the war in Ukraine lasting for more than two years.
According to Bloomberg data, Russian businesses are profiting from the war. At least twelve Russian entrepreneurs have garnered significant revenues from dividends paid by companies involved in the "war economy." Among the beneficiaries are entrepreneurs closely linked to President Vladimir Putin and individuals subjected to international sanctions.
Oligarchs linked to Putin profit from the war
At the top of the list of major dividend recipients is Vagit Alekperov, a key shareholder and former president of the oil company Lukoil. His revenues from dividends amounted to roughly 186 billion rubles. Alekperov, while sanctioned by the UK and Australia, has so far avoided restrictions from the United States and the European Union.
Billionaires Alexey Mordashov from Severstal PJSC (148 billion rubles) and Vladimir Lisin from Novolipetsk Steel PJSC (121 billion rubles) took second and third place in terms of dividend amounts. It is noteworthy that Mordashov is on the sanctions lists of the US, UK, and EU, while Lisin is not subjected to any significant restrictions.
Also on the list of beneficiaries is Gennady Timchenko, a billionaire considered a close ally of President Putin, and Tatiana Litvinenko, who received shares in PhosAgro PJSC just before her husband Vladimir was sanctioned by the United States in 2023.
Russia's economy adapts to the war
As Bloomberg points out, many Russian companies halted dividend payments in the initial period after the invasion of Ukraine in February 2022, fearing a potential economic collapse. However, these fears did not materialize, and the Russian economy gradually adapted to new conditions.
Russian oligarchs also face the challenge of finding suitable investment opportunities for their dividends. Sanctions have forced many of them to turn to the domestic market. In May, private investors invested a record 116.3 billion rubles on the Moscow Stock Exchange in 2024.
Investments in Russian industry increased by 14.5% year-over-year in the first quarter, reaching a record level of almost 6 trillion rubles. However, as experts cited by Bloomberg note, investment opportunities in the domestic market are limited.
