Putin allies amass fortunes as Russia profits from war economy
Russian investors received dividends totalling over 1 trillion roubles (£9.1 billion) in 2023 and the first quarter of 2024. This is due to Russia's economic resurgence, which has been recorded despite the ongoing war in Ukraine for more than two years.
According to Bloomberg data, Russian businesses are profiting from the war. At least twelve Russian entrepreneurs have obtained significant revenues from dividends paid by companies engaged in the "war economy." Beneficiaries include entrepreneurs closely associated with President Vladimir Putin and individuals subject to international sanctions.
Oligarchs associated with Putin profiting from the war
Vagit Alekperov, a key shareholder and former president of the oil conglomerate Lukoil, leads the list of the largest dividend recipients. His dividend income amounted to around 186 billion roubles (£1.4 billion). Although the United Kingdom and Australia sanction Alekperov, he has so far avoided restrictions from the United States and the European Union.
The second and third largest dividend recipients were billionaires Aleksey Mordashov of Severstal PJSC (148 billion roubles; £1.1 billion) and Vladimir Lisin of Novolipetsk Steel PJSC (121 billion roubles; £0.9 billion). Notably, Mordashov is sanctioned by the USA, UK, and EU, whereas Lisin is not subject to any significant restrictions.
The list of beneficiaries also includes Gennady Timchenko, a billionaire considered a close ally of President Putin, and Tatiana Litvinenko, who received shares in PhosAgro PJSC just before US sanctions were imposed on her husband Vladimir in 2023.
Russia's economy adapting to the war
As Bloomberg indicates, many Russian companies halted dividend payments in the early period following the invasion of Ukraine in February 2022, fearing a potential economic collapse. However, these fears did not materialise, and the Russian economy gradually adapted to the new conditions.
Russian oligarchs are also facing 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 116.3 billion roubles (£880 million) in the Moscow Exchange in 2024.
Investments in the Russian industry increased by 14.5% year-on-year in the first quarter, reaching a record level of nearly 6 trillion roubles (£47 billion). However, as experts in Bloomberg note, investment opportunities in the domestic market are limited.
