10/31/2014

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Report: 110 people own 35 percent of Russia's wealth

Report: 110 people own 35 percent of Russia's wealth
Russian President Vladimir Putin allowed oligarchs to keep their wealth in exchange for their political loyalty.
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MOSCOW (AP) - A staggering 35 percent of household wealth in Russia is owned by just 110 people, the highest level of inequality in the world barring a few small Caribbean islands, a report by a major investment bank says.

By contrast, billionaires worldwide account for just 1-2 percent of total wealth, Credit Suisse said in its report published Wednesday. Russia has one billionaire for every $11 billion in wealth while in the rest of the world there is one for every $170 billion.

The fall of Communism saw Russia's most prized assets sold off to a small circle of businessmen later known as oligarchs. President Vladimir Putin allowed them to keep their wealth in exchange for their political loyalty.

Metals and banking tycoons Vladimir Potanin and Mikhail Fridman, who made their fortunes in the 90s, are still high on the list of Russia's richest men. But the past decade saw a rise of new billionaires who draw their wealth from state contracts and some of whom are known to be the presidents' friends, like Gennady Timchenko.

Credit Suisse said that there were hopes with the demise of the Soviet Union that Russia would turn into a high skilled economy with fair wealth distribution but "this is almost a parody of what happened in practice."

The 35 percent of wealth that Russian billionaires own is equivalent to $420 billion.

"Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires," the bank said in the report.
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