World on Fire - Brownstein, Michael [48]
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Why were so many of the oligarchs Jewish? How did it happen that, even as Russia sank from Soviet superpower to post-perestroika immiseration, members of a minuscule “outsider” ethnic minority came to wield almost unimaginable economic and political power?
Certainly the answer is not that Boris Yeltsin had a special fondness for Jewish interests. Yeltsin agreed to loans-for-shares because he desperately needed capital, both to salvage a collapsing economy and to finance his reelection. And the soon-to-be oligarchs had capital. By the early nineties they had already accumulated far more wealth than anyone else in the country.
For one reason or another, for better or worse, in Russia’s nearly anarchic transition to a market economy, Jews rose to the top. Long before most Russians—including the country’s leaders—had any real understanding of how markets work, the six Jewish oligarchs mastered the game. These men started with next to nothing; most were actually disadvantaged by their Jewish ancestry. They were not particularly sophisticated. They may have been ruthless, but they were plainly smart, unsurpassed entrepreneurs who built their empires from scratch.
The Seventh Oligarch
The contrasting story of Vladimir Potanin, the non-Jewish oligarch, provides a stark counterpoint. Unlike the others, Potanin essentially inherited his wealth from the former Soviet Union. The well-connected son of a senior Soviet foreign trade official, Potanin was privileged all his life. During the Communist era he traveled widely with his father, to places like New Zealand and Turkey. He never had to barter theater tickets or hawk blue jeans. Instead, he attended Moscow’s Institute of International Relations, the prestigious training ground for Soviet diplomats, then began his climb up the bureaucratic power structure. In 1992, Potanin started a bank. It was not especially successful. Yet when Russia’s state-owned International Bank of Economic Cooperation collapsed, and the panicking Kremlin needed someone to take over its accounts, it was perfectly natural that they chose the golden boy Potanin. “He went straight from a promising Soviet career to a $300-million bank,” writes Freeland. “Even in a country where most fortunes were built on the back of government connections, Potanin earned an enduring reputation as the nomenklatura’s favorite capitalist, the tycoon who had been appointed by the old elites, rather than making his own way.”
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In 1994 it was Potanin who conceived of loans-for-shares and, after getting the other oligarchs on board, it was Potanin who sold the scheme to the Kremlin. He was, after all, one of them: an archetypical Russian with a pug nose, pink skin, and sandy hair, and just the kind of “home-bred tycoon” Yeltsin’s pro-market reformers had hoped the market revolution would create. With the cash-hungry state behind them, Potanin and the other oligarchs wrested control of Russia’s crown-jewel natural resource companies away from their (also highly corrupt) “red” directors. The oligarchs divvied up the loot: Potanin grabbed Norilsk Nickel, Russia’s metals colossus, Khodorkovsky took Yukos, Berezovsky and Abramovich got Sibneft, and so on.
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All the oligarchs were cold-blooded. They cheated foreigners and compatriots alike, displaying utter disregard for Russia’s welfare—and in some cases, human life. In these respects, however, the oligarchs essentially personified