Russia’s war-driven economy has significantly boosted the wealth of its oligarchs despite international sanctions. Between 2023 and the first quarter of 2024, at least a dozen Russian tycoons pocketed $11.4 billion in dividends. The dividends highlight the continued profitability of Russia’s largest companies, even as the country faces isolation from Western economies.
A significant portion of these dividends has flowed to businesspeople closely tied to Russian President Vladimir Putin, many of whom are under Western sanctions. Primary beneficiaries of these payouts are commodity exporters who have shifted their focus from Europe to China, India, and other countries in the global south. Vagit Alekperov, a key shareholder and former president of oil giant Lukoil, received 186 billion rubles in dividends.
The UK and Australia sanction Vagit Alekperov.
Oligarchs’ wealth amid sanctions
Similarly, Alexey Mordashov, chairman and a main shareholder of steel company Severstal, pocketed 148 billion rubles, with sanctions imposed by the US, the UK, and the EU.
Vladimir Lisin, the chairman of Novolipetsk Steel, received 121 billion rubles in dividends. These payouts underscore the resilience of Russian corporations amid economic isolation and a growing war economy. However, Russia’s Center for Macroeconomic Analysis and Short-Term Forecasting has warned that the economy could face a downturn in the latter half of the year if the Bank of Russia raises interest rates.
Central Bank chief Elvira Nabiullina has signaled potential interest rate hikes due to unexpectedly high inflation. Russia’s key interest rate currently stands at 16% to curb rising prices, but inflation remains well above the official 4% target. The divergence between booming corporate profits and broader economic instability highlights the complex dynamics of Russia’s wartime economy.
