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. Last Updated: 07/27/2016

NEWS ANALYSIS: Battle for Survival Splits Oligarchs




The financial-industrial magnates known to Western and Russian media as the oligarchs are once again not a united force, and for the weeks of this economic crisis each has been fighting on his own for the life of his empire.


In previous years, the oligarchs competed in times of plenty -- for them, anyway -- but in times of crisis came together like a fist to smash mutual threats.


Although other names and institutions can easily be added to the list, those generally considered the core group of oligarchs include seven names ostentatiously dropped by financier Boris Berezovsky in 1996.


In a famous interview with the Financial Times, Berezovsky said he and six other men -- Vladimir Potanin of Uneximbank, Vladimir Gusinsky of MOST-Bank, Pyotr Aven and Mikhail Fridman of Alfa Bank, Mikhail Khodorkovsky of Menatep and Alexander Smolensky of SBS-Agro Bank -- had bankrolled President Boris Yeltsin's re-election, controlled half of the Russian economy and could dictate government policy.


In Berezovsky's telling, the oligarchs shared a grand vision for Russia's future. A year after that interview, the danger of a red revenge gone, the oligarchs were snarling at each other over the state's largest privatization of Svyazinvest, the telecommunications holding.


This year, when the ruble was devalued and the Russian treasury-bill market frozen, the banks associated with the oligarchs were struck crippling blows. SBS-Agro has been taken over by the Central Bank; others have laid off thousands in hopes of staying afloat.


The oligarchs are now fighting for survival, and though all are still in Russia, most are laying low. Only Berezovsky, as usual, has made public appearances in the media -- first advocating Chernomyrdin as prime minister, then switching to back Krasnoyarsk Governor Alexander Lebed, who now says he sees Berezovsky as a "partner."


"There no longer is any consolidated model for which [the oligarchs] are fighting. They are trying to survive separately from each other," said Sergei Markov, the director of the Moscow-based Institute for Political Studies.


However, surviving may involve sharing a few common goals. Former Prime Minister Sergei Kiriyenko and his deputy, Boris Nemtsov, have both said they were fired because they advocated bankrupting the failed banks of the oligarchs. They said Berezovsky, who is close to Yeltsin, prevailed upon the president to bring back Chernomyrdin.


Chernomyrdin would be good for Berezovsky and others, like Menatep's Khodorokovsky or Uneximbank's Potanin, with large oil or gas concerns. A Communist prime minister, however, could bring tougher times -- or even, judging by the latest statements of the Communist Party, renationalization.


And in these days of crisis, what is good for one oligarch may kill another.


"[Oligarchs] are like tropical plants. They can't live in the mountains or in the desert. And they are unlikely to change. So once the situation becomes a bit clearer, all of them will try to affect it so the conditions are suitable for them," said Yury Korgunyuk, an analyst for the INDEM research center.


"The SBS-Agro Group could be in favor of somebody like [Communist Party member and ex-chief of Gosplan] Yury Maslyukov, who might to turn his attention to agriculture and the regions. SBS-Agro has very close ties with both, and for that group Maslyukov will mean a flow of state money," he said.


But despite all that is at stake, with Chernomyrdin now looking unlikely to pass the State Duma, or parliament's lower house, Markov said Russia seems to be entering a unique new situation -- when the oligarchs have lost control of the process.