Russia:
War Benefits Oligarchs

May 1, 2023

This article is translated from the April 28 issue #2856 of Lutte Ouvrière (Workers’ Struggle), the newspaper of the revolutionary workers group of that name active in France.

The Kremlin denies there is a new mobilization to deal with troop losses in Ukraine. But while the government cites “errors” when students say they receive military draft calls, Russian authorities are very busy seeking additional cannon fodder.

They are scraping the bottom of the barrel with their aggressive TV campaign. One clip argues: “You’re a guy. Prove it. Get involved.” On the streets, in shopping malls and around near transport hubs, a multitude of kiosks display “Sign a military service contract and defend the homeland” to collect commitments.

This ubiquitous propaganda in all its formats is addressed at young people without much education. Many young urban petty bourgeois find ways to avoid conscription, such as reprieve, flight abroad, exemptions purchased from military doctors, and so on. The hunt for commitments targets not them but the working classes—in particular, men, and not necessarily so young, who have precarious, poorly paid jobs. They might hope for a better life and especially for the income of a hired soldier, whose pay is four to five times higher than a provincial worker’s wage.

During the 15 months the regime has been recruiting this way, those deciding to sign a contract have becoming increasingly scarce. No one is unaware of how the officer caste treats soldiers, both at the front and at the rear. Hence the multiplication of convictions for desertion or for refusal to go into combat. The risk of being killed in battle is high!

But if this war is becoming more and more of a nightmare for those who are forced to fight and suffer it, for others it also has a good side. And even a very good side, judging by what the annual ranking of Forbes Russia says about wealth in this country.

In one year, thanks to the war and despite Western sanctions, the oligarchs, those magnates of the Russian business world, have significantly increased their number to 110, which is 22 more than before. Their combined fortunes now reach 505 billion dollars, which is 152 billion dollars more than before. The increase is essentially due to the surge in raw materials prices in international markets, on which the oligarchs’ fortunes are based. They got their hands on raw materials exports after the collapse of the Soviet Union.

Admittedly, the Russian economy officially contracted by 2.2% in 2022 because of the war. The standard of living of the working classes has suffered greatly from factory closures, shortages, the increase in the cost of imported products and of course the departure of hundreds of thousands of men for the war. But the parasites of the politico-business high bureaucracy don’t suffer from any of this. Quite the contrary. Embargo or not, for example, Russian oil continues to be sold, and it brings them high profits. All that’s required is for crude oil cargoes to make a small detour via Greek, Turkish or other intermediaries. The oligarchs continue to prosper thanks to such arrangements, but big Western industrial and financial groups benefit from these deals, too.

During the 15 months that the war in Ukraine has lasted, many extremely wealthy Russians have taken certain precautions. A few, but very few in fact, have changed their nationality. But the rest, the hundred and something billionaires and others almost as fortunate, simply migrated their companies, their funds and their yachts to countries interested in welcoming them. Such is the case with the tax havens of the Persian Gulf, where many now reside, at least part-time.

A draft law aims to double the tax rate for Russian citizens residing abroad. The Kremlin targets people who don’t have the means to shelter their income. This does not prevent the most prominent oligarchs from supporting Putin’s policy. In any case, they proclaim their patriotism. It’s the poor who are sent to die “for the fatherland” in the trenches and the mud!