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    HomeOpinionsCypriot PerspectiveThe Russian oligarchs and its Greek Cypriot offshoot

    The Russian oligarchs and its Greek Cypriot offshoot


    By George Koumoulli


    Democracy has never thrived in Russia. In fact, the Russian people have been ruled by one or the other oligarchs since at least the 15th century. The workers and peasants were nothing but helots of autocracy and malice, as Leo Tolstoy recounts in many of his books.



    The dissolution of the Soviet Union in 1991 and the collapse of real socialism were undoubtedly a great milestone in the history of Russia. The euphoria of the progressive people skyrocketed, expecting that this time Russia would follow a path of democratisation and, therefore, take a deep root in this vast and rich country, human rights, equality, the rule of law, individual freedom, economic freedom. Aye, though! The de-escalation of optimism was rapid. Expectations mutated into hopes and hopes into elusive dreams. The oligarchy not only weakened, but instead threw and spread its tentacles to all economic centers.


    But what went wrong with the unraveling of communism? The new rulers of Russia, in their effort to rationalize and revitalize a collapsed economy, decided to privatize virtually all industries and utilities of the country. Undoubtedly, it was a step in the right direction. It was not, however, a “normal” privatisation, where the general public was asked to buy shares of a former state-owned company, as was done in the West with many industries. “Out of nowhere” appeared a group of bankers and leaders of the communist party, who financed the privatisation agreements through loans from newly established banks. Moreover, they bought directly at derisory prices without any process (since there was no strong state at the time) assets from fertilizer factories to mines and state-owned oil and gas companies.

    Almost lightning fast, then, a local economic oligarchy bounced back immediately after the collapse of the Soviet Union. The result is that Russia is now one of the most unequal countries on the planet in terms of the distribution of its wealth. According to an estimate by the prestigious journal “Journal of Law and Economics” (November 2020), about 500 people ( 0.0003% of the population) own more wealth than the remaining 145 million Russians. The wealth of the 117 richest Russian billionaires in 2020 stood at $584 billion. It is noteworthy that the total wealth of Cyprus amounting to 107 billion dollars ( represents only 18% of the wealth of the 117 richest Russians.


    In 2020, Putin cemented his position as a dictator. Among other things, he changed the term limit so that he could remain President until 2036. This is exactly the kind of “consolidation of power” movement that oligarchic governments are making. The Russian regime has nothing to do with Marx’s classless society, and I fail to understand the sympathy that some “leftists” have for this. On the contrary, it is a far-right regime linked to racism, xenophobia, nationalism, homophobia, conspiracy theories and authoritarianism. It is proven that the Russian regime is a pole of attraction for all the far-right parties in Europe which Putin is supporting economically, as Marin Le Pen has confessed. Therefore, it should not be surprising that the chief fascist and now convict Elias Kassidiaris immediately rushed to Putin’s side, condemning the sending of defence material to Ukraine. This, he said, “constitutes a de facto war involvement of our country. Mitsotakis committed a major crime against the national interest.”


    How was Cyprus affected by the rise of the Russian oligarchy? A combination of factors attracted wealthy Russians in increasing numbers, from the 1990s onwards, to Cyprus. Especially the Limassol attraction was irresistible for Russian croissants: it is a seaside town (a tremendous advantage for them), it has a Mediterranean climate, it is inhabited by like-minded people (yes, and that counts), there are schools for foreigners and it has many luxurious properties for those who want to enjoy the best that a culturally and socially vibrant city has to offer.


    Above all, however, the Russians benefited from the sadly lax legislation on capital transfers to Cyprus, which made it easy to launder dirty money and that is why, by the way, the name of Cyprus ranks high on the list of international dirty money washing machines. Moreover, the notorious Cyprus Investment Programme (JEP) made breaks, attracting, among other things, the Russian oligarchs. However, in order to transfer the enormous wealth that the Russians had to Cyprus, it took the help of the big lawyers who guaranteed them citizenship, the big bankers to take care of their portfolios, the big bankers to find luxury real estate and some unscrupulous politicians to set aside legal obstacles. In other words, a new financial elite emerged (including the family law office of the President of the Republic), which brazenly appropriated almost all the revenues from the Citizen Service Centre (amounting to about 10 billion euros) and thus secured for itself a life of flower-seeded and chrysosparton. This group composes the oligarchy of Cyprus which, in fact, is the offshoot of the Russian oligarchy. Of course, Cypriot oligarchs do not have the economic stature of their Russian counterparts but, in our small country, they are understandably given the title of economic giant.

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