Over the past three years, Russian authorities have seized assets worth about $50 billion, a study cited by Reuters reveals, reports News.bg.
The data underscores the serious transformation of the Russian economy towards a model known as “Fortress Russia“, in the context of the ongoing war in Ukraine.
Since the start of the conflict, thousands of Western companies have left the Russian market, with some selling their assets, others handing them over to local managers, and some simply abandoning them. In many cases, the Russian state has expropriated property or transferred it to new, often state-controlled, entities.
President Vladimir Putin has signed several decrees allowing the seizure of assets owned by Western companies in response to “illegal actions” by the West. Among those affected are giants such as Germany’s Uniper and Danish brewer Carlsberg.
In addition to foreign assets, large Russian companies have also changed ownership through various legal mechanisms, including arguments about strategic resource needs, the fight against corruption, doubts about privatization processes or mismanagement.
According to data from the Moscow law firm NSP („Nektorov, Saveliev and Partners“), the value of this wave of „nationalization“ amounts to 3.9 trillion rubles for the period 2021-2024. The analysis was first published by the Russian newspaper Kommersant, which defines it as an illustration of a “fortress“ economic model.
After the collapse of the Soviet Union in 1991, many believed that Russia would integrate into the global market economy. But in the 1990s, this hope was undermined by widespread corruption, economic turmoil, and growing organized crime.
In his first years in power, Vladimir Putin promoted economic liberalization and helped GDP grow from $200 billion in 1999 to $1.8 trillion in 2008. However, between 2008 and 2022, although the economy grew to $2.3 trillion, Western sanctions had a serious impact, especially after the annexation of Crimea.
By 2024, according to the International Monetary Fund, the nominal size of the Russian economy will amount to $2.2 trillion, significantly less than that of China, the EU, and the United States.
The Russian authorities justify their actions by the need for extraordinary measures to protect the economy from "attempts by the West to crush it." Putin claims that the departure of Western companies has allowed local manufacturers to take their place and that sanctions have stimulated the development of domestic businesses.
However, a wartime economy focused on arms production and sustaining a long-term conflict has increased the influence of the state and government circles at the expense of private business.
Russian prosecutors recently sought the confiscation of billionaire Konstantin Strukov’s majority stake in the gold mining company Uzhuralzoloto. This is just one of many cases in which private assets have come under state control.
More than 1,000 international companies, including McDonald’s, Mercedes-Benz and others, have left Russia since the start of the war in February 2022, leaving behind assets worth tens of billions of dollars.