Ukraine’s tycoon is out of time in the midst of war with Russia

The oligarchs once swayed Ukraine’s political scene during the civil war in the east, but their influence has waned since the conflict with Russia broke out.

A week after Russian troops entered Ukraine’s territory and closed in on Kiev, the mansion on the outskirts of the capital of Viktor Pinchuk, 61, the country’s richest billionaire, was requisitioned by a group of volunteers. field hospital. Billionaire Pinchuk then left Ukraine and ran to another country.

It was not until early April, when Russian forces withdrew from northern Ukraine and its suburbs, that Pinchuk, the Ukrainian industrial and media mogul, returned home. Initially, he agreed to let the volunteers continue to use the villa for a while, but they later did not move out. The team leader stated that they decided to stay here “until the day of victory”.

The controversy over Pinchuk’s mansion has become a symbol of the decline in power and influence of Ukraine’s oligarchs, who played a key role in the early years of the civil war between Kiev and Donbass separatists. . After the military conflict with Russia broke out, the tycoons were no longer the force that swayed the political and battlefields of Ukraine.

“I have a feeling they have lost their way. They don’t know what to do anymore,” said Timofiy Mylovanov, Ukraine’s former economy minister.

A scene of devastation at the Azovstal iron and steel plant in the city of Mariupol, southern Ukraine on May 22.  Photo: Reuters.

A scene of devastation at the Azovstal iron and steel plant in the city of Mariupol, southern Ukraine on May 22. Image: Reuters.

On February 23, the day before Russia launched a military campaign, Ukrainian President Volodymyr Zelensky gathered the country’s richest people to his office, including Pinchuk and another famous tycoon, Rinat Akhmetov. The meeting took place a few days after Russian President Vladimir Putin recognized the independence of two Ukrainian breakaway regions, the self-proclaimed Donetsk People’s Republic (DPR) and the self-proclaimed Lugansk People’s Republic (LPR). Kiev now stands on the brink of a direct armed conflict with its neighboring power.

However, in the meeting, the request that Zelensky posed was very simple. He just wanted the economic tycoons to put aside the infighting and unite to support the country.

This demand is different from the role played by the oligarchs in 2014, when Russia annexed Crimea and conflict with separatists in the Donbass erupted. The Ukrainian army at that time faced a series of shortcomings, from lack of equipment to inadequate numbers and poor training quality.

The Ukrainian economic magnates at that time began to directly participate in the battlefield, pouring money to form a series of volunteer battalions to the Donbass. Some oligarchs have also been appointed governors in volatile regions where there is a large Russian-speaking population or a population sympathetic to the separatist movement.

This period of “darkness” has created momentum for some tycoons to go far on the political path.

Prominent among these is Ihor Kolomoisky, holding a multi-industry business empire including banking, metallurgy and media. This billionaire was assigned the position of governor of Dnipropetrovsk province, located next to Donbass. Kolomoisky heavily spent money on a series of volunteer groups to fight pro-Russian movements in the province, then fought with separatists in the Donbass region.

The Kiev government also appointed Serhiy Taruta, a steel tycoon, as governor of Donetsk, one of the two provinces with the strongest separatist movements. Oleksander Yaroslavsky, ranked 9th on the list of the richest people in Ukraine, was also appointed mayor of Kharkov, the second largest city in the country. The two billionaires use all resources, from finances to the media, to mobilize local public opinion against the separatist movement and block any Russian influence in the region.

Akhmetov, who once supported the pro-Russian party of former Ukrainian president Viktor Yanukovych, has also turned to support the new government in Kiev.

But eight years later, the situation was different. Ukraine’s military has been deeply reformed, accumulated a lot of real combat experience and Kiev no longer has to rely on the oligarchs as much as before to solve the shortage of resources and organizational apparatus.

Ukrainian President Volodymyr Zelensky (seated in the middle) meets tycoon Ihor Kolomoisky (on Zelensky's right) in Kiev in 2019. Photo: Reuters.

Ukrainian President Volodymyr Zelensky (centre) meets tycoon Ihor Kolomoisky (right Zelensky) in Kiev in 2019. Photo: Reuters.

Years of constant conflict in the Donbass also made the pockets of the oligarchs significantly less. Most of Ukraine’s billionaires built their business empires in the heart of the eastern heavy industry, which has now become the center of conflict.

Rinat Akhmetov, once topping the list of Ukraine’s richest billionaires, says his fortune has lost $20 billion after Russia took control of the southeastern city of Mariupol. Two iron and steel factories in the city built his fortune by Akhmetov, the Donetsk-born tycoon.

As conflict with Russia flares up, Ukrainian industrial tycoons now need the government more. They look forward to new business opportunities in the field of infrastructure construction, receiving hundreds of billions of dollars in post-war reconstruction aid from the West. Some businessmen also expect to receive war compensation for the loss of factories and property due to bombs and bullets.

However, the situation is changing in a way that is not in favor of the Ukrainian oligarchs on the political scene.

Private and state television are now subject to the same broadcasting and censorship regulations. The anti-financial law approved by President Zelensky last year also cuts down on the political clout of Ukraine’s tycoons.

The way President Zelensky stayed in Kiev to lead the government and army, lobbying for Western aid amid a historic crisis has helped his popularity and actual power skyrocket. Olesiy Danilov, national security adviser to President Zelensky and an opponent of oligarchs’ dominion of politics, stated that billionaires who behave against Kiev during wartime may pay a price when peace is achieved. reestablish.

Financial aid from the West in the near future is likely to be accompanied by conditions for economic reforms and tightening anti-corruption regulations, making the oligarchs fear that their power will continue to be exhausted.

Meanwhile, Konstantin Grigorishin, a Ukrainian metal and energy tycoon who has been plagued by corporate fights many times, still thinks his country needs time to change. Grigorishin believes that the Ukrainian political system must undergo extensive reform to prevent the re-established oligarchs’ networks from dominating the economy. The reform process requires “discipline and strategy”, Grigorishin stressed.

“Ukrainians understand that the country must purge itself if it wants to have a chance against Russia’s power,” said Orysia Lutsevych, director of the Ukraine studies program at Britain’s Chatham House policy think tank. “The Ukrainian oligarchs of the future will no longer enjoy the same privileges they once had.”

Name (Theo Financial Times)

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