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Putin Turns to Oligarchs for Billions as Russia’s War Economy Comes Under Strain
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Russian leader Vladimir Putin has appealed to the country’s oligarchs to make financial contributions to the state budget as part of efforts to stabilize the nation's finances while continuing the invasion of Ukraine.
According to Financial Times, citing its sources, this request, made during a meeting with Russian oligarchs on March 26, signals Putin's determination to pursue the war despite growing financial strains on the Kremlin.
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According to sources familiar with the discussions, Putin expressed his intent to see the war through to a “victorious” conclusion, particularly with the goal of capturing the remaining parts of Ukraine’s Donetsk and Luhansk regions. Putin reportedly stated that the decision to continue the war was necessitated by Ukraine’s refusal to unilaterally withdraw from the Donbas during recent rounds of negotiations brokered by the US.
The request for funds from Russia’s elite marks the first time Putin has personally asked the oligarchs for direct financial support to aid the Kremlin’s defense spending.
Putin’s outreach to the business elite underscores the Kremlin's dependence on them to help fund the war. Despite private concerns over the war’s impact on Russia’s economy, the business elite has largely rallied behind the president. At least two of the businessmen present during the meeting expressed willingness to contribute to the country’s budget, according to sources.
Oligarch Suleiman Kerimov, reportedly involved in the recent acquisition of online retailer Wildberries, stated he was prepared to contribute 100 billion rubles (approximately $1.2 billion). Metals magnate Oleg Deripaska also agreed to make a contribution when asked, the sources added.
At the same time, a growing sense of pessimism among Russian entrepreneurs reflects deep concerns about the country’s economic future, with 83.3% of companies predicting worsening conditions over the next year.
A survey conducted by the Center for Strategic Research highlighted a sharp increase in negative outlooks, with three-quarters of respondents expecting a decline in their company’s performance. The ongoing crisis is fueled by a sharp rise in unpaid debts, affecting 91.7% of businesses in February, and exacerbated by the burden of high interest rates.
With the Russian Central Bank’s key interest rate currently at 15%, nearly 42% of businesses have completely scrapped their investment plans, while another 42% have indefinitely delayed projects. Business leaders have warned that investments become “economically meaningless” when interest rates exceed 12%, a threshold that has been surpassed as the Kremlin attempts to control war-driven inflation.
These economic challenges come as Russia continues its military aggression against Ukraine, a situation that Ukrainian President Volodymyr Zelenskyy has warned could be further enabled by the lifting of sanctions.
In an interview with Le Monde on March 26, Zelenskyy emphasized that any easing of sanctions could provide Russia with much-needed resources to continue its war efforts, particularly in recruiting personnel and supplying military drones.
“Why do we react so sensitively to sanctions being lifted? Because it’s about money. And money isn’t just tanks. Nobody fights with tanks anymore. Money means drones. Money means people. People mean contracts. And if they don’t have the money for contracts, their strength is declining,” Zelenskyy explained in his statement.
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