In choosing to appoint Ukrainian oligarchs to important positions in Russian-heavy eastern regions of the country, Ukraine is sending an important message to Vladimir Putin.
The message is — ‘Ukraine will stay united, and you can’t hurt us without hurting yourself.’
To understand that, you have to understand how the oligarchs came to power, which ones you should be watching, and what they control.
Ukrainian oligarchs came into power the way most oligarchs do — amid chaos. When Ukraine became an independent country in 1991, the country’s public assets from the USSR were carved up among powerful businessmen who were at the right place at the right time, much like they were in Russia. A lot of these men — and they are all men — came from nothing.
As a result, the richest 50 people in Ukraine control 46% of the economy today.
That’s why the new government appointed Sergei Taruta the governor of Donetsk, the eastern region where his mining and metals conglomerate ISD Corporation is based.
It is also why the fourth richest Ukrainian, Ihor Kolomoysky (an ally of Yulia Tymoshekno) was appointed governor of Dniporptrousk. He, along with his partner Henadiy Boholyubov, control the largest bank PrivatBank, the largest bank in the country.
“The recent agreement from two of the main oligarchs from the Eastern regions, billionaires Igor Kolomoisky from Dnipropetrovsk and Serhiy Taruta from Donetsk, to serve as governor of their respective region under the new Kiev authorities, in order to “protect the homeland in danger”, reinforces the prospects for a united Ukraine,” wrote Qatar University Professor Remi Piet, in a column for Al Jazeera.
And the oligarchs who haven’t taken positions, but have voiced their support for the new government, may be even more important.
Rinat Akmentov is the richest man in Ukraine. His father was a coal miner, now, he’s worth $US11.4 billion. Through his holding company System Capital Management, he controls about half of Ukraine’s steel, coal and electricity production (including a 71% interest in the country’s largest steelmaker) according to Bloomberg.
A lot of that steel, of course, goes to Russia.
Rinat, a former Yanukovych ally, has said that he will not take a post in the new government, but he has also said in no uncertain terms that he stands behind the country.
“Our objective is to ensure the safety of people and their families and secure stable operations of companies in the country,” he said in a statement through his company.
Viktor Pinchuk is another oligarch to watch. He’s worth $US3.2 billion, according to Forbes, and though he’s said that he will not take a post in the new government either has voiced his support.
The importance of Punchuk’s support cannot be overstated. His company, Interpipe, is a supplier for Russia’s state gas company, Gazprom, so he has a major stake in the Russian economy.
In fact, both of these men do. According to Bloomberg, Rinat lost $US700 million when the Russian stock market got clobbered yesterday.
But they’re standing by Ukraine anyway.
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