Russian Life & People Digest
Question by september_serenade: Russia- how did a few people become super-rich after the collapse of communism?
Like Abramovich
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Answer by Maxeem A
They just worked hard, and did not forget to take your money with them when they left Russia..
I miss Russia!
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brainstorm says
After the fall of communism the russians asked some american economists and business experts how to make the transition to a market economy.
Their advice was to withdraw all state subsidy from factories and business and to issue shares in the enterprises to the people who worked in them.
Because the state subsidies stopped there were no wages to pay the workers so they tried selling the goods they produced on the streets direct to the public
Unfortunately the public didn't have much money either because most of them were in the same difficulty.
You would see workers from a glass factory lining the streets trying to sell glass vases to people. Of course they didn't sell many.
After a short time their savings ran out and they became desparate.
This is when the smart men stepped in. They got their agents to go to the factories and offer to buy the workers shares.
This they did for a tiny fraction of their true value.
Having gained control of the companies for virtually nothing they could then use them to raise loans to buy more companies.
That's how you become a billionaire in five years.
rdenig_male says
Remember that under Communism the state owned everything. After the fall of communism all these state assets were sold at a knock down price and sometimes in rather dubious circumstances. These guys had the money to buy those assets and thus made a fortune. There is a novel called Vodka, the author of which I forget, which describes the sale of the state vodka factories. All the workers were supposed to get shares and were given vouchers to exchange on privatisation day but the boss arranged for his workers to give him their vouchers and he was able to acquire vast numbers of shares, thus making himself very rich overnight. How accurate to the facts this is, I don't know, but I reckon is a fair representation of what went on in the early 90s.
Clark K says
A few always do