Russian rich people are betting on reconciliation between Russia and the West
Boston Consulting Group estimated the volume of private capital in the Russian Federation at $2 trillion. This is more than seven times more than the Russian budget for 2015: all its planned expenses will amount to only $0,27 trillion. A quarter of Russian private capital (approximately $0,5 trillion, or two annual budgets of Russia), despite the new cold war between the Russian Federation and the West, is located offshore. Mainly, these are not stocks or bonds, but simply foreign currency accounts.
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Despite Putin’s attempts to “turn the offshore page” until 2019, the volume of Russian capital located offshore will grow by approximately 10,2% annually, analysts at Boston Consulting Group (BCG) predict in the report “World Wealth 2015: How to Ensure growth,” reports RBC. At the beginning of 2015, the volume of private wealth in Russia increased by 24,7% compared to the level of two years ago. Moreover, over the past year, the share of offshore companies has increased by approximately 1,5 times compared to the average level of 2009–2013.
BCG experts believe that Russian business will increasingly move money offshore every year due to political and economic instability, the tense situation in Ukraine, as well as the historical trend of storing assets in offshore jurisdictions. In general, the volume of Russian private capital will increase at an average annual rate of 11,8% and will reach $3,5 trillion by 2019, according to BCG.
All this not only speaks of the collapse of the “deoffshorization of the economy” and “nationalization of the elite” announced by the President of the Russian Federation, but is also an indicator of the expectations of the most influential and informed part of Russian society. Rich and super-rich people, who know first-hand the real situation in the economy and political sphere, and are able to separate reality from propaganda mantras, are clearly betting on the reconciliation of Russia with the West. Moreover, for such reconciliation in which the conflict does not reach the level of mutual confiscation of assets. What the terms of this reconciliation will be, and how this will affect the fate of Crimea and Donbass, one can only guess.
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