The Kremlin is taking business away from the unwelcome to survive, but it won’t save Russia – Bloomberg

It is noted that business owners are already sounding the alarm.

Russia is seeing a sharp increase in asset seizures, a situation that worsens the prospects for a slowdown in the country’s economy , even as such measures help replenish state coffers.

Bloomberg writes that, according to legal estimates, the total value of confiscated property since 2022 has reached 3.9 trillion rubles, or $49.5 billion. Over the past 12 months, the total value of confiscated assets has tripled .

While 1.5 trillion rubles of the confiscated assets belonged to strategically important enterprises, the rest belong to a wide range of industries and are often sold to new owners, with the proceeds going to the treasury. Lawyers have counted 102 such cases.

The trend toward increased asset confiscation may help strengthen public finances and strengthen state control. However, it weakens economic resilience and devastates the private sector that helped Russia weather the sanctions and shocks following its full-scale invasion of Ukraine.

According to lawyers, the authorities are citing a range of justifications for the confiscation, ranging from problems with how the enterprises were privatized and allegations of corruption to alleged extremism and protecting public interests.

Last year, the federal budget received 132 billion rubles from property sales, far exceeding the target of 1 billion rubles. Most of this amount came from assets confiscated by the Prosecutor General’s Office. Finance Minister Anton Siluanov said in March that he wants to maintain this pace in 2025. In this regard, business owners are sounding the alarm.

Russia’s financial situation is worsening. According to Andrey Yakovlev, an economist and fellow at Harvard University’s Davis Center, falling oil prices and a strengthening ruble threaten to deplete the liquid reserves remaining in the National Welfare Fund by the end of the year.

“This raises the question of how to finance military production and the army – and selling confiscated assets to businessmen linked to the regime becomes a convenient option,” he said.

(C)UNIAN 2025