Vodka, yachts and Russia’s oligarchy

As Russia’s war against Ukraine rages on, we continue to see heartbreaking images families torn apart by the conflict; women and children trying to stay alive in bunkers; an opera house destroyed by bombs; hundreds injured or dead; and a whole lot of chaos and madness.

Amidst the human toll, Russia’s oligarchs are feeling the heat of their decades- long cozy relationship with their president Vladimir Putin as the West imposes sanctions on just about anything and everything connected to Russia -- from vodka to yachts owned by Russia’s oligarchs.

It’s no wonder Vagit Alekperov, president of Moscow-headquartered energy company Lukoil, is sailing his sprawling yacht -- with a pool and helipad -- to Montenegro from Barcelona, according to CNBC.

The yacht of another oligarch Oleg Deripaska departed Sri Lanka two weeks ago for the Maldives.

Even a yacht named Graceful, said to belong to Putin, hurriedly left a port in Hamburg before finishing repairs, according to the Business Insider.

Bernie Sanders tweeted: “Putin, a multi-billionaire, is the poster boy for greed and oligarchy. Maybe, before starting a war that could kill thousands and displace millions, he might worry more about the people of Ukraine and Russia, and less about his precious super-yacht.”

The oligarchs fear the US and Europe might seize the yachts and all their assets in the West.

The US Department of the Treasury has, likewise, imposed expansive economic measures on Russia’s largest financial institutions, crippling their ability to raise capital. Such actions also target nearly 80 percent of all banking assets in Russia and will have a deep and long-lasting effect on the Russian economy.

“Treasury is also sanctioning additional Russian elites and their family members and imposing additional new prohibitions related to new debt and equity of major Russian state-owned enterprises and large privately owned financial institutions...These actions are specifically designed to impose immediate costs and disrupt and degrade future economic activity, isolate Russia from international finance and commerce, and degrade the Kremlin’s future ability to project power.”

The Treasury is particularly taking unprecedented action against Russia’s two largest financial institutions, Sberbank and VTB Bank, drastically altering their fundamental ability to operate. The US Treasury said 80 percent of the $46 billion worth of daily foreign exchange transactions of Russia’s banks are in US dollars. Thus, the majority of those transactions will now be disrupted.

Impact on Philippine businessmen

These sanctions will also affect Philippine businessmen, especially those with plans to expand in Russia.

Businessman Roberto De Venecia, who has led business delegations to Russia as chairman of the Philippines-Russia Business Council (PRBC) for instance, said the VTB Group earlier expressed interest to support a major infrastructure group in the Philippines for LNG and a Philippine-owned ports business, earlier eyeing to operate in Russia and some territories in the former USSR.

These plans, an offshoot of Duterte’s visit to Moscow in 2017, were derailed because of the pandemic, De Venecia said. But it’s not over, he said.

Those plans may still be realized with the full and consistent support of the Philippine government and the Embassy in Moscow. “Hopefully the incoming leadership in the Philippines will help in creating new and pioneering opportunities for Filipinos,” he said.

But for now, this is the situation, with the West firmly standing up to a bully. History will judge today’s superpowers whether or not these actions will create a bigger monster, but for now these are deemed necessary if only to stop Putin’s war.

There are other measures, including calls to boycott Russian vodka, beers, and other products.

Waltzing with dictators

Everyone can learn from the situation Russia’s oligarchs are now finding themselves in. There are lessons to be learned for the world’s richest, including the very wealthy in our country today -- that nothing lasts forever and that those who cozy up to dictators, autocrats, and tyrants will one day pay the price.

Acer founder Stan Shih on technology entrepreneurship

Speaking of businessmen, but on a more positive note, I’ve been reading a compilation of lectures by Acer founder Stan Shih.

In the small, easy-to-read book, From Cool Tech to Hot Startups, narrated by veteran business journalist Roel Landingin, Shih recounts his experiences on building successful businesses by tapping technological innovation. Acer, the Taiwanese computer giant, is one such company. Shih delivered 20 lectures at the Asian Institute of Management (AIM) from May to December 2019, with each session attended by students and participants interested in technology entrepreneurship.

The book, published by AIM, gives readers a glimpse of Shih’s mind; how Acer started; his guiding philosophy in life and in business; what real innovation is for him; how to deal with crises; what skills you need as an entrepreneur and the importance of giving back to society.

Wangdao

I particularly like Shih’s Wangdao principles of shared prosperity, partly in reaction to what he believes is Western capitalism’s “winner takes all” attitude.

The three core values of Wangdao are value creation, balance of interests and sustainable development, challenging the West’s notion that corporations exist to serve the interest of shareholders, something we’re also seeing in a lot of Philippine corporations today.

It’s an informative book that I’m sure will help Filipinos navigate the world of entrepreneurship.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com