Western sanctions do not allow Russian millionaires to leave and push them closer to Putin - analysts
A record number of rich people left Russia, but this figure is less than predicted
Russia became the leader in the outflow of millionaires from the country in 2022, but due to sanctions, the number of wealthy emigrants was almost half as much as predicted.
Source. This is stated in a report by the British consulting company Henley & Partners, created in conjunction with New World Wealth.
Analysts expected that at least 15,000 millionaires (about 15% of their total number at the end of 2021) would leave Russia amid the war in Ukraine, and the country would rank first in this indicator.
However, by the end of 2022, 8.5 thousand millionaires emigrated from Russia, 43.4% less than expected.
"The decrease in the projected figures was influenced by both sanctions measures (for example, the closure of many investment citizenship and residency programs for Russians, the closure of foreign bank accounts) and the country's mechanisms that made it difficult for prominent wealthy people to move," H&P explained.
After being sanctioned, many wealthy Russians continued to receive dividends from their companies, but they had to channel these funds to the domestic market, Bloomberg wrote. For example, five Russian billionaires, including Vladimir Potanin, Leonid Mikhelson, and Gennady Timchenko, received more than $10 billion in dividends.
"Western sanctions have essentially closed the door on Russian billionaires and pushed them even closer to the Kremlin. This increases Russia's control over their funds and supports Putin's calls for them to invest in Russian businesses," said Liana Semchuk, an analyst at the British consulting firm Sibyline.
However, in terms of the outflow of wealthy people, Russia is second only to China, which lost 10,800 millionaires last year. The top 10 also includes:
- India (7.5 thousand)
- Hong Kong (2.4 thousand)
- Brazil (1.8 thousand)
- Great Britain (1.6 thousand)
- Mexico (800)
- South Korea and South Africa (400).
In 2022, the largest number of wealthy people moved to the United Arab Emirates (5.2 thousand), Australia (3.8 thousand), Singapore (2.9 thousand), Switzerland (2.2 thousand), and the United States (1.5 thousand).
In 2023, another 3,000 millionaires may leave Russia, according to H&P.
Background. As a reminder, Russians bought a record amount of real estate in Dubai in 2022.
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