Transformation of Business-State Relations in Russia: Statist War Economy, De-Globalization, and Replacement Oligarchy

The war in Ukraine has profoundly altered business-state relations in Russia, shifting them away from kleptocratic crony capitalism toward economic statism and the virtual subjugation of business elites to the state's strategic priorities. Prior to the war, Russian business elites operated under a system of preferentialism, benefiting from state protection and lucrative contracts in exchange for political loyalty. However, the war has created both new opportunities (war-related contracts, import-substitution subsidies, and redistribution of foreign- owned assets) and devastating losses (loss of access to global markets, macroeconomic instability, and growing state repression). Many business elites have fled, adapted, or been coerced into compliance through state pressure. Following the onset of war, the collective voice of the business community was swiftly neutralized by the Kremlin and the state engaged in unprecedented asset redistribution in an effort to build a loyal "replacement oligarchy." As a result, the Russian state has deprioritized elite business interests in favor of war mobilization and mass control, signaling a decisive shift toward a more repressive, state-dominated economic model where oligarchs are subordinated to the imperative of regime survival.