Russia’s Great Reversal: The New Wave of Nationalisations

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By Matthew Parish, Associate Editor

Tuesday 7 July 2026

The privatisations of the 1990s were once regarded as one of the defining features of post-Soviet Russia. Vast industrial empires, ports, airports, banks, mines and manufacturing companies passed from state ownership into private hands, often in chaotic circumstances and at prices that bore little resemblance to their intrinsic value. Whatever their flaws, those reforms created an economic settlement that endured for more than three decades. Today that settlement is being dismantled.

Since the full-scale invasion of Ukraine in February 2022, the Russian state has embarked upon the most extensive programme of asset seizures since the collapse of the Soviet Union. Initially directed at foreign-owned businesses leaving the Russian market, the campaign has steadily expanded to encompass Russian-owned companies, many of whose owners have lived abroad, possess dual citizenship or simply control assets the Kremlin now regards as strategically indispensable. What began as an emergency wartime measure has evolved into a comprehensive restructuring of Russian capitalism.

The methods employed are strikingly modern while the underlying philosophy is unmistakably historical.

Rather than issuing outright decrees of confiscation, prosecutors reopen privatisation agreements concluded decades earlier, alleging procedural defects, corruption, breaches of constitutional requirements or threats to national security. Courts then declare previous ownership invalid and transfer the assets to the Federal Property Agency or another state institution. Formally, everything occurs through judicial process. Substantively, ownership changes because political priorities have changed.

Several recent cases illustrate both the breadth and the consistency of the campaign.

Perhaps the most prominent has been the seizure of Moscow’s Domodedovo Airport, historically one of Russia’s largest privately owned airports. Prosecutors argued that its owners’ foreign citizenships rendered the airport vulnerable to external influence, making private ownership incompatible with national security. A Moscow court ultimately transferred ownership to the state before the airport was later sold to another state-aligned operator, illustrating that nationalisation frequently serves as a mechanism for reallocating assets within a politically trusted circle rather than for establishing permanent bureaucratic management.

The logistics sector has experienced similar intervention. The warehouse operator Raven Russia, controlling millions of square metres of strategically important storage facilities across the country, was likewise transferred into state ownership. Modern warfare depends as much upon logistics as upon weapons production, and warehouses, freight hubs and distribution networks increasingly form part of Russia’s national security infrastructure.

Agriculture, too, has become subject to state intervention. The grain exporter Rodnye Polya became another high-profile target, reflecting the Kremlin’s determination to exercise tighter control over food exports, foreign currency earnings and supply chains that have become strategically important during wartime.

Other sectors have experienced comparable treatment. Oilfield services, chemical production, metallurgy, machine building and transport infrastructure have all witnessed expanding state influence. Some foreign-owned companies abandoned by Western investors have effectively been transferred into Russian state management before being sold to politically acceptable purchasers. Others have remained under direct state administration. The distinction between temporary management and permanent nationalisation has become increasingly difficult to discern.

Several powerful motivations underpin this transformation.

The first is fiscal necessity.

Wars consume capital with extraordinary speed. Military procurement, defence industrial expansion, soldiers’ salaries, compensation payments, reconstruction, intelligence operations and domestic security all require sustained financial resources. Although Russia continues to earn substantial export revenues from hydrocarbons and raw materials, sanctions have increased transaction costs while restricting access to international finance. Acquiring profitable domestic enterprises provides both immediate assets and long-term revenue streams. Prosecutor General Igor Krasnov has stated that assets worth approximately 2.4 trillion roubles have already been transferred to state ownership through these legal proceedings.

Secondly, the Russian leadership increasingly views strategic industries through the lens of national mobilisation.

In peacetime, airports facilitate tourism. During war, they become strategic transport hubs. Warehouses become military logistics centres. Grain traders become instruments of geopolitical influence. Machine-building plants become defence suppliers. Even apparently civilian infrastructure acquires military significance. As the distinction between civilian and defence economies narrows, the state correspondingly narrows its tolerance for independent ownership.

Thirdly, nationalisation serves an unmistakable political function.

The oligarchic settlement established under President Vladimir Putin rested upon a relatively simple bargain. Wealth could be accumulated provided political loyalty remained unquestioned. Today’s settlement differs in an important respect. Loyalty alone no longer guarantees security of ownership. Assets themselves are becoming contingent privileges rather than permanent rights. Every major entrepreneur understands that property can now be revisited through the courts should political circumstances require it.

This dramatically alters business incentives.

In normal market economies, entrepreneurs seek innovation, productivity and customer satisfaction. In systems where ownership depends substantially upon political confidence, entrepreneurs devote increasing attention to cultivating official relationships, avoiding political controversy and aligning commercial decisions with government priorities. The allocation of effort gradually shifts from markets towards ministries.

The consequences for investment are profound.

Domestic investors naturally hesitate before committing capital to projects whose ownership may later be questioned under evolving legal theories. Foreign investors confront an even more difficult calculation. The seizure of Western-owned assets following sanctions was widely anticipated. The extension of similar principles to Russian-owned companies sends a broader message—that no ownership structure is entirely immune from reconsideration if strategic or political circumstances change.

There is also an institutional consequence that receives less attention.

Modern economies depend upon credible property rights rather than merely written legislation. Investors need confidence that today’s legal framework will remain substantially recognisable tomorrow. Once courts become instruments for retrospective redistribution of assets, legal certainty diminishes. Contracts become less valuable because political discretion ultimately supersedes commercial agreement.

This does not necessarily imply imminent economic collapse.

Russia retains formidable advantages. It possesses immense natural resources, highly educated engineers, substantial industrial capacity and continuing trade relationships across Asia, the Middle East and parts of Africa. State-led economies are perfectly capable of sustaining military production and maintaining macroeconomic stability for extended periods, particularly where abundant commodity exports provide external revenue.

The more subtle costs accumulate over time.

Innovation flourishes where entrepreneurs can expect to retain the rewards of successful risk-taking. Productivity improves where management appointments depend upon competence rather than political confidence. International investment expands where courts are regarded as impartial arbiters rather than instruments of state policy. Nationalisation weakens each of these conditions incrementally rather than catastrophically.

An additional feature of the current campaign deserves particular attention.

Many seized assets have not remained in direct government ownership. Instead they have been transferred or sold to corporations and businessmen whose political reliability is well established. This suggests that the Kremlin is not attempting to recreate the Soviet command economy. Rather, it is constructing a different model—one in which private enterprise continues to exist but increasingly functions within a tightly supervised political framework. Capitalism survives, but only within boundaries defined by the state.

This represents a distinctive form of wartime state capitalism.

The private sector remains active. Markets continue to operate. Companies still compete, innovate and seek profits. Yet the state increasingly reserves the authority to determine who may own strategically significant assets and under what conditions. Ownership has become conditional upon continued political compatibility.

History suggests that such systems are capable of remarkable resilience during periods of national mobilisation. They are generally less successful in generating the long-term innovation, entrepreneurial confidence and institutional predictability that underpin sustained economic growth after crises have passed.

The great irony is impossible to ignore. The Russia that emerged from the Soviet Union was defined by privatisation. The Russia that has emerged from the war in Ukraine is increasingly defined by its reversal. Three decades after the great transfer of assets from the state to private hands, the pendulum has begun to swing decisively in the opposite direction.

Whether this proves a temporary wartime phenomenon or the foundation of a permanently restructured Russian political economy remains uncertain. What is already clear is that the relationship between property and power has fundamentally changed. In modern Russia, ownership is no longer guaranteed principally by law. It is guaranteed by political confidence—and that confidence can be withdrawn as swiftly as it is granted.