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Distribution of wealth? Report says Russia lags

FILE In this June 16, 2008 file photo Russian tycoon Mikhail Fridman speaks at a news conference in Moscow. Russian tycoon Mikhail Fridman on Monday M...
In this June 16, 2008 file photo Russian tycoon Mikhail Fridman speaks at a news conference in Moscow. A report says that 35 percent of Russia's wealth is owned by just 110 billionaires.Alexander Zemlianichenko / ASSOCIATED PRESS

It's enough to make communist icons Marx and Lenin spin in their graves.

A staggering 35 percent of household wealth in Russia -- where the 1917 communist revolution spawned the Cold War for much of the 20th Century -- is owned by just 110 people.

That makes it the highest level of inequality in the world barring a few small Caribbean islands, a report by a major investment bank said on Wednesday. 

By contrast, billionaires worldwide account for just 1-2 percent of total wealth, Credit Suisse said in its report. Russia has one billionaire for every $11 billion in wealth while in the rest of the world there is one for every $170 billion. 

The fall of communism in the 1990s saw Russia's most prized assets, such as mineral deposits and energy sources, sold off to a small circle of businessmen later known as oligarchs. President Vladimir Putin allowed them to keep their wealth in exchange for political loyalty. 

Metals and banking tycoons Vladimir Potanin and Mikhail Fridman, who made their fortunes in the 90s, are still high on the list of Russia's richest men. But the past decade saw a rise of new billionaires who draw their wealth from state contracts and some of whom are known to be the presidents' friends, like Gennady Timchenko. 

Credit Suisse said that there were hopes with the demise of the Soviet Union that Russia would turn into a highly skilled economy with fair wealth distribution but "this is almost a parody of what happened in practice." 

The 35 percent of wealth that Russian billionaires own is equivalent to $420 billion. 

"Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires," the bank's report said.