Posted on Mar 12, 2022
An economic iron curtain is falling on Russia as companies like McDonald's cut ties
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https://www.npr.org/2022/03/12/ [login to see] /iron-curtain-russia-soviet-union-mcdonalds-ikea-pepsi
A pivotal chapter in Russia's recent history is coming to an end as many of the world's largest and best-known companies abandon Russia after the country's invasion of Ukraine.
It started in part with BP announcing late last month that it would end its multi-billion dollar relationship with Rosneft, the Russian oil giant.
But what started as a trickle has become a corporate exodus. This week alone, companies ranging from Coca-Cola to Goldman Sachs have announced they are cutting their ties with Russia.
A pivotal chapter in Russia's recent history is coming to an end as many of the world's largest and best-known companies abandon Russia after the country's invasion of Ukraine.
It started in part with BP announcing late last month that it would end its multi-billion dollar relationship with Rosneft, the Russian oil giant.
But what started as a trickle has become a corporate exodus. This week alone, companies ranging from Coca-Cola to Goldman Sachs have announced they are cutting their ties with Russia.
An economic iron curtain is falling on Russia as companies like McDonald's cut ties
Posted from npr.org
Russia
The Coca-Cola Company
Posted 2 y ago
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PO1 William "Chip" Nagel
..."The Russian economy will be impacted in other ways
Russia's isolation also raises other big challenges to its economy.
"It's not just the question of statistics of the economy shrinking a couple percentage points, or inflation going up a couple of percentage points," says Chris Miller, an historian at The Flectcher School at Tufts University. "The rapid de-globalization of the Russian economy that was built over almost a third of a century is being reversed in just a matter of a couple of weeks."
Russia has come to rely heavily on imports.
In the third quarter of 2021 — the most recent quarter for which data are available, the country imported around $77 billion worth of goods, according to data from the Bank of Russia, its central bank.
The presence of foreign companies brought a lot of new technology and expertise, and Russian firms have become closely integrated with global supply chains.
And just like in the Soviet days, the domestic industry is not evolved enough to step up.
"Russia's entire industrial economy is going to face wrenching difficulties as they try, and in many case fail, to find alternatives to Western products," Miller says.
"Russia has gotten access to foreign consumer goods, and also a lot of technology and expertise from Western firms," he adds. "All that has been thrown into a very rapid reverse."
..."The Russian economy will be impacted in other ways
Russia's isolation also raises other big challenges to its economy.
"It's not just the question of statistics of the economy shrinking a couple percentage points, or inflation going up a couple of percentage points," says Chris Miller, an historian at The Flectcher School at Tufts University. "The rapid de-globalization of the Russian economy that was built over almost a third of a century is being reversed in just a matter of a couple of weeks."
Russia has come to rely heavily on imports.
In the third quarter of 2021 — the most recent quarter for which data are available, the country imported around $77 billion worth of goods, according to data from the Bank of Russia, its central bank.
The presence of foreign companies brought a lot of new technology and expertise, and Russian firms have become closely integrated with global supply chains.
And just like in the Soviet days, the domestic industry is not evolved enough to step up.
"Russia's entire industrial economy is going to face wrenching difficulties as they try, and in many case fail, to find alternatives to Western products," Miller says.
"Russia has gotten access to foreign consumer goods, and also a lot of technology and expertise from Western firms," he adds. "All that has been thrown into a very rapid reverse."
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