Will international companies do business with Russia? No:
- Most multinational companies can live without Russian customers. About 400 companies have announced their withdrawal from Russia cowed by legal and reputational risks.
- Executives now face a different, bigger challenge. This concerns not their business within Russia but supply chains that extend beyond it.
- Leaving Russia makes it difficult to return. Shutting down plants, offices and supply chains is complicated and expensive.
- Even without formal sanctions on most of Russia’s commodities, Western traders are increasingly trying to avoid them, wary of legal risks.
It’s complicated:
- There are two factors that make the shock to supply chains particularly difficult for firms to manage. The first is the breadth of commodities produced by Ukraine and Russia. The second complicating factor is the market’s extraordinary swings.
- Russia’s war is creating corporate winners and losers
- As the costs of inputs (oil, gas) continue to climb, it looks increasingly likely that companies will be forced to choose between compressing profits and depressing demand.
- Governments should lead in punishing Russia, not businesses. Business will follow the regulations that governments decide to impose – or not – on Russia
- In Light of Russia Sanctions, Consider Your Conditions for Doing Business in Other Countries
- These companies continue to do business in Russia
- Are Big Businesses In or Out of Russia?
- How Europe’s commodities traders took a gamble too far on Putin’s regime
- Russia’s war is creating corporate winners and losers
Russia’s major industries are machinery construction, chemicals, energy (oil and gas), and agriculture.
Before the war, international consultancy Schneider Group listed at least 5 reasons to invest in Russia:
- Favourable conditions for investors (low taxes, government incentive programs, special economic zones)
- Geographic bridge between EU and Asian markets
- Low cost inputs (raw materials, labor, energy)
- High domestic demand for foreign goods and services
- 31st out of 190 countries in the 2019 World Bank Ease of Doing Business Ranking
UKRAINE IN FLAMES project is created by Ukraine Crisis Media Center, Ukrainian Catholic University’s analitical center and NGO “Euroatlantic Course”. We are aiming at searching a loud support for Ukraine in the war started by Russia on the 24th of February 2022.
If you want to support Ukraine against Russian aggression, check the link with recommendations by Ukraine Crisis Media Center – https://uacrisis.org/en/help-ukraine.
NGO Euroatlantic Course collects donations to support Ukrainian Army and civilians – https://eac.org.ua/en/main-page/.
