tayaread.blogg.se

In other words, they’ve chosen to take their losses now. It’s like they’re imposing sanctions on themselves. They’re cancelling orders, voiding contracts, halting deliveries, leaving behind assets they may never be able to reclaim, and generally making expensive corporate decisions that will not easily be reversed.

The invasion of Ukraine has been the last straw for a lot of companies, and they’re pulling out of Russia in droves. You can’t help but feel that Putin has fouled his own nest.īecause beyond his warped strategy, beyond his warped vision of a warped Russia that exists only in his warped imagination, he has convinced western companies to do what they might have eventually done anyway - take their business elsewhere. This is not the best platform from which to wage war on a neighbor, especially one as resourceful and determined as Ukraine. Russian consumerism depends heavily on foreign goods and services, which makes it more vulnerable to the outside world than most Russians are comfortable with. The corruption embedded in the system stifles innovation, balloons development costs, and strangles in its infancy any product that might compete in global markets. They can’t export much else because they don’t make much else that the world wants. To this day, the exploitation of natural resources remains roughly 60 percent of Russian exports. Russia pays for its consumer goods largely with exports of oil and natural gas. A vibrant but fragile consumer culture now exists in Russia, and Russians will dearly miss it when it’s gone. Trump’s incompetence was the best thing about him.īut even with all the obstacles thrown in the path of western companies, Russian consumers remained interested in buying their products. Trump, not surprisingly, failed to do that.

One of the most important tasks assigned to Donald Trump by Putin was the swift repeal of the Magnitsky Act. So angry, they went out of their way to subvert an American election and get a Russia-friendly puppet elected president.

The Magnitsky Act and its associated sanctions hit Putin and his oligarchs where it hurt, and they’re still angry about it. government to sanction any foreign actor implicated in human rights abuses, anywhere in the world. This ultimately resulted in the Magnitsky Act, which allows the U.S. He died in prison of untreated pancreatitis.īut unlike others who had similar stories, Browder had the political juice to bring this sordid episode to the attention of the U.S. An entire billion-dollar company and all its assets were simply confiscated by the government, on the flimsiest of pretexts, forcing Browder himself to flee Russia, one step ahead of the posse.īrowder’s Russian lawyer, Sergei Magnitsky, was subsequently arrested, beaten, tortured, and denied medical care. He was once the largest foreign portfolio investor in Russia, until his private equity fund, Hermitage Capital, was literally stolen out from under him. Some rolled with the system and achieved real success.īut it was never easy or straightforward, and as Putin amassed more and more power, it became clear that he was putting a much more cynical - and sinister - system in place.īill Browder saw this first-hand. It's hard to stay within those rules and still turn a profit, and a lot of American companies left Russia in frustration. So Americans in Russia - and in other notoriously corrupt countries - couldn’t just pay the bribes and hide them under miscellaneous expenses. The Foreign Corrupt Practices Act (FCPA) - enacted in 1977, but previously under-enforced - made those bribes and kickbacks illegal under American law. Justice Department was cracking down on that sort of thing. For those intrepid American companies looking for a foothold in Russian markets, corruption became a cost of doing business - a line item in the budget - and a huge drag on the balance sheet.Īnd this was just as the U.S. Bribery, extortion, protection rackets, government kickbacks, property seizures, and a robust organized crime community, all do their part in keeping the playing field permanently askew. Graft has always been baked into the Russian business culture. Progress was absurdly slow, mostly because the Russians themselves made nothing easy. But by 2001, when Vladimir Putin first emerged on the world stage, the results for American and other western companies were largely disappointing.