Russia changed after 3 months of war with Ukraine?

But just a few days later, “war” began knocking on Russia’s door, not with mortars or cruise missiles, but with unprecedented sanctions that the West had inflicted on the country.

Many businesses fled

According to AP news agency, 3 months since the conflict with Ukraine broke out, many Russians are struggling with economic difficulties. Large shopping centers in the capital Moscow became deserted, with a series of Western shops and restaurants shutting down.

The famous fast food brand McDonald’s, which was once a cultural phenomenon in Russia when it opened its first store in 1990, has now completely withdrawn from the country in response to the military campaign in Ukraine.

Furniture maker IKEA – the epitome of modern conveniences at affordable prices, has also suspended operations in Russia, causing dozens of jobs to “evaporate” in a short time.

Many other large industrial companies from the West, including oil and gas “giants” such as BP, Shell, or the French car manufacturer Renault, are determined to “give up”, regardless of the costs. many losses due to strong investment in the Russian market.

As for Russians, moving abroad is now much more difficult than before, when 27 countries of the European Union (EU), along with the US, UK and Canada have all banned flights. fly to and from Russia. The Estonian capital Tallinn, which took only an hour and a half by plane from Moscow, was suddenly extended to at least 12 hours and had to undergo a transit in Istanbul (Turkey).

Even indirect “travel” via the Internet and social networks in Russia presents a challenge, as the Moscow government in March banned access to Facebook and Instagram and blocked access to media websites. foreign.

The consequences have not yet been revealed

In the early days when the war in Ukraine broke out, the ruble lost only half its value, even rising to a higher level than before February 24 thanks to the efforts of the Russian Government.

But according to Chris Weafer, a veteran Russian economic analyst at the business strategy consulting firm Macro-Advisory, in economic terms, “it’s a completely different story.”

“We see the current downturn in the Russian economy across a range of sectors. Chinese companies are warning that they are running out of spare parts in stock. Many companies only allow part-time workers, while others run the risk of being shut down altogether,” Weafer told the AP. “So there is really a fear that unemployment in Russia will increase in the summer months, while consumption levels and retail sales and investment will plummet.”

According to the Wall Street Journal, the sanctions are likely to push the Russian economy into a deep recession, putting more pressure on domestic businesses. The International Monetary Fund estimates that Russia’s gross domestic product will shrink 8.5% this year, the deepest since the early 1990s.

Chris Weafer said that, although the ruble is still relatively strong, but its appreciation also causes many problems for the Russian state budget.

“Russia still effectively receives revenue in foreign currency from exporters and their payments in rubles. So the stronger the ruble, the less money they spend,” he said. “However, it also weakens the competitiveness of Russian exporters, as their goods become more expensive on the world market.”

The longer the conflict drags on, the more companies can withdraw from Russia, but according to Weafer, companies that have suspended operations in Russia can still resume business if Moscow can reach a truce and bring it back. peace for Ukraine. However, the probability of this happening is actually very low.

“If you walk around the shopping centers in Moscow, you can see many fashion stores, Western business groups simply lower the shutters. Their shelves are still full, the lights are still on, they just don’t open the door,” he revealed. “The reality is they haven’t really left yet, just waiting to see what happens next.”

This expert also believes that these companies will soon have to solve the dilemma that their business establishments in Russia are facing. “We are now reaching a stage where companies are starting to run out of time, even patience,” he said.

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