Invasion in Ukraine: withdrawal of foreign companies greatly affects Russia

In 1990 McDonald’s opened its first store in Puhkin Square in Moscow; However, after 32 years, the franchise announced this week that it will temporarily close its 847 restaurants in Russia, due to the invasion of Ukraine initiated by Vladimir Putin on February 24.

Before this new announcement, McDonald’s joins hundreds of companies that have decided to pause their operations in that country, as detailed BBC World. Due to this situation, various analysts indicate that the Soviet era is returning.

“With the opening of McDonald’s, the West came to Russia; now, with his close, he leaves. The annihilation of Russia continues on all fronts.”said on Twitter Andrei Kolesnikov, president of the Russian National Policy Program at the Carnegie Moscow Center.

Likewise, the professor of political science at the University of Massachusetts AmherstPaul Musgrave, points out that the departure of McDonald’s from Russia means the “closing of an era”. In addition, he indicated that with the blocking of most debit and credit cards “it is very difficult to make payments and repatriate earnings.”

It should be noted that, at the time of the USSR, there were constant shortages and shortages in primary need products and even getting cars, appliances, shoes, books or cosmetics were more difficult.

For its part, the media (newspapers, radio and television stations) received funding from the Russian state, and were controlled by the Communist Party and the secret service.

“The economic blockade devastates everything that has resulted from the efforts of the people during these decades. All the relics of democracy from the 1990s, especially free and quality media, are also being destroyed.”Kolesnikov explained.

These Soviet media had the purpose of transmitting, through propaganda, that the Communist Party was the “only true path” to eradicate Western ideology. However, those dissidents of the socialist system were imprisoned, deprived of their liberty, sent to forced labor camps or suppressed.

Since the Russian invasion began in UkraineRoskomnadzor, the Russian media watchdog, has blocked various independent Russian media. Likewise, a new law would sentence 15 years in prison to those journalists who spread “fake news” what “disgrace” to the Russian army.

In these last days, the Bank of Russia established a limit on cash transactions in foreign currency, making it illegal to buy any currency in Russia. This case is similar to the prohibition of the free exchange of foreign currency that arose in the Soviet Union, where citizens who carried out these acts were imprisoned or sentenced to death.

More companies leaving Russia

They were first Visa and Mastercard -later American Express-, which concentrate the vast majority of electronic transactions in Russia. Afterwards, the domino pieces began to fall one after another.

In addition to McDonald’s, Hundreds of Western companies decided to close, at least temporarily, their operations in the Eurasian country.

This implies that products such as Coca Cola -present in Russia since 1992 and a pillar of the western axis-, stop being marketed in Russian territory, or that those who want to see the contents of Disney, Sony, Warner Bros or Netflix can no longer do it.

Nestlé, Mondelez, Procter & Gamble and Unilever stopped investing in Russiabut said they will continue to provide essential items.

Pepsi, which has been in Russia since the 1970s thanks to the soda’s fascination with Nikita Khrushchev in the mid-20th century and which has a widespread food and beverage industry in the country that is even larger than Coca-Cola, decided to cut the supply of some of its products, but leave other basic necessities such as dairy and baby food.

Apple, Microsoft, Samsung and other tech giants have stopped selling in the country, while DHL, FedEx, Kuehne+Nagel, Maersk and UPS are halting deliveries.

Starbucks, H&M, Louis Vuitton, Chanel and Cartier stores are also part of the exodus. And the Japanese Uniqlo, which had initially said that it would stay, decided in the last few hours to withdraw.

Anna MacDonald, administrator of funds from Amati Global Investorstold BBC Radio 4’s Today program that companies joining the wave of companies leaving Russia were doing so because “shareholders and broader stakeholders would not tolerate continued revenue and profit generation” in that country.