Ukraine’s honest advice to international companies still in Russia – EURACTIV.com

As the exodus of international companies from Russia continues, Nazar Bobitski offers advice to companies still operating in the country, for various reasons.

Nazar Bobitski is Director of European Affairs at the Ukrainian Business and Trade Association (UBTA), representing the voice of Ukrainian exporters to European institutions and in all EU member states. Before the war, Nazar Bobitski headed the European office of the UBTA in Brussels. He is now in Ukraine, working with EU member companies and business associations to support the resilience of the Ukrainian economy.

As the scale of the economic and humanitarian impact of Russia’s war on Ukraine unfolds, an exodus of international companies from Russia, including household names, continues. According to the widely cited count from the Yale School of Management, more than 500 companies have decided to either pull out of Russia or effectively suspend operations.

However, on closer inspection, the picture becomes more nuanced. Yale’s ‘ranking’ reveals categories of companies responding to the ‘Russian challenge’ through a variety of business tactics, ranging from ‘getting by’ (F grade) to ‘saving time’ by withholding new investment (D grade). ), ‘reduce’ by reducing ongoing operations (grade C) or ‘keeping the bridges intact’ by temporarily suspending operations (grade B).

Encouragingly, a good majority of 178 companies managed to make a clean cut in the Russian market, emerging from the class with a solid A rating.

Many companies cite deliberate actions by the Russian government apparently to prevent them from closing their operations in a desperate attempt to stem the exodus. The situation is aggravated by the de facto absence of effective judicial remedies.

Russian courts will not dare to challenge the actions of the Kremlin, the informal bureaucratic obstruction and even the overt threats of FSB agents against the local leadership. For others, the uncertainties of the “fog of war” may give false hope that “the end is in sight”, luring them into a “let it go” strategy and encouraging them to keep a foothold in the Russian market, while that some more conscientious competitors leave.

However, a realistic look at several larger factors and trends at play should be the most explicit warning possible that cutting losses early and getting out is at least a good mid to long-term trading decision.

  1. The maximalist and inflexible attitude of Moscow. The Kremlin dictator’s reluctance to compromise leaves no room for maneuver with kyiv or the collective West. Although difficult to explain from a rational Western perspective, the Kremlin’s position is easier to understand in the dark light of the realities of Russian domestic politics. Moscow’s legitimacy comes not from a popular mandate, regularly contested in free elections, but from a carefully cultivated and fiercely defended image of the regime’s ability to project a solid, unbroken stream of successes and victories. Any compromise settlement will be perceived as a sign of hesitation, weakness, incompetence, immediately calling upon the leader’s ability to lead. This leaves the scheme to double down and raise the stakes as the only alternative available in the vain hope of winning. A smokescreen of “bogus” negotiations maintained by the Kremlin to probe the adversary and fuel doubts in the West should not delude us.
  2. In fact, the deliberate genocidal destruction of civilian lives, property and infrastructure will continue. despite growing international outrage. Partly as a conscious part of Russian military doctrine, partly as a way to vent frustration over military defeats at the tactical level. The medieval horrors of the “ride”, from the time of the Hundred Years’ War, are back in 21st century Europe. They will continue to fuel the hateful determination of Ukrainian society to resist. The government of President Volodymyr Zelenskyy, once elected with an overwhelming majority, will find this impossible, let alone willing to ignore it.
  3. The growing frustration of the West. The anti-Putin coalition led by the US and UK is dismayed by the lack of quick results from the initial barrage of sanctions that will bolster the political will to step up the pressure and expand the sweep. The West will be forced to respond to the Kremlin’s double wager by doubling its own. At the same time, images of Russian atrocities committed with apparent impunity will continue to shatter the pleas and arguments of remaining Putinverstehers.
  4. The abandonment of sanctions is unthinkable as the strategic stakes are too high. Western politicians, especially in Europe, are realizing the potentially catastrophic consequences for strategic stability in Europe if Ukraine is let down or weakened by unilateral territorial or geopolitical concessions just for the promise of a fragile ceasefire. . As Putin has repeatedly made clear in his conflict with Ukraine since the 2014 invasion, breaking treaties and promises to gain advantage is central to Russian strategy. It would be a strategic blunder to waste a window of opportunity to take advantage of the fatal but significant flaws in the Russian military machine exposed by the Ukrainian resistance, of the pitiful dependence of the Russian military-industrial complex on Western high-tech components and know-how – how, now paralyzed by the sanctions. As French Foreign Minister Jean-Yves le Drian stated bluntly at a press conference in Tallinn on April 1, “Russia should not hope to win. The stakes for us are strategic”.

Hopefully these arguments will be heard by international companies. It is also hoped that C-suite leaders will be guided by an inner moral compass once they emerge from the ivory towers of meeting rooms. Photos and testimonies collected by Human Rights Watch and other international human rights organizations from Russian Srebrenica-type war crime sites in towns and villages around Kyiv should help them.