The article discusses the Western Businesses’
increasing concern over their operations in Russia after the country’s
intervention in Ukraine. They have faced crises with Russia over the years, but
this time seems to be different and so uncertain. There are two problems here:
the harder sanctions of other countries imposed on Russia and the Russia’
retaliation against Western interests.
The tension between America and Russia is
escalating as “Russian lawmakers also considered a proposed law allowing for
the confiscation of property, assets and accounts of Western companies” and
“advocated dropping the dollar as a reserve currency and refusing to pay off
Russian loans to American banks.”
What is happening in Russia can really hurt the
global economy and affect multinationals are trying to cope with the situation.
Western executives are thinking about raising the prices to deal with the
inflation and low consumption in Russia, but the likely financial crisis’ impacts
are so unpredictable. Other companies are concerned about their employee’s
safety. Russian companies are also in trouble as well: some of the stocks have
declined sharply.
http://www.nytimes.com/2014/03/08/business/international/western-businesses-in-russia-are-watchful-and-wary.html?_r=0
3 comments:
Companies pulling out of Russia maybe a good idea for them, but it will hurt Russia's economy. Russia is important to may countries in Europe, and companies pulling out of Russia will also hurt Europe.
This is a very difficult situation for the companies operating in Russia and they have to approach it with care. While any conflict with Russia will have significant effect on European and American companies, I believe this has become an issue that is beyond economic interests. It is a standoff between dictatorial regime that occupies independent countries and eliminates any freedom of expression. If this is not what opposes Wests's core values then i don't know what is. My advice would be to pull out of Russia for at least some time, in order to send the message to Russia.
Russia's economy is already struggling. Economic sanctions play a large role in international politics and it will be interesting to see if the international system will be enforcing these sanctions. Russia needs a message to be sent to them, and other than invasion, economic sanctions are a very useful tool. I agree with Nazar and believe that American companies to pull out of Russia and business should be paused within Russia.
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