For Western companies, the moral, legal, and public relations risks of staying in Russia are huge
The companies that have already left have tended—with good reason—to emphasize the moral risks. McDonalds, for instance, stated, “[O]ur values mean we cannot ignore the needless human suffering unfolding in Ukraine.” And that hasn’t meant abandoning Russian staff; many firms have been providing salary continuations or directly evacuating personnel.
The businesses that are staying might think—or at least tell Western governments—that they can remain separate from Russia’s increasingly unhinged political system. But if they really think that, they’re way off base. Business in Russia is integrating fully into a newly totalitarian system.
Control of the economy has always been a cornerstone of Putinism, but it came slowly in fits and starts. First, the oligarchs were targeted and brought to heel, and the public didn’t mind because the oligarchs were robber barons and hated villains. Yet the situation kept growing more complex. More and more people began ending up in jail for financial crimes as ruthless raids, often led by greedy officials, took over their businesses—as detailed in journalist Peter Pomerantsev’s chilling and brilliant book Nothing Is True and Everything Is Possible: The Surreal Heart of the New Russia.
By the time 2014 rolled around and Russian President Vladimir Putin seized Crimea, the reins began to be tightened in a more systemic manner, as driven by sanctions and growing Kremlin paranoia. Today, Russian officials speak openly of autarky and total state control of any company, foreign or domestic, that rebels against them. This is not realistic in the long term, but for now, the flailing Russian regime will attempt it anyway.
Putin seduced ordinary Russians by promising stability after the chaotic 1990s, and he delivered it. It’s just that his definition of stable is when everything is controlled by him, his friends, and their children. He “conquered” the oligarchs, sure, but for his own benefit.
Putin’s government threw some crumbs to the populace in the course of this conquest—but not out of civic duty. It was done to solidify Putin’s grip on power. Inequality in Russia only grew in the meantime, as an entire generation grew up in the shadow of Putinism—the same generation now being sent to kill and die in Ukraine. And why not? Putin and his circle have only ever viewed their fellow Russian citizens through the prism of disdainful feudalism. [Continue reading…]
A McDonald's in the Russian city of Penza has been given the Z treatment pic.twitter.com/F8KIrwIG8g
— Francis Scarr (@francis_scarr) May 29, 2022