Russia earns $1.25bn from companies that left its market
Russian leader Vladimir Putin dictates the terms of exit for companies that don't want to do business in Russia. As a result, the country has earned at least USD 1.25 billion
This is reported by Globo.
The Russian dictator was able to take advantage of the withdrawal of Western companies from Russia and turned this process into a "gold mine". He sets conditions for them that are favourable to his government and elites.
Since the start of the full-scale invasion, hundreds of companies have announced that they are leaving the Russian market. At the time, politicians predicted that this would undermine the Kremlin's power and "suppress" the aggressor's economy.
However, the article says that Putin has turned this situation to his own advantage. He forces companies leaving Russia to pay low prices for the sale of their businesses, or sometimes simply seizes their property.
According to the New York Times, companies that have announced their withdrawal from Russia have declared more than $103 billion in losses since 24 February 2022.
At the same time, Putin has imposed ever-increasing taxes on these withdrawals. This has added at least $1.25 billion to the Russian military treasury.
"Putin is squeezing out as much of these funds as possible from companies, dictating the terms of their exit," the article says.
However, even under these conditions, the deals are not safe. For example, Heinken, a Dutch beer company, found a buyer last spring and set a price. However, according to the NYT, the Russian government unilaterally rejected the deal, transferring the Russian assets to a local loyal producer.
"In all, Mr Putin has overseen one of the largest transfers of wealth within Russia since the collapse of the Soviet Union. Huge industries - elevators, tyres, industrial coatings, etc. - are now in the hands of Russian players who are becoming increasingly dominant," the article noted.
- As of February 2023, 9% of almost 1,500 global companies had left the Russian market, as stated by Mykhailo Podolyak, Advisor to the Head of the Presidential Office.