In today's #vatnik soup I'll talk about sanctions and business in Russia. Most of the data and discussion points come from recently published work titled "Less than Nine Percent of Western Firms Have Divested from Russia" by Evenett & Pisani.
1/17
In my previous soup, I have written how the Western sanctions are circumvented in Russia. The most common method for this is using third party countries for importing products. Especially Eurasian countries such as Kazakhstan are common import points for Western products.
2/17
Russia has also made "parallel import" legal, which means that almost any product can be imported to Russia without the permission of the trademark owner. The problem with this is that these products have no guarantee.
3/17
But most companies don't even have to resort to this type of tactics - they simply continued business in Russia as usual. The study looked at around 1400 companies whose headquarters are located in the G7 or in the EU. Out of these, only 8,5% have actually left Russia.
4/17
One of the authors, Evenett, commented that this type of voluntary actions to leave a market often work poorly, and that similar results were observed in South Africa during the apartheid. The sole purpose of many companies is to make money without moral judgment.
5/17
Also, Putin's regime hasn't made the leaving easy. If the company wants to sell their production lines, factories, warehouses, etc., they'll have to find a buyer who's prepared to pay a high enough price.
6/17
The time span for this payment can range from one to two years, and the Russian government can also obstruct these sales or even prevent transfer of proceeds abroad, making these deals extremely challenging and time-consuming.
7/17
But many companies have probably decided to stay simply out of greed: when most of your competitors leave the market, business can be extremely lucrative. These companies and their owners don't care about filling the Russian war coffin, they just want to make an easy buck.
8/17
Some well-known companies that are continuing business-as-usual in Russia are Benetton (Italy), Clarins (France), Lacoste (France), Match Group (US), Raiffeisen Bank International (Austria) and Liebherr (Switzerland).
9/17
Many companies, like the Austrian Red Bull GmbH, have also "suspended new investments" in Russia, which for most consumer products means business-as-usual, as they didn't even have any production capabilities in Russia and are focusing solely on the wholesale market.
10/17
Yale University has published similar studies, and they have a website where people can check whether a company still has activity in Russia. They use a categorization of four distinct categories: "stay," "wait," "leave," and "exited". som.yale.edu/story/2022/ove…
11/17
Some countries that have over representation among the companies that remained, include Germany, Italy and Cyprus. 250 German companies remain in Russia. For the Cypriot companies, this number is 211, for the US 159, for Japan 90 and for Italy 81.
12/17
Only 14 German and 9 French companies have exited the Russian market. A total of 15 companies from Finland have left Russia, and most of the rest are in the process of leaving, but Russian authorities are making this exceedingly difficult.
13/17
Finland has also stopped admitting tourist visas to Russians, which has led to an interesting scheme that involves Norway and the Schengen agreement. Groups of cars from Russia arrive to Näätämö, Northern Finland via the Storskog border station in Norway to buy tax-free...
14/17
... groceries and so-called luxury products from Finland. The Schengen agreement allows them to come from Norway to Finland freely. One of the local stores in Näätämö stopped selling products tax-free already in Spring, 2022, but another store sells them as usual.
15/17
The store owner has stated that the responsibility falls on the state, not on him. Since these tax free purchases can't exceed 300 EUR, the Russians have recruited "babushka mules" ("kilomummo" in Finnish) to cross the border and buy more products for them.
16/17
These "babushkas" also get around 20 EUR shopping money for themselves. The most commonly bought products are chocolate, cheese, coffee, children's clothing, vitamins and Kuoma winter boots. These products are then often sold online or in stores for a hefty profit.
In today’s Vatnik Soup, I’ll cover the autocratic concept of “Good Tsar, Bad Boyars”: the idea that the leader is wise and just, but constantly sabotaged by corrupt advisors. This narrative shields the ruler from blame, and it’s used by both Putin and Trump today.
1/20
The phrase “Good Tsar, Bad Boyars” (Царь хороший, бояре плохие), also known as Naïve Monarchism, refers to a long-standing idea in Russian political culture: the ruler is good and benevolent, but his advisors are corrupt, incompetent and responsible for all failures.
2/20
From this perception, any positive action taken by the government is viewed as being an accomplishment of the benevolent leader, whereas any negative one is viewed as being caused by lower-level bureaucrats or “boyars”, without the approval of the leader.
In today’s Vatnik Soup, I’ll introduce a Russian politician and First Deputy Chief of Staff of the Presidential Administration of Russia, Sergey Kiriyenko. He’s best known for running both domestic and foreign disinformation and propaganda operations for the Kremlin.
1/20
On paper, and in photos, Kiriyenko is just as boring as most of the Kremlin’s “political technologists”: between 2005-2016 he headed the Rosatom nuclear energy company, but later played a leading role in the governance of Russia-occupied territories in Ukraine.
2/20
What is a political technologist? In Russia, they’re spin doctors & propaganda architects who shape opinion, control narratives, and manage elections — often by faking opposition, staging events, and spreading disinfo to maintain Putin’s power and the illusion of democracy.
Let me show you how a Pakistani (or Indian, they're usually the same) AI slop farm/scam operates. The account @designbonsay is a prime example: a relatively attractive, AI-generated profile picture and a ChatGPT-style profile description are the first red flags.
1/5
The profile's posts are just generic engagement farming, usually using AI-generated photos of celebrities or relatively attractive women.
These posts are often emotionally loaded and ask the user to interact with them ("like and share if you agree!").
2/5
Then there's the monetization part. This particular account sells "pencil art", which again are just AI-generated slop.
In today’s Vatnik Soup, I’ll introduce an American lawyer and politician, Mike Lee (@BasedMikeLee). He’s best-known for opposing the aid to Ukraine, undermining NATO by calling the US to withdraw from the alliance, and for fighting with a bunch of braindead dogs online.
1/21
Like many of the most vile vatniks out there, “Based Mike” is a lawyer by profession. He hails from the holy land of Mormons, Utah, where he faces little political competition, allowing him to make the most outrageous claims online without risking his Senate seat.
2/21
Before becoming a senator, Mike fought to let a nuclear waste company dump Italian radioactive waste in Utah, arguing it was fine if they just diluted it. The state said no, the public revolted, and the courts told poor Mikey to sit down.
In today’s Vatnik Soup, I’ll introduce an American national security policy professional and the current under secretary of defense for policy, Elbridge Colby (@ElbridgeColby). He’s best-known for fighting with cartoon dogs online and for halting military aid to Ukraine.
1/21
Elbridge "Cheese" Colby earned his bachelor’s degree from Yale and a Juris Doctor from Harvard Law School. Before entering government, he worked at top think tanks and in the intelligence community, focusing on nuclear policy and strategic planning.
2/21
Cheese quickly became a key voice for a “China First” strategy, arguing the US must prioritize military buildup in Asia over commitments in Europe or the Middle East. He sees (or saw, rather) Taiwan as the core test of US credibility.