At the same time as Russia is under heavy sanctions from the West, they are forging alliances with the world’s two most populous countries.
This is what Frode Nilssen, senior researcher at Fridtjof Nansen’s institute and professor at the Business School at Nord University, says. He is a Russia expert and expert on international trade.
– Russia is not in a vacuum. They have been building alliances increasingly for a long, long time. They have gained stronger and stronger alliances with other non-democratic nations such as China, India, South Africa and other oil nations to name a few, he says to TV 2.
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– Frode Nilssen, senior researcher at Fridtjof Nansen’s department and professor at the Business School at Nord University. Photo: Fridtjof Nansen’s institute
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War or not: It is a need
While the West has had a strong focus on cutting imports of Russian oil and gas, despite the fact that the EU, among other things, is very dependent on it, Russia continues to make money from the export of precisely these goods.
– One of the points is that the ridiculously rich oligarchs have largely built their fortunes on natural resources that are in great demand in the world market. There are both nickel, timber, oil and gas, among others. There are things that are in demand, war or not war.
And even if Europe were to do without Russian oil and gas, other countries are, so to speak, queuing up to buy it from Russia.
– India and China together are almost half the world’s population, and they need a lot of the resources that Russia has. So that may be part of the reason why the oligarchs still make a lot of money.
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– A big but
Researcher at the Norwegian Institute of Foreign Policy (NUPI), Jakub M. Godzimirski, points out to TV 2 another aspect of the Russian economy after the West reacted strongly to the country’s invasion of Ukraine.
– When Putin came to power in his time, some oligarchs were arrested. This led the rest to agree to a kind of agreement that they should run their business, but not interfere in politics. These are hard hit by sanctions from the West today, but there is a big but:
– Now the situation is such that many western companies have withdrawn from Russia, and then many opportunities open up for the oligarchs. They can make money from what happened, for example, when McDonald’s withdrew. They can take over and make big money on it because the competition disappeared, simply.
– NUPI-FORSKER: Jakub M. Godzimirski. Photo: Christopher Olssn
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The NUPI researcher says this may make up for some of the losses they have suffered as a result of Western sanctions.
– They thus lost houses and properties in the West, but at the same time the situation opened other doors, such as the fact that they can take over IKEA’s stores further. So it’s a composite image.
Bought up all the McDonald’s
In mid-May, the fast food chain McDonald’s left Russia due to the war in Ukraine. Three days later, Russian businessman Aleksandr Govor announced that he would buy all 850 restaurants in Russia.
– ACQUISITIONS: Businessman Alexander Govor acquired McDonalds in Russia when the chain chose to pull out in mid-May. Photo: Dmitry Serebryakov
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15 of them have now reopened under the name «Vkusno & tochka», which can be translated to «Delicious and nothing else» or «Delicious. Dot.”. The rest of the restaurants are expected to open during the summer.
Part of the sales agreement is said to have been that Govor agreed to keep the approximately 51,000 employees who worked for the chain before the acquisition, and that for at least two years. In addition, it’s pretty much the same menu that McDonald’s restaurants used to offer.
Several experts now point out that acquisitions and further operations like this are really an attempt to appease the Russian people and Putin.
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This is what the first McDonald’s restaurant in the then Soviet Union looked like when it opened in Moscow in 1990. Photo: NTB
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New owners have taken over and from now on the popular cheap food chain is called “Vkusno & tochka”. This is what the same building looks like today. Photo: NTB
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– A game for the gallery
Russia expert Inna Sangadzhieva of the Helsinki Committee confirms that there is a kind of nationalization of foreign companies in Russia now, but that it is not to the great joy of the oligarchs.
– The oligarchs were not prepared for the sanctions that came, and they are not exactly happy to take over the national companies. They are dependent on production, and it is not just easy as it is now. It turns out that Russia was very much associated with the West.
She believes that the oligarchs keep alive the companies that have been abandoned by the West, in order to do society a favor and at the same time appease the power apparatus.
– The oligarchs are of course trying to show loyalty, and those who have gone in and taken over for foreign companies, just have to run a game for the gallery. They adapt to what is around, and as long as Russia has money, they can stay afloat, but whether they manage to rebuild these companies is not certain.
– RUSSIA EXPERT: Inna Sangadzhieva, Senior Adviser to the Helsinki Committee. Photo: Frode Sunde / TV 2
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Exciting, but scary
Professor Nilssen agrees that the main reason why Russian oligarchs take over for foreign companies such as McDonalds, IKEA and the like is mostly about something other than economics.
– It’s not something the oligarchs get rich from, although they probably make money from it and. But the most important driving force behind this is probably the symbolic power it gives into Russian society.
– It is probably more of a loyal form of goodwill action to help support Russian society. It is also an important symbolic act for the people and the power system in Russia, such as Putin and the military.
Nilssen believes that what is now happening in the world economy is the beginning of a new global shift in power structures.
Nilssen points out that where the United States was the world’s largest power, both militarily and economically, it is now these alliances that are now beginning to stand out as the most powerful.
– When we see new alliances between these populous nations, plus a number of other states, it seems that there is a shift and new dominant states in the world. It’s very exciting, but terribly scary to think about, in a way. They want very much power.
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Think there will be a change
Despite the fact that the money still seems to flow in for Russian oligarchs, Nilssen believes that they know the West’s sanctions on the body.
– They have. This is because the West is very strong financially, and has a very strong technological competence.
The global market has functioned so that the production of products is often highly dependent on elements from other continents and countries. He believes Russia, like many other countries, has realized how dependent they are on production elsewhere.
Nilssen believes that what is now happening in the world economy can lead to a change in the long run.
– I believe that there is now a need to re-regionalize the production of critical input factors to society. This does not mean that all the grain eaten in Eastern Norway must be produced there, but one region can be Europe, for example. But it will take many years before things get in place.
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