The companies that support Putin and saved Russia from collapse

THE Russia is characterized as a “giant” in Europe and not without reason, since despite the harsh Western sanctions for its decision Vladimir Putin to invade Ukraine, companies they continue to invest in the country and support the Kremlin's war plans.

Entrepreneurs from China and the former Soviet Republics have been investing continuously from 2022 onwards, trying to fill the void left by Western companies that have left en masse or frozen their operations.

The Business Insider he invoked research by the SPARK-Interfax serviceaccording to 9,600 companies with foreign dependencies left in 2022 and the first 10 months of 2023. Also, Kyiv School of Economics it's mentioned that 1,741 foreign companies are in various stages of suspension of the investments or their operation, while just around 350 international companies completed their exits.

Most, 116,400 legal entities with foreign participation were registered in Russia in 2023 -from 185,000 in 2017-, with the Chinese investment to account for 25%. Alongside, companies from former USSR countriessuch as Belarus, Kyrgyzstan and Kazakhstan made up 59% of new investments for 2023. Then, followed by businessmen from Turkey and Indiawith the participation rates being 3% and 2% respectively.

Putin's trick

The Russian president long ago prepared Russia's economy about the war in Ukraine, though he did not expect the mass exodus of Western companies, let alone the ban on Russian activities in the West. So in an attempt to save what he could, he imposed strict rules on the exit of foreign companies from Russia.

In particular, it introduced a series of almost insurmountable obstaclessuch as that the companies should donate to the state and yes sell their assets at a deep discount before leaving the country. Also, companies active in strategically important sectors – such as energy – had to get Putin's signature before any sale of their assets.

So, despite tensions between Russia and the West, approx 3% of companies registered in Russia last year they were from countries that the Kremlin considers “unfriendly”, ie by states that imposed sanctions.

However, not only did this move give Russia, but also economic breath from Asia, mainly from Beijing. THE Mikhail Nikolayevhead of Russian rating agency ACRA, said that while Western sanctions have hit the number of foreign affiliates in Russia, the Eastward realignment of trade and supply chains helped boost new company registrations from alternative markets.

So two years after the war in Ukraine, Russia continues to have money and support for its war operations, despite concerted efforts by the West to shut off the liquidity tap to the Kremlin.