Chronicle of self-destruction of the Russian economy. Day nine 

Soon Russia’s model of existence will be identical to the Soviet Union, existence behind the Iron Curtain, in an economic vacuum

Cover of the new issue of Politico

Russia has attacked Ukraine and is suffering enormous losses not only at the front but also on its own territory. In addition to the thousands of their fellow citizens who died in Ukraine, the Russians have already received a devaluation of the ruble, rising interest rates on loans and mortgages, inflation, and physical isolation from the entire civilized world.

The next step is rising consumer prices and a deficit.

In a few days, Russia’s economy fell to the level of the 90s. Russia’s model of existence will soon be identical to that of the Soviet Union. Life behind the Iron Curtain, no opportunity to move freely around the world, economic vacuum. The economy will work for the domestic consumer, producing low-quality goods, there will be a shortage of imported goods, the ruble will lose its value, and the main demanded export goods will be oil and gas.

The situation on March 4, 2022

– Switzerland, despite its neutral status, has imposed sanctions against Russia. In particular, it banned transactions with the Central Bank of the Russian Federation, financing or financial support of trade with the Russian Federation or investments in the country, export of dual-use products to Russia, export of certain services and products for the oil, aerospace sector. Related services – insurance, mediation – are also prohibited.

– Microsoft stops sales in Russia.

– Roskomnadzor decided to block Facebook in Russia.

– The BBC has announced that it will stop working in Russia. 

– “Lithuanian Railways” announced that they are stopping the transportation of “Metalloinvest” products of Russian billionaire Alisher Usmanov, who came under EU sanctions. 

– The European Union is discussing limiting Russia’s influence on the IMF and the country’s access to the fund’s finances, Reuters has learned. One option is to completely exclude Russia from the IMF. Russia’s exclusion from all financial institutions is being discussed in the EU.

– One of the largest IT employers, Luxoft, comes from the Russian market. At one time the company was founded by Russians.

– Exports to countries that have publicly condemned Russian aggression are more than ⅙ Russia’s GDP. Reducing exports to these countries by 10% entails the loss of more than 3 million jobs for Russia.

– German chemical company Henkel is suspending all planned investments in Russia.

– Montenegro has closed the skies to Russian planes

– American IT company, software manufacturer, consulting specialist – EPAM stops serving Russian customers.

– US network hardware and software maker Cisco Systems Inc has shut down in Russia and Belarus.

– FedEx stops delivery in Russia and Belarus.

– Carlsberg stops exports and investments in Russia.

– Technology giant Microsoft is stopping all new sales in Russia due to the country’s invasion of Ukraine. In addition, cooperation is under way with the governments of the United States, the European Union and the United Kingdom to stop many areas of work to enforce sanctions against the aggressor.

– In Russia, the amount of cash in circulation in February increased by a maximum of 20 years. Demand for cash has risen sharply since the start of Russia’s war in Ukraine, writes Russian Forbes.

– The EU suspends cross-border cooperation programs with Russia and Belarus. 

– Since the beginning of the war in Ukraine, drug prices for Russians have risen to 25%. 

– Aeroflot has been removed from the global electronic ticket booking system.

– Russian airline S7 canceled all international flights on March 5.

– The Financial Action Task Force (FATF) is developing an approach to tracking Russian capital to some countries to avoid sanctions, Bloomberg reports.

– Taiwanese company TSMC, the world’s largest semiconductor manufacturer, has refused to cooperate with Russia. TSMC was engaged in the production of Russian-developed chips. Without TSMC’s capacity, it will be difficult for Russian companies to implement an import substitution program in the IT industry.

– The Federation Council passed a law on punishment “for spreading false information about the actions of the Russian military, discrediting the Russian armed forces and calls for anti-Russian sanctions.” The new article provides for 10 to 15 years in prison. 

– The Ukrainian army destroyed Russian military equipment for 331 billion rubles, according to estimates by Forbes Ukraine.

– Porsche has decided to stop deliveries of cars to Russia.

– The Grammarly online platform, established in Ukraine, will block users in Russia and Belarus and allocate $ 5 million to help Ukrainians. The company calls directly to support the Return Alive initiatives, Razom, Nova Ukraine and the Armed Forces of Ukraine, Speka writes.

– Yandex has run out of money, it is threatened with default. The company warned of a lack of funds to meet the possible requirements of bondholders if they decide to seek early redemption of securities due to the suspension of trading.

– Autodesk ceases operations in Russia – is the largest developer of software for civil and industrial design, engineering and design development.

– Porsche has stopped supplying cars to Russia.

– Swarovski stops sales in Russia.

– AMD Corporation has stopped all deliveries to Russia and Belarus.

– The Central Bank of the Russian Federation decided not to hold stock trading on the Moscow Stock Exchange from March 4 to 8.

– Lipetsk plant Indesit has stopped working.

– Maersk does not accept new orders for the transportation of containers with essential goods to the ports of St. Petersburg, Kaliningrad, Novorossiysk, the company said. 

– Intel suspends supplies to Russia and Belarus.

– Airbnb comes from Russia and Belarus.

 – The United States has prepared a bill to ban the import of Russian oil.

In Russia, a number of sites have ceased to operate in whole or in part: Facebook, Google Play, App Store, Twitter, the Russian service of the BBC, Radio Liberty, Deutsche Welle, Medusa.

– Google has suspended the sale of contextual advertising in Russia on its platforms, including YouTube

– The international agency S&P Global Ratings downgraded Russia’s long-term sovereign credit rating in foreign currency from BBB-to CCC-, the forecast is “negative”. On the S&P scale, this means that Russia is close to default, or in default, with an extremely low chance of a refund. Russia is now the only country in Europe and Asia with such a rating. The world market is already refusing to deal not only with Russian oil, but also LNG – more and more refusals from banks to service transactions.

 – British clothing manufacturer Marks & Spencer stops deliveries to Russia, where there are 48 stores.

– Russia’s economy will collapse to the level of the 1998 crisis – JPMorgan. He said Russia’s economy would shrink by 35% in the second quarter and by 7% in 2022 as economic output declines. 


One comment

  1. Heck it looks like the corporate self-sanctions are as bad as the government sanctions. That’s good to see and nice that Putin’s Russia has become a pariah. I just wonder how long it will take for it to sink into Moskali minds? When will they finally stop blaming everyone else for Putin’s failed policies?
    Ukrainians are dug in and stubborn, the invaders are losing on the field and at home. I hope Ukraine is prepared for 40 million Russian refugees when we finally win.

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