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9 Feb, 2023 16:03

Loss of Western brands is Russia’s gain – Putin

The businesses they leave behind will survive, the head of state assures
Loss of Western brands is Russia’s gain – Putin

Many foreign brands and businesses are leaving Russia not of their own volition but because they are feeling pressured to do so, and suffer financially as a result, Russian President Vladimir Putin said on Thursday at a meeting of the supervisory board of the Agency for Strategic Initiatives.

Moscow, however, will not force anyone to stay, according to the president.

Many of them, as you know, under pressure from their governments, are leaving our market. Well, all the best to them. However, because of the loss of our market they incur huge losses. It’s their choice, it’s their decision,” Putin said, noting that many of those companies “do it without any pleasure.

Who wants to lose a well-established business in which they invested effort, money? It’s not even about the money sometimes – many have invested their hearts – but under pressure from their governments are forced to leave.

According to Putin, Russia will not allow the varied assets and infrastructure these companies leave behind to go to waste, and domestic industries may even benefit from the situation.

They leave behind a good legacy, so to speak, they leave behind production infrastructure, well-trained personnel. Perhaps someone thinks that all of this will immediately crumble and fall apart – nothing of the sort is happening. Our companies, our entrepreneurs are picking up these enterprises and businesses and continuing this work. And quite successfully,” the Russian president assured.

After Moscow’s military operation in Ukraine began, many major Western brands announced their withdrawal from the Russian market and the suspension of investment. According to economists from Switzerland’s University of St. Gallen, more than 1,400 companies decided to quit Russia over the past year, including electronics manufacturers, automakers, hotels, banks and restaurant chains.

However, Russia managed to secure supplies of goods through alternate routes – via the so-called ‘parallel imports’ – where products continue to be delivered to Russia through third countries without a brand license from the rights holder.

In addition to this, the Russian government has launched a number of programs and initiatives to support domestic manufacturers, which fall within the framework of ‘import substitution’. According to Putin, the country produces a lot of quality products, which until recently had a hard time making their way to the domestic market due to competition from global players.

However, the departure of Western brands means “our domestic manufacturers received unique opportunities for development and we must take advantage of them,” Putin stated.

For more stories on economy & finance visit RT's business section

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