Topic: Putin is trying to coerce firms into doing business or else... (Read 429 times)
If you don't wish for any foreign firm in your nation and wants all firms in your country to be owned by your citizens, the world will just boycott your market and this will lead to economic crisis due to total isolation. Putin has gone the extreme to keep the glory of Russia.
Putin have been making big plans to recover the economy. Only the usage of renewable energy can make sanction more effective, because Putin have well understood the need of oil. So, in someway he'll bring in the money.
Putin is not realising that even the oil that he thinks he has has been the only last choice he had but is never enough to bye pass the sanction else he uses bitcoin as a currency for exchange because Rubble is no where to be found anyone. And talking about renewable energy, there's a plan i believe yet unleashed and before you know it they will cut off the tie with Russia and make use of their renewable energy source.
Even if they seize the assets of this foreign individuals, how will they be able to run it as smoothly themselves? I am pretty sure that they're not going to be able to do the same operations as the previous owners and I think that those people who own those businesses have safety net in place when this war started.
That is true- even if the Russian government seizes the property of these businesses, I doubt that they would be able to function well. Since most of these Western companies and businesses have pulled-out their businesses/products in Russia, Putin is actually in chaos with its finances. Eventually, he will feel the effects of this war and in due course stop it.
I doubt where this pride of Putin will take him. Businesses are the lifeline of the country- without any proper circulation of cash, they will eventually yield to extreme measures.
~
Not easy to wrap my head around it when there's laundering involved. I suppose Putin can reward his cronies with these expropriated assets and then they'll be the ones to launder money for him and maybe smuggle goods in, so it can't be all traced back to him?
Those companies can be used for anything, almost anything other than actually helping the people of Russia.
They can be used to siphon money from the government in subsidies, they can be used to purchase overpriced goods for other companies run by oligarchs, they can be used to import stuff from countries that are not joining the sanctions and they can also be used to launder money in foreign countries. You set up a company in Dubai for example, this company on paper sends goods worth 3 million to some "private" company in Russia and it gets paid for it, there was actually no delivery but suddenly this foreign company is full of cash and can make purchases outside with the "profits".
These strategies are as old as the USSR, despite the propaganda about the average Russian managing without western stuff the first ones to crack will be the ones in the government, they won't give up their lifestyle and they will try to find any way to get their beloved stuff.
And companies like these who on the surface will look totally clean are the perfect excuse.
Do they need to replace the ovens at McPutin? it will cost the same as previously but they will buy the cheapest junk available on aliexpress and two SUVs $200k that will be used for...doing business stuff.
What are you talking about bruh... you do not seem to have a clue about the costs, timeframes and investment requirements of the different types of energies. Solar can be installed by any decent sparky starting a 2000 USD, a wind turbine and generator of a mid size can be installed in a couple of months starting at around 200k.
He is right a bit about that, it can be installed in a few months but you can't manufacture that many in just a few months.
Europe has an installed wind capacity of ~200 GW with just ~18 installed last year. You will need to install 6 times the total capacity or 80 times what you have done last year to replace fossil fuel.
There is no way all the factories in the world would be able to produce that in 5 years, let alone in 5 months.
But there are a couple of nuclear powerplants that could be restarted in time
Russia being an oil rich country, even the western nations that are against Russia keeps the oil imports. The sanctions have affected the economy very bad. With the usage of cryptocurrency governments and the people managed to surviv mn e. As an immediate effort to recover the inflation of ruble Putin have revealed statement, all countries not in the friend list of Russia to pay for oil in the form of ruble. Putin have given order to the banking authorities to take care of the arrangements to provide ruble for them.
Putin have been making big plans to recover the economy. Only the usage of renewable energy can make sanction more effective, because Putin have well understood the need of oil. So, in someway he'll bring in the money.
Putin have been making big plans to recover the economy. Only the usage of renewable energy can make sanction more effective, because Putin have well understood the need of oil. So, in someway he'll bring in the money.
Putin seems to recognize nothing more than brute force. But in business, such tactics are always doomed to failure. If the business and property of foreign firms are taken away in Russia, they will go to international courts and all over the world there will be confiscation of property belonging to the Russian Federation in order to compensate for the losses caused. Russia will be completely cut off from the whole world. Considering that this is not a high-tech country, its economy will be thrown back many decades. All this is stupid on the part of Putin, like all his recent actions regarding Ukraine. A terminally ill old man with enormous power just went crazy, but ordinary citizens of Russia will pay for this for a long time to come.
Nationalization is very bad. I don't remember a single example where it had any success. Having stolen technologies and equipment, success will last until the breakdown of this equipment, because no one will bring spare parts. In the future, many companies will not want to go to this country. And all high-quality European products will be forced to be replaced by Chinese waste products. It is unfortunate that ordinary citizens will suffer greatly from this. 
the main problem is that it does NOT take a year, it takes many years of research, investment (which will be lacking in Putin's Russia) and formation. If you are interested, you should learn more about the modern oil industry. The companies that finance that for VP and the companies that know how to undertake the CAPEX and OPEX operations will not be there for him either.
Unfortunately it takes a long time to build any energy source. You want wind turbines? Takes a long time to manufacture it and put it in the right place and let it start earning you money, you want solar? You have to get them and install them and let them start working....
What are you talking about bruh... you do not seem to have a clue about the costs, timeframes and investment requirements of the different types of energies. Solar can be installed by any decent sparky starting a 2000 USD, a wind turbine and generator of a mid size can be installed in a couple of months starting at around 200k.
The installations to extract petroleum and refine it require billions and take years.
To launder money, one needs to have money. Russia will have trouble finding any, quite soon. This can actually be a good thing because it can place some motivation into corrupt Russian officials and oligarchs. After all, they're used to luxury, and these sanctions are making it less and less possible. So I'm not sure how the schemes with making money would really work in Russia. Of course, there'll still be relatively wealthy people vs very poor people, but the riches are now losing a lot in Russia, not to mention that they won't be able to travel to their top Western destinations and use their European villas any time soon.
That's likely what's going to happen. I live in a country that was under a dictatorship for a time and that's what they usually do after purging privately owned sectors. Still, assuming he cronies can run this place, would the money they'd be able to make from the local market even be enough to still buy assets abroad, considering how low the ruble has dropped, plus these friends are also getting targeted by sanctions?
Making money? Yeah!
The companies themselves don't actually make a real profit like a real company, but because the costs are subsidized by the state, the state cuts their taxes, waives any other tax on work or welfare contribution to the budget, making the cost with the workforce go down, exempting companies from rent and so on and on.
One clear example is PDSVA, the petroleum company of Venezuela, profitable because it has lower running costs, using its money to buy assets outside and using the money to pay a ton of Maduro's cronies. In the case of Russia of course it won't be that simple but it will still not stop them to start a shell company in a country that doesn't sanction them and using it as a mule for both acquiring stuff and laundering money, of course, all of this extra work involved will be paid by the population and every single steps put proportionally more pressure on the economy. Putin as a former KGB knows this too well, all the countries in the Comecon tried to use 3rd world (non-aligned) countries in order to get stuff that they wouldn't normally be able to get.
Not easy to wrap my head around it when there's laundering involved. I suppose Putin can reward his cronies with these expropriated assets and then they'll be the ones to launder money for him and maybe smuggle goods in, so it can't be all traced back to him?
the main problem is that it does NOT take a year, it takes many years of research, investment (which will be lacking in Putin's Russia) and formation. If you are interested, you should learn more about the modern oil industry. The companies that finance that for VP and the companies that know how to undertake the CAPEX and OPEX operations will not be there for him either.
Unfortunately it takes a long time to build any energy source. You want wind turbines? Takes a long time to manufacture it and put it in the right place and let it start earning you money, you want solar? You have to get them and install them and let them start working.The great part about oil is that it takes even longer and I hope it ends very quickly because oil is not the way to go, we need to cut oil usage as low as possible if we can. In this regard I believe that Russia could definitely deal with wind turbines and nuclear that would still allow them to make insane amount of profit, they have enough base for that to start, they may not be doing economically great, but they have enough money.
Current Russia is heading towards 90s, where factories, business, manufactures were nationalized or bought for a promise, bottle of vodka, taken by force or by document forgery. Expect new Berezovsky, Abramovich and other new oligarchs to appear close to 2030. With all that sanctions, the world is doing Russia a favor.
I think this is only a retaliatory move by Putin to get back at the EU and US for the sanctions. It is in the news that Biden is looking out for 50 Russian elites and businesses to sanction. So Putin is probably serving back the delicacy given to him back
https://www.washingtonpost.com/us-policy/2022/03/16/russia-oligarchs-sanctions-treasury/
Quote
Biden administration identifies 50 Russian elites as targets for global hunt to seize assets
Quote
The Treasury Department on Wednesday gave a new international body a list of 50 Russian elites that the United States views as its top priorities for enacting new sanctions, as global law enforcement steps up its hunt for the assets of oligarchs tied to the Kremlin.
https://www.washingtonpost.com/us-policy/2022/03/16/russia-oligarchs-sanctions-treasury/
On the oil extraction business, it is certain that the extraction, processing and even transportation has become a very specialised business. Even large companies depend on a selected group of technologists and know-how companies. This is nothing like we nationalise and next day we just open as usual. And on the financial side, it is pretty much the same, it is not only the huge investments required, it is the ability to manage efficiently those fluxes of money without loosing them to corruption, inexperience and inflated supply-chains.
If the military invasion of Ukraine by Putin's army is an example of how things are managed in his government, I can already tell you there is plenty of GDP to be lost.
Doesn't matter in the slightest that it takes time. There are two things that could be done, first of all you could start right now and it will take a year before you can get the most out of a place and meanwhile let the gas prices be high during that time, or you could use the ones that we already had someone working on and put subsidiaries on it and get them paid a lot more and basically tax payers money would go to lowering the price of gas.If the military invasion of Ukraine by Putin's army is an example of how things are managed in his government, I can already tell you there is plenty of GDP to be lost.
All in all it is sad that it happened after 2+ years of pandemic, so we are reaching to 2+ years of economical chaos around the world. But, it certainly is a better feeling than depending on Russia at all times.
You are not getting it: if it takes a year, who pays the government salaries in Russia that year? How does the military replenish that year?
But the main problem is that it does NOT take a year, it takes many years of research, investment (which will be lacking in Putin's Russia) and formation. If you are interested, you should learn more about the modern oil industry. The companies that finance that for VP and the companies that know how to undertake the CAPEX and OPEX operations will not be there for him either.
Judging for Putin's usual modus operandi, he will seize the assets, give them to one of his mafia bosses oligarchs to open a local version (McPutin or Vladpple) and get his cut of the business to buy more flats in London, a larger palace or a couple of islands or archipelagos that he fancies.
That's likely what's going to happen. I live in a country that was under a dictatorship for a time and that's what they usually do after purging privately owned sectors. Still, assuming he cronies can run this place, would the money they'd be able to make from the local market even be enough to still buy assets abroad, considering how low the ruble has dropped, plus these friends are also getting targeted by sanctions?
Making money? Yeah!
The companies themselves don't actually make a real profit like a real company, but because the costs are subsidized by the state, the state cuts their taxes, waives any other tax on work or welfare contribution to the budget, making the cost with the workforce go down, exempting companies from rent and so on and on.
One clear example is PDSVA, the petroleum company of Venezuela, profitable because it has lower running costs, using its money to buy assets outside and using the money to pay a ton of Maduro's cronies. In the case of Russia of course it won't be that simple but it will still not stop them to start a shell company in a country that doesn't sanction them and using it as a mule for both acquiring stuff and laundering money, of course, all of this extra work involved will be paid by the population and every single steps put proportionally more pressure on the economy. Putin as a former KGB knows this too well, all the countries in the Comecon tried to use 3rd world (non-aligned) countries in order to get stuff that they wouldn't normally be able to get.
Just used McDonalds since I don't know what other foreign brands have presence in Russia but I suppose there's still the problem of seizing their assets - how do you liquidate it if no one outside is going to buy it?
Judging for Putin's usual modus operandi, he will seize the assets, give them to one of his
He can get very creative and quite persuasive when he wants to take someone else's stuff as you can see right now in Ukraine.
That's likely what's going to happen. I live in a country that was under a dictatorship for a time and that's what they usually do after purging privately owned sectors. Still, assuming he cronies can run this place, would the money they'd be able to make from the local market even be enough to still buy assets abroad, considering how low the ruble has dropped, plus these friends are also getting targeted by sanctions?
Quote
I think it's counterproductive depending on what company's assets they seize. Let's take McDonalds for example. Say the company decide to leave and then Putin seizes the assets, what is he gonna do with it? Would he be able to just make the stores run like nothing happened, is gonna retain the employees, etc? I think even if he decides to just shut them down and liquidate, who he gonna sell those too? Even if he sell those to his cronies, the money would still be coming from within Russia, no new money comes in.
Seized the assets from the company will not make the company to feel bad because the documents of those assets are still with the company which other companies cannot buy those assets from Putin. The taxes Putin imposed to the company will not help the company to make a good profit and still pay their workers which the Putin was aware but he just wants to distract the company from the country.
Doesn't matter in the slightest that it takes time. There are two things that could be done, first of all you could start right now and it will take a year before you can get the most out of a place and meanwhile let the gas prices be high during that time, or you could use the ones that we already had someone working on and put subsidiaries on it and get them paid a lot more and basically tax payers money would go to lowering the price of gas.
All in all it is sad that it happened after 2+ years of pandemic, so we are reaching to 2+ years of economical chaos around the world. But, it certainly is a better feeling than depending on Russia at all times.
People do not realize that the price is already going down. It will keep being like this for a long time but oil prices weren't 10$ before this war started neither. Just let the prices go up, and make it expensive and that will promote clean energy a lot better. We all know that clean energy has only 2 problems, aside from that they are much better for everyone both economically and also helps the world.All in all it is sad that it happened after 2+ years of pandemic, so we are reaching to 2+ years of economical chaos around the world. But, it certainly is a better feeling than depending on Russia at all times.
One of the problems is that storing it is hard, not impossible but hard, and that makes it difficult, but if everyone starts using solar panels on their roofs, then it would be a great start. Secondly it is expensive to start, and this is where oil prices matter. If the oil prices are high, then spending that high money on solar instead could help out a lot.
What Putin can do, is what every dictator does based on his criteria, is simply to seize the infrastructure and make it work as if nothing were happening, obviously the international market was closed to Putin, but he has the full support of of the Chinese, not only for aid in the war, they must also have treaties that are economic in style, and China knowing that in some way an entire American hegemony is being attacked, they will not hesitate to support Russia, this is something that everyone understands, is something that China will not miss, especially now that there are high levels of inflation in the US. Putin knows that if he intimidates the companies, they will not leave Russia, and they will even have many benefits in some way, and Putin knows that the economy cannot be stopped, these are the measures that cannot get out of his hands.
This is a very peculiar understanding of business and the rule of law. I wonder that, if this is effectively implemented, will we ever see a western company investing or doing business in Putin's dominions? Will the jobs for the Russian people created by this companies disappear for decades to come?
or particular country on which the risk on having that kind of situation would be most likely to happen.Dictatorship kind of act is something really bad to look at and mandating around the domain is something not
that good if businesses would tend out to close its doors.If its been forcefully make them operational then those business firms wouldnt be having no choice considering that they have threats on confiscating everything
plus putting up on jail those executives.
I think it's counterproductive depending on what company's assets they seize. Let's take McDonalds for example. Say the company decide to leave and then Putin seizes the assets, what is he gonna do with it? Would he be able to just make the stores run like nothing happened, is gonna retain the employees, etc? I think even if he decides to just shut them down and liquidate, who he gonna sell those too? Even if he sell those to his cronies, the money would still be coming from within Russia, no new money comes in.
Yes, I also made a similar comment on one thread that was talking about how Russia will be able to recover after every sanction, and the possibility of it. There isn't any way at all that they will be able to easily recover from the economic crackdown that they are facing right now.Even if they should try, it is not going to be easy because there is no money that is coming from outside into the country, everything has been blocked and it is now just Russia on its own. Even if there are countries that would patronize them at this time it’s just going to be a few countries. As it stands, a lot of countries around the world has completely turned their back on Russia.
Jump to: