News / Economy

Some Multi-National Companies Ignoring Western Sanctions Against Russia

Some Multi-National Companies Ignoring Western Sanctions Against Russiai
X
Mil Arcega
April 21, 2014 9:29 PM
Western sanctions are hurting Russia’s economy. That’s according to the country’s economic minister, who says Russia’s economic output is shrinking as investors take their money elsewhere. But some western companies are bucking that trend -- expanding business interests in Russia - even as the U.S. and European allies consider wider sanctions to punish Moscow for annexing Crimea and destabilizing eastern Ukraine. Mil Arcega reports.
Western sanctions are hurting Russia’s economy.  That’s according to the country’s economic minister, who says Russia’s economic output is shrinking as investors take their money elsewhere.  But some western companies are bucking that trend - expanding business interests in Russia - even as the U.S. and European allies consider wider sanctions to punish Moscow for annexing Crimea and destabilizing eastern Ukraine.  

He remains a unifying figure among Russian patriots, but analysts say President Vladimir Putin’s popularity could sour if the economy continues to deteriorate.

Speaking to Russian lawmakers, Economic Development Minister Alexei Ulyukayev said worried investors have already pulled more than $70 billion out of the country.

“We also have a high level of uncertainty in the global financial markets, serious capital flight, the situation when investors are not ready to make investment decisions in the tense international situation we’ve had for the past two months.  The economic situation is not stable," said Ulyukayev.

Russian stocks have lost more than ten percent since the start of the Ukraine crisis - and the ruble sits close to a five-year low against the dollar.

But even as Europe threatens wider sanctions - not all investors are prepared to abandon Russia.

At a recent meeting with Putin, Royal Dutch Shell CEO Ben Van Beurden announced the company's commitment to expand its operations in Russia.

“This is a special occasion for me to visit because indeed today is our 20th anniversary of the partnership that we have in Sakhalin Energy, a partnership that we are exceptionally proud of," said Van Beurden.

It’s no surprise to investment analyst Ben Kumar who says Shell is not the only multi-national with entrenched business interests in Russia’s economy.

“You have this globalization now which means that everyone is linked to everyone else.  Companies like BP - all of the other major energy companies - are so multi-national that if you start to threaten to shut down trade links they will kick up a fuss," said Kumar.

Reuters' European editor Pierre Brancon says Western powers must be careful not to push the Russian bear to hard.

“You don’t wage economic war without inflicting suffering on yourself - we know that European companies are going to suffer if they go to full-blown sanctions," said Brancon.

That’s because Russia produces a third of the natural gas Europe needs, much of it transported through Ukrainian pipelines.  

Diplomatically, it’s a delicate balancing act, one with the potential to provoke a trade war, and higher energy prices around the world.

You May Like

Photogallery Ukraine: Russian Forces Tightening Grip on East

And new United Nations report documents human rights abuses committed by both sides in conflict More

Locust Swarms Fill Antananarivo Skies

FAO-led control efforts halted plague More

South Africa’s Plan to Move Rhinos May Not Stop Poaching

Experts say international coordination needed to follow the money trail and bring down rhino horn kingpins More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.