America sees extraordinary economic opportunities in Russia

America sees extraordinary economic opportunities in Russia

Careful warming of frosty relationships between the United States and Russia is paving the way for American companies to do the impossible: to return to the country three years after a massive deduction.

conversations about economic possibilities

according to groundbreaking discussions The US foreign minister Marco Rubio "Exceptional possibilities" , which could use both the United States and Russia after the end of the Ukraine War. And on Monday, US President Donald Trump To incorporate development projects with Moscow.

The challenges of return

However, the extent of the company deduction after the invasion of Ukraine could make the return process more difficult in 2022, since only a few American companies remained in the country to complete business. According to a list since then as 1,000 global companies either voluntarily withdrawn or their activities in Russia.

expectations and skepticism

Kirill Dmitriev, the head of the Russian Direct Investment Fund, expressed the expectation that some American companies could return in the second quarter, such as from the Russian news agency TASS reported. However, analysts are skeptical and argue that the potential rewards for a new investment in Russia would be too low to justify the associated costs.

"I am skeptical that many companies risk their reputation and want to go into this very unsafe business environment," said Janis Kluge, a researcher at the German Institute for International and Security Policy (SWP). "It is still too toxic to make a lot of money there," he added in an interview with CNN.

an ‘unsustainable’ business environment

Russia has always been a difficult place for business. Timothy Ash, a Russia expert at Chatham House in London, emphasized that there had been constant problems with corruption, bureaucracy and dealing with the Kremlin. In view of the invasion and the comprehensive economic sanctions the business climate has further tightened. A considerable risk is the possibility that the Kremlin confiscates the assets of foreign companies.

corruption and isolation

In 2023, President Vladimir Putin signed a decree that enables the government to temporarily put foreign assets under their control in the country. Months later nationwide the local assets of the French Joghurt manufacturer Danone and the Danish Brauers Carlsberg. Corruption has also increased from already high levels, which in declines in corruption perceptions index 2024 to the 154th place Absank, together with Azerbaijan, Honduras and Lebanon.

economic isolation and challenges

The economy of Russia is now less integrated into the global economy, which, according to Kluge, the SWP, is largely due to the sanctions. Together with the EU, Great Britain and Canada, the US government has excluded some Russian banks from the Swift intelligence service, a high-security network that connects thousands of financial institutions worldwide. This makes it difficult for these banks to transfer money from abroad.

Even if the USA its far-reaching export controls and Fundsinchen will not inevit change something about the measures in its greatest trading partners. On Monday, the European Union approved its 16. Sanction package against Russia. "It is now very expensive and tedious to only carry out a transaction in western currencies from Russia," said Kluge, emphasizing that the sanctions "have made business activities in Russia unsustainable for many western companies".

a past era for business activities

Russia is no longer a “obvious place to make money” for foreign companies, says Elina Ribakova, Senior Fellow at the Peterson Institute for International Economics in Washington, DC. This situation has existed for about a decade, as CNN announced. The heyday of the Russian economy, which settled Ribakova between the early 2000s and around 2014, fell together with booming oil prices, with Moscow exporting large amounts of its oil and natural gas during this time. Now the situation has changed fundamentally because the United States is no longer dependent on Russia's natural resources.

The future remains uncertain

For foreign companies, a return to Russia would simply not be worth the effort. A major challenge will be the probably fragile diplomatic relaxation between Moscow and Washington. Ribakova expressed concerns: "What happens if the Russian attitude towards the USA changes? Perhaps they roll out the red carpet today. And what happens tomorrow? It is extremely unpredictable."

also Michael Rochlitz, lecturer for the economies of Russia, Eastern Europe and the Eurasian region at the University of Oxford, warns of the uncertainties: "A lot changes with the Trump administration every day. Do you really want to make investments on the basis of this erratic policy? What happens in four years if a democratic president for companies who want to return to Russia is Clear: "High risks, low profits."