When Vladimir Putin announced the invasion of Ukraine, the war seemed far from Russian territory. But within days, conflict came to us – not with cruise missiles and mortars, but in the form of unprecedented and unexpectedly large sanctions salvos from Western governments and economic punishment from corporations.
Three months after the February 24 invasion, many ordinary Russians are reeling from these beatings for their livelihood and feelings. Moscow’s vast shopping malls have morphed into eerie, shuttered expanses that were once occupied by Western retailers.
McDonald’s – which opened in Russia in 1990 was a cultural phenomenon, a gleaming modern convenience coming to a drab country worn down by limited choice – withdrew from Russia entirely in response to its invasion of Ukraine. IKEA, the epitome of affordable modern convenience, has ceased operations. Tens of thousands of jobs that were once secure are now suddenly in question in a very short space of time.
Big industrial companies, including oil giants BP and Shell and carmaker Renault, pulled out despite their huge investments in Russia. Shell has estimated it will lose around $5 billion if it attempts to divest its Russian assets.
As the multinationals left, thousands of Russians who had the economic means fled, fearing harsh new government measures related to the war, which they saw as a plunge into full-blown totalitarianism. Some young men may also have fled, fearing that the Kremlin would impose conscription to feed its war machine.
But escaping had become much more difficult than it used to be – the 27 nations of the European Union, as well as the United States and Canada, had banned flights to and from Russia. The Estonian capital of Tallinn, once an easy long-weekend destination a 90-minute flight from Moscow, suddenly took at least 12 hours to reach on a route through Istanbul.
Even proxy travel via the internet and social media has narrowed for Russians. Russia in March banned Facebook and Instagram – although this can be circumvented by using VPNs – and blocked access to foreign media sites including the BBC, the US government-funded Voice of America and Radio Free Europe/Radio Liberty and the German broadcaster Deutsche Welle.
After the Russian authorities enacted a law offering up to 15 years in prison for “fake news” reports about the war, many major independent news outlets closed or ceased operations. These included radio station Ekho Moskvy and Novaya Gazeta, the newspaper whose editor Dmitry Muratov received the recent Nobel Peace Prize.
The psychological costs of repression, restrictions, and shrinking opportunities, though difficult to measure, could be high for ordinary Russians. Although some public opinion polls in Russia suggest there is strong support for the war in Ukraine, the results are likely to be skewed by respondents who are silent and cautious about voicing their honest views.
Andrei Kolesnikov of the Carnegie Moscow Center wrote in an op-ed that Russian society is currently gripped by an “aggressive subjugation” and that the dissolution of social ties may be accelerating.
“The discussion is getting broader. You can call your compatriot – a fellow citizen who happens to have a different opinion – a “traitor” and see him as an inferior human being. Like the highest officials of the state, they can speculate freely and calmly about the prospects of nuclear war. (This is) something that was certainly never allowed in Soviet times during the Pax Atomica, when both sides understood that the resulting harm was completely unthinkable,” he wrote.
“Now that understanding is fading, and this is another sign of the anthropological catastrophe Russia is facing,” he said.
The economic consequences have yet to unfold fully.
In the first days of the war, the Russian ruble lost half of its value. But government efforts to prop it up have actually boosted its value to higher levels than before the invasion.
But in terms of economic activity, “that’s a whole different story,” said Chris Weafer, a veteran Russian economic analyst at Macro-Advisory.
“We are now seeing the economy deteriorating across a wide range of sectors. Companies are warning that they are running out of stocks of spare parts. Many companies are hiring their staff on a part-time basis, and others are warning them about closing completely. So there is a real fear that unemployment will rise during the summer months, that there will be a big contraction in consumption and retail sales and investment,” he told The Associated Press.
The comparatively strong ruble, encouraging as it may seem, also poses problems for the state budget, Weafer said.
“They effectively receive their earnings from the exporters in their foreign currency and their payments are made in rubles. So the stronger the ruble, the less money they actually have to spend,” he said. “(This) also makes Russian exporters less competitive because they are more expensive on the world stage.”
If the war drags on, more companies could leave Russia. Weafer suggested those companies that just halted operations could resume if a ceasefire and peace deal is reached for Ukraine, but he said the window for that could be closing.
“If you walk around shopping malls in Moscow, you can see that many of the fashion stores, Western business groups, just lowered the shutters. Your shelves are still full, the lights are still on. They’re just not open. So you haven’t moved out yet. They’re waiting to see what happens next,” he explained.
Those companies will soon be pressured to resolve the limbo their Russian businesses are in, Weafer said.
“We’re getting to a point now where companies are running out of time or maybe running out of patience,” he said.
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Follow all AP stories on the Ukraine war at https://apnews.com/hub/russia-ukraine.