London
Cnn
–
A provisional thaw in relations with the United States-Russian Glacial opens the way to American companies to do what, until recently, seemed unthinkable-to return to the country three years after their mass departure.
Following Discussions on the watershed With Russian officials last week, US Secretary of State Marco Rubio praised “Extraordinary opportunities”, economic and geopolitical, that the United States and Russia could both seize the war in Ukraine over. And, Monday, American president Donald Trump said He “tried to make economic development agreements” with Moscow.
But the extent of the Russian business exodus after invading Ukraine in 2022 could make this project more difficult, with few American companies to play in the country to conclude agreements. More than 1,000 worldwide Companies have voluntarily left or reduced operations in Russia since then, according to a list Compiled by the Yale School of Management.
Kirill Dmitriev, head of the Russian Direct Investment Fund, said that he expects some American companies to return from the second quarter, according to comments Cited by the Russian state media agency TASS last week.
Analysts are however doubtful, arguing that the reward to reinvest in Russia would be too small for companies to justify the potential costs of doing so.
“I am skeptical that many companies risk their reputation and risk in this very dangerous and risky commercial environment for this relatively small market,” said Janis Kluge, researcher at the German Institute for International Affairs and Security, or the SWP.
“It is still too toxic for American companies to earn a lot of money there,” he told CNN.
Russia has long been a difficult place to do business.
“There were constant problems previously in terms of corruption, bureaucracy, administrative formalities (and) dealing with the Kremlin,” said Timothy Ash, specialist in Russia at Chatham House, a London -based reflection group, and a main strategist at RBC BlueBay Asset Management.
But since the invasion – and the battery of economic sanctions Imposed by the West on Russia – the country has become an even more delicate place for businesses. The biggest risk is probably confronted now with foreign companies is the prospect that the Kremlin grabs their assets.
In 2023, Russian President Vladimir Putin signed a decree allowing the government to place foreign assets in the country under its temporary control. Months later, the Kremlin nationalized The local assets of the manufacturer of French yogurt Danone and the Danish brewer Carlsberg.
Corruption has also increased already high levels. In 2021, the non -profit organization Transparency International put Russia in 136th place, tied with Liberia, in its ranking of 180 countries and territories for their levels perceived of corruption of the public sector. By 2024, Russia had slipped further into the Corruption perception index In 154th place, tied with Azerbaijan, Honduras and Lebanon.
Meanwhile, the Russian economy has become less integrated into the rest of the world, Kluge told SWP, due, largely, of sanctions.
In particular, shortly after the invasion, the United States, the EU, Great Britain and Canada have jointly prohibited certain Russian banks in the rapid messaging service-a high security network connecting thousands of financial institutions worldwide. This made much more difficult for these banks to send and receive money from abroad.
The United States would not be able to readmit banks prohibited to the EU cooperation network because Swift is based in Belgium, Kluge added.
Likewise, even if the United States lifts its set of sprawling export controls and assets Imposed on Russia since February 2022, its main trade partners will not necessarily reverse their own measures against Moscow. Monday, the European Union approved its 16th batch of sanctions against Russia.
“It has become very expensive and heavy to even make a transaction in Western currencies (inside) of Russia,” said Kluge, noting that the sanctions had “rendered continuous business in Russia insufficient for many Western companies”.
Russia is no longer an “obvious place to earn money” for foreign companies, according to Elina Ribakova, principal researcher at the Peterson Institute for International Economics, based in Washington, DC. And this has not been the case for about a decade, she told CNN.
The peak of the Russian economy – which Ribakova puts between the early 2000s and around 2014 – coincided with the booming prices of oil. Moscow benefited by exporting large quantities of its oil and its natural gas to the rest of the world during this period, including the United States. A considerable proportion of foreign companies that settled in Russia were energy producers, as well as retailers hoping to sell their goods to the emerging middle class in the country, she said.
Now, “the tables have changed spectacularly” since America no longer needs Russia’s natural resources.
America now not only much more product oil and natural gas only in the previous decades, but it too exports fuels and therefore competition directly With Russia on the world energy market.
For example, Europe has increased its imports of American liquefied natural gas – a refrigerated form of natural gas which can be transported to oceanic oiliers – to replace supplies traditionally imported from Russia.
The war has also reduced the middle class of Russia, said Ribakova. Many people are fighting or died on battlefields in Ukraine, or have left the country at the start of the invasion, although salaries be up to Due to serious shortages of labor.
The whole economy is now motivated by the military-industrial complex, said Ribakova. And it is a sector where the United States and Russia are unlikely to find “natural cooperation”, she noted.
For foreign companies, boomeranging in Russia were just not worth it.
A major headache for return companies would be the probable fragility of any diplomatic relaxation between Moscow and Washington, analysts told CNN.
“What happens if Russian attitude (towards the United States) changes?” said Ribakova. “Maybe they give (that) the red carpet today. And what’s going on tomorrow? It is very unpredictable.
The uncertainty would work in both directions, argued Michael Rochlitz, an associate professor in the economies of Russia, Eastern Europe and Eurasia at the University of Oxford.
“With the Trump administration every day every week, (that) changes a lot. So you really want to make investments based on these erratic policies? He said. “What’s going on in four years if there is a Democratic president?”
Rochlitz sums up the situation while waiting for companies to return to Russia: “at high risk and at low purposes.”