You can’t get a Happy Meal any longer in Russia after McDonald’s closed shop. The latest apps are barred from the Apple store and a swath of international and European businesses are grinding their operations to a halt after Putin’s invasion of Ukraine, writes Jonas Parello-Plesner.
Jonas Parello-Plesner, Executive Director, Alliance of Democracies Foundation, Copenhagen and non-resident Senior Fellow, German Marshall Fund, Washington DC.
As the inspiring Ukrainian President Zelenskyy put it in an international appeal: “Boycott imports to Russia – if they do not adhere to civilised rules, then they should not receive goods and services from civilisation – let the war feed them”.
In Denmark, supermarkets have removed Russian-produced goods of their own volition. Shipping giant Mærsk suspended operations in Russia. These steps were not obliged by EU sanctions.
Normally, business has kept away from the global battle of values with autocracies such as with Putin’s Russia and Xi Jinping’s China. Business has no business with that, was the rationale, with German business taking the lead in Europe on that approach.
Instead, companies have stuck to anodyne CSR- and ESG-reporting. And when they wanted to be daring, they added rainbow colours to their logo, while still happily doing business in Saudi Arabia. They have shied away from taking real action to defend freedom and democracy.
Russia’s invasion of Ukraine shows the fragility of our European democracies. Their strength depends on our willingness to defend them, including militarily. Ukrainian patriotism and willingness to fight for their political freedom is an inspiration. So far, the much larger Russian army is only advancing with brutality – such as indiscriminate shelling of cities including a children’s hospital. NATO, with the US in the lead, has taken the decision not to fight apart from delivering military assistance to Ukraine.
That makes economic warfare from business even more important and one of the free world’s best weapons. The Russian currency, the rouble, keeps sinking like a stone. EU and G7 sanctions are showing their effect. Oligarchs have had their yachts seized and Putin has seen a wrench thrown into the financing of his war machine.
But more needs to be done. Governments, consumers and business should collectively boycott Russian oil and gas. The increased market price does necessarily mean further petro-roubles flowing back to Putin. New European sanctions on oil should include third-party pressure so that other countries don’t just backfill Putin’s energy. When an ordinary EU citizen looks anxiously up at the unprecedented price at the pump, we need to also think about the ordinary Ukrainian fleeing cold and empty cities under Russian shelling.
Ukraine is our joint front line against Putin’s Russia. If he wins, he continues. Thus, he must be stopped. There are other sovereign nations in the post-Soviet space, Putin can label, as he already did with Ukraine, as ‘artificial states’, ripe for invasion, euphemistically described as ‘special military operations’.
Unfortunately, Putin is only one piece in the global autocratic power play. And he is not the only ones who thinks about invasions. Undoubtedly, China’s leader Xi Jinping is taking notes in the Communist Party’s Zhongnanhai. How would the world react to an invasion of Taiwan, the last free and democratic part of Chinese civilisation? How the war in Ukraine ends can decide how and when a conflict over Taiwan starts.
So far, China’s leaders have been surprised by the level of international sanctions and business resolve to cut ties with Russia. That should continue.
On the other hand, China now has time to study the current sanctions (the best the West can do) and can better prepare. China is also a different beast economically for Western companies. Apple only generates 2% of revenue in Russia but closer to 20% when it comes to China. In Europe, there is a similar picture, especially for German companies with a huge market reliance on China. Sanctioning China would hurt – both ways – at an unprecedented level.
Putin’s invasion leads to one simple conclusion: ‘Freedom does not come for free’. That also goes for business. Russian sanctions and business cut-offs should lead to a novel insight. There is a new business bottom line to defend: freedom and democracy.