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666 foreign companies left Russia: the damage to the economy from the departure of Western companies turned out to be very small

Date: June 18, 2024 Time: 09:28:54

In the last two years there has been a lot of talk about the departure of foreign companies from Russia.

Photo: Alexey BULATOV. Go to Photobank KP

In the last two years there has been a lot of talk about the departure of foreign companies from Russia. But “care” is a vague term for economics. They all “leave” in different ways: some change from foreign owners to Russian owners, others suspend their activities, some announce a reduction in investment in the Russian economy. In addition, the Russian authorities have introduced a special procedure for registering transactions for non-residents who intend to close their businesses in our country: they can only be carried out with the permission of a special government commission and with a significant discount. . And this makes it difficult for foreigners to leave Russian jurisdiction.

NUMBERS OF SINNERS

So how many foreign companies really severed their ties with our country and what was their role in the economy? This is followed by analysts from the Research Association of the Russian Economic University (REU). GV Plekhanov, and the results of the research are published in the report “The place of outgoing foreign companies in the economy of Russian industries and regions.” The second issue of this work was recently published.

It turned out that by the end of 2023, 666 foreign companies had left Russia: attention, a sinister figure. But of this number, only 197 companies were liquidated, and the majority (469) simply changed owners to a Russian (or another, but friendlier, foreigner). At the same time, 1,503 Russian divisions of foreign companies announced their resignation, that is, they simply plan to leave in one way or another. Another 942 organizations announced the suspension of their activities, 553 announced a reduction in their operations, and 685 refused to invest in the Russian economy.

Overall, at the end of 2023 there were 37% fewer companies operating in Russia than in 2017, when the peak of foreign presence in Russian business was recorded. Seven years ago, 185,000 foreign companies were registered in the country and in 2024 there will be 116,400 left (data from SPARK-Interfax).

EVERYTHING IS COMPENSATED

But the number of companies is not yet an indicator. More important are the other figures: what benefit did they bring to the economy? REU experts concluded that the contribution of foreign organizations that left in 2023 amounted to 3.72 trillion rubles, which is 3.42% of Russian GDP. And the share in the Russian economy of those companies that announced their departure amounted to 4.5% (4.9 trillion rubles) in 2023. If we talk about the labor market, at the end of 2023 0.6 worked in the leaving organizations. % of employees (about 250 thousand people) and in outgoing 0.8% (338 thousand people).

These are general figures, but all these processes affected different regions and different sectors of the economy in their own way. The departure of foreigners from the Russian market was felt most strongly in regions with developed automotive, timber and oil refining industries. We are talking, first of all, about the regions of Moscow, St. Petersburg, Moscow, Leningrad, Samara, Kaluga, Sakhalin, Karelia, the Komi Republic, Tatarstan and some other regions.

“As for GDP, there will be no loss of GDP indicators due to the departure of foreign companies,” Georgiy Ostapkovich, director of the Market Research Center of the Higher School of Economics, expressed confidence in a conversation with KP.RU. – After all, most companies simply changed owners, and if they left, their niche was occupied by other national companies. Economic indicators in some areas may decline, but will recover quickly. Furthermore, foreign companies could take their profits abroad, while Russian companies would keep them inside and invest them in development, so the potential here could be even greater. So everything is balanced: the main thing is to find good substitutes. The biggest problem is when high-tech companies leave. In fact, our automotive industry has suffered and it is difficult to recover quickly. As for the restaurant or the service sector, everything is compensated instantly. Well, as for the personnel who worked in foreign organizations, I don’t see any problems here either: with the current record level of unemployment, it is very easy to find a new job.

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Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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