William Randolph Hearst told his reporter and cartoonist from the front during the Spanish-American War of 1898, which they also called the "News" war: "You finish the drawing, and I'll finish the war...", and it seems that's the case now. with Ukraine, someone tweeted to someone: "You somehow end the war, and I will continue the work..." The war conflict in Ukraine is freezing, one would say not so much by the will of the generals, the and insurgent leaders, politicians and misunderstood pacifists, but by the will of businessmen - those most exaggerated players.
The withdrawal of heavy weapons from the cities, a buffer zone between the warring parties of 30 km, a ban on flights over eastern Ukraine, the withdrawal of foreign mercenaries and heavy equipment from the territory of Ukraine - this is the result of the new nine-point memorandum, which, after long negotiations, was signed early in the morning on the 20th. signed in Minsk in September. It is an elaboration of the cease-fire agreement reached, also in Minsk, on September 5, which has meanwhile been partially respected, with fiercer fighting at several critical points (Donetsk airport, Gorlovka, Debaltsevo) and mutual accusations of ceasefire violations.
It may be interesting that before that second agreement from Minsk, on Sunday, September 14, at the headquarters of the World Economic Forum in Geneva, billion-dollar businessmen from Russia, Ukraine, the USA and the European Union met at a private dinner - representatives of very large corporations such as are Germany's BASF and Siemens, Russia's Sberbank and Severtsal, Ukraine's KM CORE, America's Ernst & Young and PepsiCo... In 10 points, they formulated the Geneva Initiative for Ukraine, which is offered international security guarantees and recommends that it consider implementing the policy of neutral military status (like Sweden and Finland, which Henry Kissinger mentioned earlier as an idea).
By the way, they pointed out that it is also important to determine how to abolish the existing and retaliatory sanctions.
photo: fonet / ap…and a destroyed tank in Ukraine
GUESS WHO CAME TO DINNER: Anatoly Chubais, a one-time strategist of liberal economic reforms who is currently the head of the Russian state-owned technology company Rusnano, traveled to Geneva from Russia. The head of VTB Bank (former foreign trade bank Vneshtorgbanka - currently under sanctions) Andrey Kostin was there, as well as Aleksey Mordashov, director of Severstal, whose factory Yuzhorsky trubnij zavod works on the Yakutia-Khabarovsk-Vladivostok gas pipeline "Power of Siberia".
Victor Pinchuk, founder of the international investment group Easton (one of the richest Ukrainians, according to Forbes, worth 2,150 billion dollars), traveled from Ukraine to Geneva. He voted for Yanukovych in all three rounds of the 2004 presidential election, declaring: "I cannot be a political prostitute", although during the Orange Revolution he visited Independence Square, saying that if he had been a student, he would certainly have been there.
On the Ukrainian side, Sergey Alekseyevich Taruta, the acting Ukrainian governor of the Donetsk region in Mariupol, co-owner of the metallurgical corporation Industrial Union of Donbass (ISD) based in Donetsk - in which the controlling package of shares belongs to the Swiss company Carbofer, and some say that behind everything is actually hides a pool of Russian investors.
Ukrainian-Russian entrepreneur Yevgeny Utkin, president of the corporation, was also there hi tech holding company KM CORE, which represents Intel, Oracle, Microsoft ("businessman of the year" in Ukraine in 2007 and laureate of the competition "Top 10 Managers of Russia", who from 1998 to 2001 was the president of the Council of Employers at the Cabinet of Ministers of Ukraine).
So Mark Weinberger, CEO of Ernst & Young, a global leader in the field of insurance, transactions and advisory services, a company that has had an office in Moscow, St. Petersburg since 1989. Petersburg, Novosibirsk, Yekaterinburg, Kazan, Krasnodar, Tolyatti, Yuzhno-Sakhalinsk... One of the company's analyzes refers to investment priorities in Russia - these are infrastructure projects of which only the railway is at a satisfactory level, while other communications are not. Realization of those infrastructure investments relies on Western technology, and Russia's conflict with the West threatens Russia's ability to attract capital.
photo: reutersPARTNERSHIP AND SANCTIONS: Russian Prime Minister Medvedev with directors of German Siemens...
Those who started megaprojects there did not sit idly by, of course. Kurt Bock, the president of BASF, a chemical company with 109.000 employees, has an annual income of 63,9 billion dollars (one and a half of Serbia's GDP), and has been present in Russia for 130 years (it built a textile dye factory in 1874). Its portfolio includes oil and natural gas, chemicals, plastics... In addition to Russia, the BASF concern operates in Ukraine, Belarus, Kazakhstan, Azerbaijan, Uzbekistan...
Did anyone expect that Joe Kesser, director of the German corporation Siemens, which in 2013, in the 160th year of business in Russia, sold technologies and goods for 2,17 billion euros and contracted jobs for another 2,04, would not appear in Geneva. XNUMX billion euros.
Siemens makes turbines for the Perm power plant, steam turbines for the Kurganskaya thermal power plant, compressors for the Yamal liquefied gas plant, a briquetted steel plant for the Lebedinsky mining company, high-speed trains on the St. Petersburg - Moscow, with a memorandum of understanding for the production of 675 locomotives for Russian Railways by 2020, diagnostic equipment for Moscow hospitals...
...and "Rosneft" reservoirs in which "British Petroleum" has 20% ownership
TO LEARN, TO LEARN, TO LEARN FROM PEPSICO: The director of Alcoa (Aluminum Company of America), the third largest aluminum producer after Rio Tinto Alcan and Rusal, and of course Klaus Kleinfeld, president of the American company PepsiCo, present in Russia since 1959, participated from the USA.
Pepsi went there after the famous TV "Kitchen Talk" (kitchen debate), between Dick and Nick - American President Nixon and General Secretary of the CPSU Khrushchev - in a model kitchen of a "typical American house" in 1959 at the American exhibition in Sokolniki Park in Moscow, about whether it is better to build refrigerators or rockets, and who threatens, and who is stronger. The "New York Times" writes under the title "Cold War in the Hot Kitchen" that the head of PepsiCo at the time, Donald Kendall, who was a friend of President Nixon and also knew Khrushchev, had a "great idea"...
In 1972 (Khrushchev had already been replaced by Brezhnev), PepsiCo reached a deal to produce the Soviet version of Pepsi-Cola in the USSR and import vodka to the USA.
In 1990, PepsiCo signed a major trade deal in Russia (Pepsi-Cola's second market after the US, 8 percent of turnover). That's how she withstood the pressure of the Coca-Cola company.
Several more American corporations, such as Ford, Nike, McDonald's, Boeing and John Deere, have investments in Russia, but not like Pepsi, because entering that big country was not easy, it is necessary to invest a lot in the distribution network, and there are many " red lines".
America's National Public Radio, entitled "What PepsiCo can teach us about the power of soft drinks in Russia", draws the conclusion: if America wants to show soft power (soft power), must sell something else there besides soft drinks (soft drinks).
While Moscow is an important trade partner for Europe (373 billion, 40 percent of Russia's foreign trade in 2012), the US does business there 14 times less - by about 27 billion), states the author of the article "Bad company" in the American magazine "Foreign Affairs".
RUSSIAN DAMAGE CALCULATIONS: American estimates say that the Russian economy is in trouble (in 2013, GDP growth slowed down for the fourth year in a row and amounted to only 1,3 percent, in the first half of the year, about 60 billion dollars left Russia, the S&P agency lowered Russia's sovereign currency rating to just one point above bad). The newspaper writes that international banks are less and less deciding to provide loans to Russian state banks and companies. German Gref, the head of Sberbank affected by sanctions, observes the same thing, but with a different point: he says that the latest wave of EU sanctions does not affect his bank, because even before the introduction of sanctions, there was not as much money in the West as the Russians are looking for.
President Vladimir Putin is still defiant, because the West has no way to impose a high enough price on him, writes the American "Foreign Affairs". Russian Prime Minister Medvedev claimed that the sanctions affect Russia's economic difficulties by only about five percent.
In the Russian public, the memory of sanctions being a favorite weapon of the West was revived, that is, that after the revolution of 1918, Western countries imposed on the Soviet Union: a trade and maritime blockade, a "gold blockade" (the Soviets were not allowed to pay for imports with gold), a credit blockade , various bans on the import of goods from the USSR due to "Soviet dumping" (matches in the USA), and also bans on the import of goods from the USSR (timber) due to the fact that their production uses prisoner labor, free labor and forced labor.
England was the first to leave the trade front of those capitalist countries, when Prime Minister Lloyd George declared that Britain would trade only with the Russian people and Russian cooperative organizations. Already in January 1920, the Entente lifted the trade blockade against Russia, which in 1920 semi-legally exported goods to 7 and imported some goods from 16 countries, but already in 1924–1925. it exported goods to 33 and imported from 38 countries.
Moscow has now (2014) responded to the latest Western sanctions by restricting the import of agricultural products, it has so far only announced its response to the new package of sanctions, and in the meantime it has been looking for new suppliers in the BRICS countries. Yes, she made a big gas deal with China…
In the course of tightening around Ukraine, Russian analysts were clearly more concerned about the drop in oil prices below $100, and thus the related gas prices, than the consequences of the sanctions. They conclude that this was partly due to increased production in the US, partly due to the slowdown in the rate of economic growth in the EU, and mostly due to the reduced demand for oil in China.
"One market cannot be ignored," writes The Economist, quoting a Wall Street insider as saying, "This is China's century, but not every year will be its year." When China has a bad year, everyone will panic."
A more important item than sanctions according to Russian calculations are damages due to the interruption of industrial and trade ties with Ukraine. The Russians are actually looking for time to develop their production in the field of military and metal industry (rocket parts, helicopter engines) supplied by the metal complex of Ukraine. Maybe they are hoping for a sequel. Putin, for example, recommended that the banks of the Russian Federation, regardless of the difficulties they face, should continue to work in Ukraine, where they control about 30 percent of the banking sector.
AGREEMENT WITH THE EU RATIFIED AND POSTPONED: The free trade agreement between the European Union and Ukraine (AA/DCFTA) was ratified by both the European and Ukrainian parliaments, but the implementation of that agreement was postponed until the end of 2015 by the agreement between the EU, Russia and Ukraine of September 12, announced the EU Commissioner for trade, Belgian Karel de Gucht.
Russia is demanding a review of the provisions of the EU-Ukraine agreement in some 114 items and has announced that, if the agreement enters into force on November 1, 2014, it will end the customs privileges applicable to the market of the Commonwealth of Independent States (CIS) and raise tariffs on Ukrainian goods .
Ukraine, which was in a hurry to sign an agreement with the EU, also needs time to adjust. The Ukrainian Ministry of Foreign Affairs stated that the tripartite agreement (EU, Russia and Ukraine) allows finding a balance between the implementation of Ukraine's free trade agreement with the EU and the extension of the free trade regime with Russia within the framework of the agreement on the free trade zone of the Commonwealth of Independent States. . The current deferral agreement maintains privileges for Ukrainian goods on the CIS market.
The Western media, which actively supported the Western intervention in connection with the Russian danger, welcomed the delay. David Stern, a BBC commentator in Russian, noted that the tripartite agreement is a "big concession to Russia", and that the question is whether it signifies complete surrender. The BBC quoted an unnamed exasperated diplomat as saying "everything looks like Munich 2014".
The Chairman of the Foreign Affairs Committee of the European Parliament, German politician Elmar Brock, however, explained to Deutsche Welle why the agreement between the EU and Ukraine will only enter into force at the end of 2015: "I would like to explain it with an example from the past." Since the Soviet Union collapsed in 1991, there were no longer any plans for the East German economy to supply certain types of goods to the Soviet Union in 1994 and 1995. As a result, the East German economy could not withstand the competition and experienced a collapse. That cannot happen now, thanks to this procedure with Ukraine..."
Brock claims that nothing is being postponed, but that a contract is being concluded, the implementation of which will be asymmetrical in certain technical parts. For example, there will still be no customs duties on Ukrainian products in the EU - as was already the case during the provisional implementation of the agreement. But Ukraine may still impose tariffs on certain products.
DEPTH OF THE UKRAINIAN CRISIS: Despite the standing ovation for President Poroshenko in the US Congress, Ukraine cannot bear the burden of a war in which its military has proved unsuccessful. President Poroshenko said in an interview with Ukrainian television on Sunday evening, September 21, that between 60 and 65 percent of Ukrainian military equipment that was engaged in the frontline of the anti-terrorist operation in the eastern part of the country was destroyed.
Due to damaged economic ties with the Russian Federation, Ukrainian exports decreased by 2014 percent in 19 and are still decreasing. The portal "Business Insider" writes that the aircraft manufacturer "Antonov" is losing 150 million dollars because it did not sell the An-148 series to the Russians.
Ukraine's gross domestic product fell by at least five percent and industrial production is collapsing. The rate of hryvnia inflation exceeds 14 percent, the debt is growing and many economists believe that the bankruptcy of Ukraine is increasingly likely. While the first snow is already falling in the Urals, the Russians are not relenting in negotiations with the Ukrainians on the price of gas, and even with various technical excuses, they are turning off the tap to Poland and Slovakia for sending so-called "reverse gas" to Ukraine.
COMPANIES AND GEOPOLITICAL RISK: The consequences of the Ukrainian crisis threaten to spill over the world. London's "Economist" quotes Henry Kissinger, the doyen of foreign policy strategists, who in a new book describes a world threatened by disruption due to violence in Ukraine and the Middle East and tensions in the South China Sea. In theory, after twenty years of global expansion, multinational companies are at risk more than ever since Western firms generate 20-30 percent of their revenue in developing markets, which is twice as much as in the mid-XNUMXs. oilmen, hi tech magicians and sellers of designer handbags face political risks, currency instability and restrictions on repatriation, as well as disruptions due to sanctions or even nationalization.
Still, The Economist concludes, none of the recent geopolitical turmoil has had much of an impact on companies or financial markets – because conflict-ridden regions are politically important but economically small.
The Middle East, North Africa, Russia and Ukraine together make up only seven percent of the world economy. In these zones, only two percent of foreign investment shares are held by American, Japanese and British companies. Only a dozen large, global companies realize more than ten percent of their sales in Russia.
PepsiCo, Carlsberg, Adidas, Societe Generale and others have seen their shares fall or suffer as the West's relations with Russia deteriorate over Ukraine. The "Russian losses" of the most exposed Western companies, according to "The Economist", amount to about 35 billion dollars, but this is still a drop in the multinational ocean.
British Petroleum (BP), Russia's largest foreign investor, only has about a 10 percent stake in oil giant and sanctions-hit Rosneft. McDonald's in Moscow, once a symbol of easing tensions, has temporarily closed its restaurants as part of an "eye for an eye, tooth for a tooth" policy, but the burger giant makes less than five percent of its profits in Russia. The central nervous systems of multinational financial companies and computer servers - are still in the West, in Singapore and Japan.
After the revolution in China in 1949, HSBC, at that time a purely Asian bank, lost, for example, half of its business. The Iranian nationalization of the assets of the Anglo-Iranian Oil Company in 1951 devastated the company that gave birth to BP.
In the years 1973, 1979 and 1990, the price of oil transmitted the effects of the unrest in the Middle East around the world, but the oil market has changed since then, and America has a lot of shale gas. After those experiences, most large companies followed a policy of geographic diversification and spread their risks well.
While under the slogan that there is no united Europe without Ukraine, Poland and the Baltic states, supported by the USA and Great Britain, demanded stronger sanctions - corporations lobbied against the sanctions. 6200 German companies work with Russia and have invested a lot there. German BASF, Austrian OMV, Italian ENI, British BP (owner of 20 percent of the shares in the Russian energy giant Rosneft, which is under attack by sanctions) lobbied against the sanctions. As part of the sanctions, the French oil company Total suspended exploration work in Western Siberia with Lukoil, and the American Exxon Mobil Group announced that it is continuing work, albeit at a slower pace, on wells in Siberia, despite pressure from the US administration.
Several CEOs of major corporations, including Siemens, have visited Putin in recent weeks, and those from Adidas, ThyssenKrupp, and Deutsche Post have criticized EU politicians for their approach to Moscow and spreading fears of energy dependence on Russia, even though Russia during the Cold War and during the tensions after the intervention in Georgia, it remained a reliable partner, so gas continued to flow to Europe.
Like countries, multinationals have no permanent allies, only permanent interests.
