Bloomberg called Russia under sanctions a "reminiscence of the 90s"

The agency writes that, despite the departure of many businessmen from RUSSIA, the remaining ones are successfully replacing Western brands and establishing new logistics routes. However, according to BLOOMBERG,

Western sanctions did not bring down the Russian economy, but they gave a chance to young Russian entrepreneurs to successfully replace the departed brands and goods, despite the departure of many of them from the country. Bloomberg writes about this with reference to its own analytics and interviewed businessmen.

The agency compares the current period to a "reminiscence" of the 1990s, when the collapse of the USSR "left gaping holes in supply chains, forcing consumers and businesses to find creative ways to fill them."

Bloomberg points out that after the departure of numerous Western brands, Russian entrepreneurs either buy out their business or create equally successful analogues. Krispy Kreme donuts are now Krunchy Dream, Starbucks is Stars Coffee, and Pizza Hut is Pizza H.

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In addition, the Russians are discovering new logistics routes, replacing goods previously supplied from the West. Bloomberg cites the example of 37-year-old Muscovite Victoria Shelanova, whose sister, after the introduction of Western sanctions, could not find the equipment she needed for wakeboarding. This prompted the girls to look for manufacturers in CHINA, where they soon entered a factory that had previously made sports equipment for several large American companies. “In less than two months, they received a delivery of 20 [neoprene] vests. Once they have chosen the ones they like best, they plan to start ordering them in batches of 100 for sale in Moscow.

Bloomberg notes that after the European Union banned the EXPORT of luxury goods worth more than €300, the market for designer clothing and accessories in Russia is “thriving”. The agency conducted data, according to which in 2021 Russians purchased personal luxury items worth about €7 billion, which is up to 3% of the global market.

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Bloomberg also writes about Russian expats who successfully establish business with Russia while in friendly countries. One Russian businessman, who asked not to be named, told the agency how he set up a business importing Russian gold to Dubai. At the same time, receiving a 40% profit, he uses the proceeds to buy car parts or other equipment, which is then exported to Russia.

Despite the success of parallel imports in replacing some Western equipment, this does not mean that sanctions do not hurt, writes Bloomberg. Agency analysts compare the current situation in Russia with South Africa from the 1960s to the 1990s, when the latter faced sanctions due to apartheid. They believe that the Russian economy will continue to slow down "as barriers to trade and capital flows stifle competition and increase inefficiency." According to their estimates, last year the Russian economy contracted by 2.7%, and in 2023 it will contract by another 2.5%.

Von der Leyen promised Russia "decades of recession" due to sanctions Politics

According to the September estimates of the Ministry of Economic Development, GDP should have decreased by 2.9% in 2022, and by 0.8% in 2023. In 2024, the agency expects the economy to grow by 2.6% per year.

Putin stated,that the dynamics of the Russian economy turned out to be better than forecasts Economics

Moscow has repeatedly called the sanctions illegal and hurting those who impose them. At a meeting on January 17, Russian President Vladimir Putin emphasized that the dynamics of the Russian economy in 2022 turned out to be "better than many expert forecasts."