Evgeny Shumilkin goes to work on Sunday. To prepare, he removed the familiar «M» from his McDonald’s shirt and covered the «M» on his McDonald’s jacket with a Russian flag patch.
“It will be the same buns,” promised Mr. Shumilkin, who maintains equipment at a restaurant in Moscow. «Only under a different name.»
McDonald’s restaurants are reopening in Russia this weekend, but without the Golden Arches. After the American fast food giant withdrew from a protest against President Vladimir Putin’s invasion of Ukraine this spring, the Siberian oil tycoon bought its 840 stores in Russia. Since almost all ingredients were sourced from the country, restaurants could continue to serve most of the same food, he said.
The gambit may just work, highlighting the surprising resilience of the Russian economy in the face of one of the most intense sanctions flurries ever imposed by the West. In the three and a half months of the war, it has become clear that the sanctions — and the flood of Western companies voluntarily leaving Russia — have failed to completely destroy the economy or spark a popular backlash against Mr. Putin.
Russia has spent most of Putin’s 22 years in office integrating into the global economy. Disentangling such large and such intertwined business ties is not easy.
To be sure, the impact of the sanctions will be deep and wide, and the effects are just beginning to show. Living standards in Russia are already declining, economists and businessmen say, and the situation is likely to worsen as import stocks dwindle and more companies announce layoffs.
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Some of Russia’s amateur efforts may not be up to Western standards. When the first post-sanction model of the Lada Granta — a Russian sedan produced jointly with Renault before the French automaker withdrew this spring — rolled off the production line at a plant near the Volga on Wednesday, it lacked airbags, state-of-the -art pollution control. or anti-lock brakes.
But the economic downturn is not as rapid as some experts expected after the Feb. 24 invasion. Inflation is still high, around 17 percent year on year, but it has eased from a 20-year high in April. A closely monitored indicator of factory activity, the S&P Global Purchasing Managers’ Index, showed Russian production rose in May for the first time since the start of the war.
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Behind the positive news is a combination of factors playing into Mr. Putin’s hands. Chief among them: high energy prices, which allow the Kremlin to continue to finance the war while raising pensions and wages to appease ordinary Russians. The country’s oil revenues have grown by 50 percent this year.
In addition, the deft work of the Central Bank prevented a panic in the financial markets after the invasion and helped the ruble recover from the initial collapse. Store shelves remain stocked for the most part, thanks to large inventories and the creation of alternative import routes through countries such as Turkey and Kazakhstan, and the fact that Russian consumers are buying less.
Even the new Lada Granta is less bulky than observers predicted: despite the lack of foreign components, it will still come with power steering and power windows.
“Things are not as bad as expected,” the Russian automotive website said.
The survival of the Russian economy plays into Mr. Putin’s hands, bolstering his claims that Russia will stand up to the West’s determination to destroy it. On Thursday, he met with young entrepreneurs at a town hall-style event in what was his latest attempt to show that even while he was at war, he was committed to keeping the economy functioning and foreign trade growing. He insisted that even if the West didn’t do business with Russia, the rest of the world would.
“We won’t have a closed economy,” Mr. Putin told a woman asking about the impact of the sanctions. «If someone tries to limit us in some way, he limits himself.»
For the wealthy, luxuries and iPhones are still widely available, but cost more and are shipped to Russia from the Middle East and Central Asia. The poor have been hurt by rising prices, but they will benefit from the 10 percent increase in pensions and the minimum wage that Mr. Putin announced last month.
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The urban middle class has been hardest hit by the economic upheaval. Foreign goods and services are now increasingly difficult to obtain, Western employers are leaving, and travel abroad is becoming difficult and prohibitively expensive.
But Natalya V. Zubarevich, an expert in social and political geography at Moscow State University, notes that many middle-class Russians have no choice but to adapt to a lower standard of living: