The report of the Ministry of Economic Development of russia states: in the first half of 2022, the number of citizens in russia who filed for bankruptcy increased by 37.8% compared to the same period in 2021. More than 121,000 citizens of the russian federation liquidated their assets to pay off their debts.
Contrary to the kremlin’s claims, there is a clear connection between the increase in the number of individual bankruptcy filings and the russian federation’s full-scale invasion of Ukraine.
After all, it was the sanctions implemented by the Western countries in response to aggression that caused a chain reaction.
It’s no secret that most representatives of small and medium-sized businesses in Russia built their activities in the field of IT technologies, advertising, pharmaceutical areas on cooperation with Western companies.
Sanctions introduced since the beginning of the military aggression affected almost every participant in the chain from production to sale.
Industry
The exit of the Swiss concern Sulzer from the Russian market blocked the work of Russian private companies specializing in the production and servicing of industrial machines and equipment.
The exit from the Russian assets of the American glass manufacturer Guardian Industries led to the closure of two plants in the Russian Federation.
Due to the withdrawal from the market of the Russian Federation and Belarus of the American manufacturer of thermal automation and refrigeration equipment Danfoss, 1,300 Russian and Belarusian employees were fired
Due to the massive quit of foreign brands from the Russian market, developers in the Russian Federation are forced to postpone the opening of shopping centers – not a single declared shopping center was opened in Moscow during the first half of the year.
Due to a lack of imported spare parts, the Renault-Nissan plant in Tolyatti is stopped, 35,000 workers are to be laid off
The Norwegian oil and gas giant Equinor’s withdrawal from all Russian projects led to the bankruptcy of four Russian joint ventures.
Army
Due to sanctions, military order realisation is diminishing. Despite wildly disseminated “import substitution”, russia can’t proceed with launching sophisticated weapons alone without further delivering imported hardware.
“Uralvagonzavod” is ceasing production of new machinery, including tanks “T-90” and “T-14” (Armata) through being in default of it.
The serial production of the russian civil airplane MC-21 will be postponed for 1-2 years due to Pratt & Whitney’s refusal to supply engines.
The works on the Mechanical factory of Ulyanovsk (the main producer of the radar systems and means of close and midrange anti-aircraft defense for russian Armed Forces troops (ZRK “Buk”, ZRK “Kub”, ZHRK “Tunguska”) has been ceased, actually because of a deficiency in german hardware and electronic components
Beauty
Up to 40% of the russian dyeing hair market has become grave for russian cities’ beauty centers running caused of the cancellation of the supply of professional cosmetic products from Germany (Wella) and France (L’Occitane).
The Franco-American beauty company Coty is leaving russia due to the war against Ukraine which results in bankruptcy and employee downsizing in beauty shops as the company owns approximately 80 perfume brands.
Quitting the russian market, the german producer of household chemicals and cosmetics Henkel has made 2500 co-workers redundant there.
Catering
Several russian product suppliers have faced bankruptcy after such American companies like Starbucks, Mcdonalds, and KFC, which chains of restaurants had been provided agricultural produce by them, left the country.
The stock of hardware and consumable materials to fit out private mini-bakeries in russia (90% of them are working on European equipment, import of which was banned by the EU) will suffice for a couple of months. In large cities of the country, bakery dependence on imported equipment, provided on the whole by EU countries, hits 80-90%, and in regions – 50-70%.
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From the beginning of the war, the loss of the advertising market reckons no less than 51 milliard rubles through the elimination of all foreign brands’ ads (50% of the market). Among other companies that have joined are Nestle, PepsiCo, Procter&Gamble, Volkswagen, L’oreal, Mars, McDonalds, Bayer ect.
In general, due to sanctions, 68% of russian small and medium business companies reduce expenses, and the most spread event is – the downsizing of staff. From international companies that are quitting russia 200 000 people will be laid off. Among “leaders” of firing – McDonald’s (62 тис.), Pepsico (19 тис.), IKEA (15 тис.), Yum! Brands (14,5 тис.), Inditex (8,8 тис.).
According to the forecast, 9 million russians will have become unemployed by the end of the year. For the vast majority of them, the epoch of surviving will begin.
However, in most cases, the sanctions have hit russian people and medium businesses, not the deputies that have triggered their implementation.
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