Will Western Sanctions Hurt Putin’s Russia?

Case Assignment 2
Will Western Sanctions Hurt Putin’s Russia?
International Marketing 1 – MKTG – 3001- OLA
Professor: Amanpreet Chhina Bajwa
Student: Trystian Dzionek – N01178176
Due Date- November 8th 2019, 1:30 p.m
Will Western Sanctions Hurt Putin’s Russia? 2

Why the Putin Government Decided to Pursue Legal Action Against the Members
of Pussy Riot

The case surrounding the Pussy Riot brings us to the beginning of a dramatic
discourse in Russian politics, a strategy used by turning to issues revolving around
traditional values and morality for shelter and political gain.

Putin’s Russia

You can say the Pussy Riot was simply a movement in the wrong place at the
wrong time. Nearing his third term in charge, the President of Russia Vladimir Putin was
in dire need of a new aura. From being the instilled guardian of the state in the early
2000’s, he fought off the boisterous governors and oligarch’s who controlled the country
in the ninety’s. He clashed against the West and their advances on the Russians states
democracy, guarding the true fundamentals and pride of Russia. He made policies that
were fruitful in economic growth, complemented by utilitarian tax reforms. Ultimately, as
a result he gained a mass of the countries support as the times reigned under the “Putin
majority”. Abruptly, this all changed with a distinct collapse of the majority in 2011-
2012, as grand fluctuations of Russian citizens in Moscow and other cities fled to the
streets with one goal in mind. To protest and voice their true hatred for the system Putin
build (Sharafutdinova, 2014). With this in mind, it was clear, president Putin had to
create and instill some sort of new reform, in which he can re-claim his true public
respect, have control, and to reposition himself on his throne, with a crown to match his
relentless desire of power. Within this re-incarnation he changed his political approach
towards basically “morality” that is underlined by culture, society. In a matter of weeks,
he set in stone the ultimate change from guardian of state, to guardian of traditional
values. Putin put on the perfect poker face during this façade of governing conservative
values from coast to coast, whilst using the country Russia itself as the perfect hand, by
Will Western Sanctions Hurt Putin’s Russia? 3

positioning it to the people as the true and only place to save the moral undertone of
western civilization. Which included a heavy emphasis of Russia being one of the last to
defend true Christian beliefs and values.

The Pussy Riot Trial

Furthermore, this is what I meant when I said wrong place and wrong time,
because the first true showcase of this new reform by Putin and his regime was aimed
right at the members of Pussy Riot and their unfortunate trial. The feminism, constant
protests, open hearts for gays, use of Western forms in performing their arts, whilst
having opposition to various aspects of the church. In a normal democracy, these women
have the right to opinion, speech, and protest. The main reason legal action was pursued
was, because in this circumstance, this was no utopia, it was Vladimir Putin and the
Kremlin’s new strategic spin on gaining control, and the Pussy Riot contradicted every
fathom of it. He used these girls as a stage or example to show in Russia, all forms of
alternative thinking, has no room, no place in his morally perfect country. This trial was
truly a signaling moment in Russia within its never-ending capricious politics.

The Wave of Change

In my opinion, this trial and the prison sentences show how ruthless individuals,
groups or regimes, and sometimes politics can be. Fronting values and morality when in
hindsight, the hands of greed, manipulation, and corruption are twisting it to me is truly
disturbing. Furthermore, very naturally Putin and the Unorthodox Church alliance grew
in immediate strength, backing him and further encouraging his actions. As far as church
officials referring to Putin era as “a miracle of God” (Brianski, 2012). Keeping in mind
this was done after the members of the Pussy Riot were released and backlash was
served. I will say Putin is a man that sticks to the plan; he sure does not bend or fold.
Within those initial years he even brought it upon the education system with special
textbooks to have a routine and structured way to teach Russian history, values, and
culture. To show his sheer dedication, an unbelievably ironic quote can be read from
Will Western Sanctions Hurt Putin’s Russia? 4

2012, when the President addressed the Federal Assembly as he illustrated that “Russian
society suffers from apparent deficit of spiritual values such as charity, empathy,
compassion, support and mutual assistance” and pointed out the importance of building
“environments for creating a moral, harmonious person, a responsible Russian citizen”
(The Kremlin Moscow, 2013).

Ending Comments

In conclusion, the legal action revolving around the Pussy Riot was used as a tool
in a very strategic political strategy, to maintain power and change the dynamic and
discourse of the citizens who lived in Russia and opposed the Putin regime. In all essence
trying to hide the true fact people where suspicious about the lying, selfishness, cynical
behaviors, corruption and most importantly the immoral ways they make steps in politics
and life.

In, 2015 Russia’s Economy Ministry Was Predicting That a Recession Brought on
By Sanctions Would Last A few Years

Since early 2014, it was quite clear the Russian economy was on the verge of a
downward cycle and their economy would be first to reap the casualties. This case is a
clear example how international trade can be a means of governing peace globally, or
used as a disciplinary weapon to govern against what’s right and what’s wrong on a
global scale. Technology, media, and the sheer essence of the past and present, had
clearly caught up to Russia. The Russian government has an indistinct record of operating
for the benefit of oligarch’s and government elites. Ultimately, certain actions, initiatives,
and operations that Russia part took in, didn’t follow suit with many countries, counsels,
and officials around the world. U.S Treasury Secretary Steven T. Mnuchin summed it all
up by stating “The Russian government engages in a range of malign activity around the
globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine,
supplying the Assad regime with material and weaponry as they bomb their own
civilians, attempting to subvert Western democracies, and malicious cyber activities.”
Will Western Sanctions Hurt Putin’s Russia? 5

(U.S. Department of the Treasury, 2018). Due to many disheveled instances like these,
many countries around the world, had agreed on a way to respond and deal with Russia,
by imposing sanctions. Close to having an economic recession before sanctions hit,
mainly due a surge in falling oil prices. The new addition of multiple fines and barriers
brewed a recipe for hard times in upcoming years. In a country plagued with an over
dependence on exporting natural resources, this was time for the people of Russia to
buckle up.

Current Economic Situation - The Peoples View

When looking at the countries current economic situation it raises quite the debate
worldwide, it’s truly is a narrative full of myths, ideologies, even rumors. So, in getting a
better understanding, I started my research on the true authors at hand; the people of
Russia. I used this opportunity to do research on the views and opinions of the people
varying from all social classes. In all essence, and in brutal honesty it lead to one
conclusion, things are moving very slowly. It’s been a handful of years, and economic
growth from the past into the present has been weaker than most expected. Many senior
authorities are imploding with worry and concerns, even the likes of Alexei Kudrin, a
veteran associate to Putin and head of the Accounts Chamber. Kudrin very recently
voiced his opinion publically saying the economy has essentially fallen into a stagnant pit
and pointed out “over the past ten years, the average economic growth rate was 1%, such
low rates have not been since the Second World War” (Trunina & Feinburg, 2018).
Working alongside the president for many years he seems to have different incentives to
ease this ongoing economic problem, like an increase in spending on education and
health and focus on mending relationships with the west.

The Unpopular Plan

The president on the other hand, Vladimir Putin has different ideas in store, his
goal is to make Russia one of the top 5 economies in the world whilst he holds control
during his upcoming 2018-2024 presidency. Putin plans to spend 8 trillion rubles ($120
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billion) on infrastructures, technology, investments, and social issues which is all stated
in a decree he signed after his inauguration in May (The Moscow Times, 2018). His goal
is to cut the countries poverty in half and increase natural population growth, whilst
sticking to his traditional methods and global presence. Kudrin was quick to undermine
the methods planned by the president stating, “We must clearly understand: If sanctions
are ramped up, the goals that the president has set will become practically unattainable on
many of the indicators” (The Moscow Times, 2018).

Familiar Mindsets

It seems many people agree with Kudrins testimonies, as many oligarchs for the
first time don’t even plan on repatriating capital into Putin’s plans, nor welcome his calls
on such economical solutions. Billionaire Vladimir Lisin stated “the proposed method of
creating an extra tax base looks like encouragement for inefficacy and future hardships”
(Reuters, 2018). To this day, the business economy is still affected by the sanctions. It is
reported that forty percent of business leaders and elites say that sanctions are hurting
their business to this day (Gould-Davies, 2019). According to Levada Center (2018),
“79% of the general population now wants to see relations with the West normalized”.
Even China backed out in the presence of sanctions, together with the unpredictable
bureaucrats, they concluded Russia’s markets are too risky. According to
(Karasyuk,2018) “Its reported less than 1 percent of China’s foreign direct investment
goes to Russia”.

Ending Notes

Ending on a positive note, trying to forget the previous year’s unpredictable

inflation, high poverty, lack of proper incentives. Towards the end of the year, it seemed
strong for Russia’s corporate scene. The Russian stock market jumped to a record high,
the future GDP forecast looks quite solid, more employment opportunities are in motion
with a steadily lowering inflation rate for the end of 2019… a possible factor showing
glimpses that slowly but surely Russia will in fact gain its momentum. In conclusion, the
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truth is clear, these sanctions have worked tremendously in making Russia pay back for
its behavior’s and are the perfect means to punish and slow down a country that causes
threats with its dysfunctional political environment.

As the Chief Marketing Officer of a Global Company, Would You Recommend

Establishing Operations in Russia

This is a very tough question to answer especially when trying to eye it out in a
general sense. There are many factors that need to be weighed in order to see if the
puzzle piece even fits. Generally, with how things have been going in Russia, the first
thing that comes into anyone’s mind is a long old list of negatives. I would assume many
people wouldn’t even consider the idea. Although, with me being an International
Business student we put ourselves in many scenario’s some good and some
excruciatingly difficult. In essence, it has taught me to pick up on things the average eye
wouldn’t see.

The Decision

In this case, if I were a chief marketing officer I wouldn’t think twice in

recommending establishing operations in Russia. Sometimes in business, marketing, or
being successful in any sense you need to take risks. When taking into consideration the
shape of Russia domestically and globally at the moment, it sure poses many risks, but it
also did five or ten years ago. The first thing I learned in international business, which I
always use to base many of my decisions on, is the world is always changing, so I never
judge making investments on the present. A critical step to knowing if you’re making the
right choice is to simply look ahead. Forecasting the future can tell you many things, if
you look at the weather for the week ahead of you and it calls for rain, you will now
know to bring an umbrella to work.
Will Western Sanctions Hurt Putin’s Russia? 8

The Reality

When I look at Russia, I see a rose growing in the concrete. I may advise my
client or company to be patient as it is very apparent there are many current factors within
the country’s economy, global presence, and politics that might pose threat to new
business’s trying to soak in the benefits of expanding globally. For instance, as
mentioned before the sanctions posed by the EU and US can be a hit or miss if it impacts
or limits the intended operations of the company or business.
Another reason I’d recommend to stay patient is in the sole fact countries who are
experiencing problems in their economy tend to naturally exhibit higher levels of
corruption. While, the corruption in Russia has always been seemingly hard to quantify,
in times like these it’s not just the government and extremely rich, it can be anyone who’s
just trying to survive hard times to feed themselves and loved ones.
Nonetheless, it never hurts to take a step back and start preparing; sometimes it takes
years of preparation and research for a company before actually making the move. If I
remember correctly it took McDonald’s a full six years.

The Reason

As noted earlier, the main benefit I see in expanding in Russia will come in the future
anyways. If you can’t guess by now, it all has to do with President Putin’s incentives to
juice up Russia’s economy with a staggering $120 billion, which is planned to be
distributed into new evolving infrastructures, technologies, addressing social issues, and
other various investments. Which was all stated, signed, and promised in a decree during
the inauguration of President Putin’s new term. It doesn’t end there; he wants to cut
poverty in half, which only equates to more money being circulated for the average
consumer. Putin also plans to increase population growth, which by all means equals
more customers. Preparing for such an opportunity like this may not happen in a very
long time or even a lifetime. The companies, services, and businesses that put themselves
Will Western Sanctions Hurt Putin’s Russia? 9

in a position to be on the frontline of this opportunity will surely have high chances of
success.

Ending Note

There is just one last issue, and it hovers around judgment. When will be the right time to
execute the move, if you cross the sea too early, Russia might chew you up and spit you
back out before you even get to witness this revelation. If you come too late, you lose the
competitive advantages that come along being the first to infiltrate a new market,
resulting in a constant climb up the totem pole. A flawless execution would have your
company there and known by locals and consumers before the grand investments, but
also at a time where Russia as a whole will be ready to welcome you. With all of this
said, the last thing I will recommend as a chief marketing officer is never put a limit on
your preparation, analytics, knowledge and vision of success.
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References

Brianski , G. B. (2012, February 8). Russian patriarch calls Putin era “miracle of God.”
Retrieved November 5, 2019, from https://uk.reuters.com/article/uk-russia-putin-
religion/russian-patriarch-calls-putin-era-miracle-of-god-idUKTRE81722Y20120208

Gould-Davies, N. G. D. (2019, January 20). Russia Sanctions: Myths and Lessons.

Retrieved November 5, 2019, from
https://www.chathamhouse.org/expert/comment/russia-sanctions-myths-and-
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Sk48bVq4xJPpFNVIry2zm4a7fY8aAj4VEALw_wcB

Gould-Davies, N. G. D. (2019b, January 20). Russia sanctions: Myths and lessons.

Retrieved November 5, 2019, from https://thehill.com/opinion/international/426193-
russia-sanctions-myths-and-lessons

Karasyuk, E. K. (2018, October 16). Unfinished bridge. Why is China investing so little
in Russia. Retrieved November 5, 2019, from
https://republic.ru/posts/92287?code=9a26e685357947dcc8a451256da676c8

Levada-Center. (2018, December 7). SANCTIONS. Retrieved November 5, 2019, from

https://www.levada.ru/en/2018/12/07/sactions/

O’Brien , C. O. (2018, April 6). Trump Admin Takes 'Most Aggressive Action' Against
Russia Yet. Retrieved November 8, 2019, from
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russian-oligarchs-n2468428

Reuters. (2018, August 10). NLMK’s Lisin warns against higher Russian mining taxes.
Retrieved November 5, 2019, from https://uk.reuters.com/article/russia-budget-
mining/nlmks-lisin-warns-against-higher-russian-mining-taxes-idUKL5N1V118L

Sharafutdinova, G. S. (2014, April 17). The Pussy Riot affair and Putin’s démarche from
sovereign democracy to sovereign morality. Retrieved
from https://www.academia.edu/9472356/The_Pussy_Riot_affair_and_Putins_d%C3%A
9marche_from_sovereign_democracy_to_sovereign_morality

The Kremlin Moscow . (2013, December 12). Presidential Address to the Federal
Assembly. Retrieved November 5, 2019,
from http://en.kremlin.ru/events/president/news/19825

The Moscow Times . (2019, November 8). New Sanctions Risk Wrecking Putin’s 6-Year
Plan, Kudrin Warns. Retrieved November 5, 2019, from
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https://www.themoscowtimes.com/2018/10/10/new-sanctions-risk-wrecking-putins-6-
year-plan-kudrin-warns-a63146

Trunina, A. T., & Kudrin, A. K. (2018, November 27). Kudrin said about the Russian
economy that has fallen into a “stagnant pit.” Retrieved November 5, 2019, from
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U.S Department Of The Treasury. (2019, October 22). Treasury Designates Russian
Oligarchs, Officials, and Entities in Response to Worldwide Malign Activity | U.S.
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