@Hawkins001
This is not my comment or analysis but one I thought may intrigue some readers here who can better analysis it.
"I fully support Ukraine's fight against Russian invasion, sanctions, etc. I'm truly curious how this is intended to work. Does cutting off Russians feeding Russians somehow help? I get targeting and boycotting their economy to coerce and hurt their military advance, and then the Russians in their Govt. But if McDonalds (or Western corporations) aren't providing the resources and trade and it's self sufficient, and it impacts the Russians working and eating there, how does this impact the Russian invasion, unless it's just one more (small) way to our pressure on Russians to push against their govt. The cutting off of food also reminded me of the Berlin Airlift, where the West had to airdrop countless tons of food to starving people stuck on the Communist/Socialist side of the wall, none of their own fault. Is that where we're headed with this too? We planning to try to cut off enough critical resources and starve the Russian people in hopes it forces Putin into retreat? Again, I'm not fully understanding the impact of this move when it's Russian people working and feeding Russian people, not the govt or military, so if it's just a politically savvy gesturez then call it so, because it doesn't seem to do anything to hurt their economy or resources if their McDs are all self sustained with locally sourced supplies.
From a 2019 article:
"With tensions building between the U.S and Russia, Russia placed a mandate on McDonald’s to use local distributors for their menu items. Since 2018, McDonald’s has been using locally sourced products for 98% of items. They began using Russian-grown potatoes and a Russian factory is used to produce the original McDonald’s french fry, along with Country Style Potatoes for all Russian franchises."
www.thetravel.com/best-mcdonalds-food-russia/ "
Hi
@Hawkins001 I appreciate you posting this with a nice tone, genuinely: this exact type of comment is actually pretty much why I made this thread. I do believe it be well-meaning but it is bang your head against a wall inaccurate. I'll drill down a bit into some of the fallacies.
@Gladioli23 has done a great job and made very good points.
1: cutting off Russians feeding Russians, 'critical resources': BEEP! Russia is one of the biggest grain producers in the world. If there is hunger, it would be a political decision. McDonalds etc are also not key to keeping people fed. As you said, they source their materials in Russia. But these are cheap and most of the value added (and hence income for the Kremlin) is for the addition of the McDonalds-ness on top. If you are saying these potatoes are and will stay in Russia, how does cutting them into curly fry shape stop starvation when a round potato won't? You will notice as well that people have not been trying to force eg health companies to cut off Russia. I would not want to see e.g. no ability to get insulin, regardless of the fact this is happening to those in Ukraine.
2: the point about not understanding how sanctions that impact ordinary Russians affect anything: BEEP! This is a very fundamental lack of understanding of what an economy is. How it works, and how a government makes money. I'll break it down.
Firstly: Russia is on a war footing, putting government money towards the war effort. And an increasingly high level of it. This is not a government that tends to spend it's money for the good of citizens. We don't want them to keep getting this money, because it pays for bombing civilians. Running a war is exceptionally expensive. It's the foreign policy equivalent of using a Bentley to tow a Bentley. So: we are agreed that we want to cut off the money going into the Russian war machine.
BUT remember Russia is a society where wealth is highly concentrated and where the state has little respect for private property. There is no clear line between state and citizens. There is no one bank account marked 'government' and one marked 'citizens.' For multiple reasons.
So Chanel is no longer selling handbags, IKEA is no longer selling bookcases. Why does this negatively affect the Russian war? Well firstly they are no longer importing goods, paying import taxes, paying for shipping handled by Russian companies that pay taxes. They are no longer sold in shops that are paying taxes (eg the Russian versions of business rates, etc: please don't quiz me) and paying bills to state-owned companies. And they are no longer paying corporate taxes (please don't quiz me on Russian tax policy...). They aren't paying for fancy Russian-based lawyers and accountants.
Basically: in short, an entire circular economy of wealth generation had ground to a halt, with devastating effects for the national coffers. IE for the Kremlin war machine.
As well as this, they are no longer paying for advertising. And this is a BIG one. Because Russia has basically shut down independent media. So e.g. McDonalds would essentially be handing over money directly to the Kremlin otherwise. We're talking billboards and tv and magazines and radio and the whole lot.
And eg McDonalds is a global company, the idea of all of these companies being 'self sufficient' shows a lack of basic understanding of the globalised economy. It's just simply untrue, it hasn't been for a very long time. Even if the food raw ingredients are, this is actually one of the very low end of the expenses of running McDonalds. The economy is highly globalised and the point is to stop these flows into and out of Russia that generate the funding for the war machine.
And why is having money sloshing around in bank accounts in Russia undermining sanctions? Because banks having this in their accounts stops them going bust, it allows them to prop up the government, it stops economic contagion, and they can lend this e.g. McDonalds money towards e.g. paying for the next round of cluster munitions. Remember the major recessions we have seen: banks having issues with liquidity (ie liquid assets like money) screws the economy. The government are forced to intervene: but sanctions targeting the central bank stop them from using these tools. So the economy crashes and the Kremlin is screwed.
Also, these banks have big loans to other banks or foreign countries that they need to pay back on set timelines. Now they don't have mine to do this. Fuck. So they start down the death spiral, and Russia is now a BAD place to invest.
Let's say I'm a businessman in India, I make investments and do loans. Russia's banks are screwed, so I won't be loaning them money. Also their economy looks terrible, so I won't be investing e.g. in the infrastructure project there: I'll invest in one in Japan instead. Now Russia is a pariah when it comes to investment, no money is flowing into it from companies or states beyond the sanctions list, because it is no longer favourable.
Or let's say I'm a manufacturer of tyres in Russia. I can no longer get certain parts I need through the established supply routes, if I do get them I have to pay more and face disruption. My output and my sales are affected. I can no longer access the bank loans I would usually use as part of my process. I am now no longer paying so much VAT or company tax. I am also no longer apply to supply the amount of new tyres Russia needs for its military.
This is all an absolutely gross oversimplification, but I hope it makes the basic point.
To deal briefly with the other affects of sanctions, which I think people generally understand well:
Firstly to show people just how strongly the world feels. Even if they choose to believe Kremlin propaganda, the government can't hide that. It drives this home. People in Nazi Germany shrugged their way through the Holocaust because it didn't affect them personally. People in Russia are not going to starve (unless by political choice) but they should visibly see comforts like fancy face creams or western clothing brands being removed. It drives home the point and it makes people less likely to support the war as they're fundamentally selfish. It means even if you are in denial, you will know that SOMETHING has changed. Let's call it the South Africa effect.
It also means people's patience runs thin with the government. The country becomes increasingly ungovernable, perhaps through strikes, riots, increased black market dealings (although Russia is already a rouge state), runs on the banks as people loose trust. This both (a) limits the Kremlin's options and (b) potentially threatens the future of the war.
Another point: a slightly different aspect of the sanctions is to explicitly stop Russia getting materials necessary to the war, e.g. computer chips. This is important, but with plenty of money sloshing around these items could typically be replaced from somewhere else, but usually with a lot of difficulty and expense. Now Russia won't have the option.