London
Cnn
–
A probationary melting in the cold American ice-Russian relations is paving the way for American companies to do what, until recently, seemed unthinkable-returning to the country three years after leaving the Droves.
Following the watershed with Russian officials last week, US Secretary of State Marco Rubio issued “extraordinary, economic and geopolitical opportunities so that the United States and Russia could capture after the war in Ukraine was over. And, on Monday, US President Donald Trump said he was “trying to make some economic development agreements” with Moscow.
But the corporate exodus rate from Russia after invading Ukraine in 2022 could make that project more difficult, with some US companies left in the country to hit any agreement. More than 1,000 global Companies have either volunteered or limited operations in Russia since then, according to a list compiled by the Yale Management School.
Kirill Dmitriev, head of the Russian direct investment fund, said he expects some US companies to return to the second quarter as soon as possible, according to comments cited by Russian media agency TASS last week.
However, analysts are suspicious by arguing that reward for reinvestment in Russia would be too small for companies to justify possible costs of doing so.
“I am skeptical that many companies would endanger their reputation and their risk of getting into this very unsafe and dangerous business environment for this relatively small market,” said Janis Kluge, a researcher at the German Institute for International and Security Affairs, or SWP.
“It is still very toxic for American businesses to make a lot of money there,” he told CNN.
Russia has long been a challenging place to do business.
“There were constant problems in terms of corruption, bureaucracy, red strip (and) dealing with the Kremlin,” said Timothy Ash, a Russian specialist in Chathham House, a London -based tank and a high strategist at RBC Bluebay Assset Management.
But since the occupation – and the battery of economic sanctions located from the West to Russia – the country has become an even more complicated place for companies. Perhaps the biggest risk that now faces foreign firms is the perspective of the Kremlin that captures their assets.
In 2023, Russian President Vladimir Putin signed a decree allowing the government to place foreign assets in the country under his interim control. Months later, the Kremlin nationalized the local assets of the French yogurt manufacturer and Danish creator Carlsberg.
Corruption has also exacerbated the already high levels. In 2021, the nonprofit organization international transparency placed Russia at 136th, linked to library, in the ranking of 180 countries and territories for their perceived levels of public sector corruption. By 2024, Russia had further slipped the perception index of corruption at 154, associated with Azerbaijan, Honduras and Lebanon.
Meanwhile, Russia’s economy has become less integrated with the rest of the world, Kluge told SWP, for the most part, for sanctions.
Particularly, shortly after the occupation, the United States, the EU, Britain and Canada together banned some Russian banks from the SWIFT-secured messaging service that connects thousands of financial institutions around the world. This has made it much harder for those banks to send and receive money from the outside.
The United States will not be able to re-advise banks banned on the network without EU cooperation because the Swift is located in Belgium, Kluge added.
Similarly, even if the United States removes its wide group of export controls and the freezing of riches imposed on Russia since February 2022, its main trading partners will not necessarily restore their measures against Moscow. On Monday, the European Union adopted its 16th group of sanctions against Russia.
“Has become very expensive and heavy to make a transaction in western coins from (inside) Russia,” Kluge said, mentioning that the sanctions “had done continuous business in Russia for many Western companies.”
Russia is no longer a “visible place to make money” for foreign companies, according to Elina Ribakova, elderly at the Peterson Institute for International Economics, based in Washington, DC. And it has not been so for about a decade, she told CNN.
The roof of the Russian economy – which Ribakova decides between the early 2000s and around 2014 – coincided with the flowering oil prices. Moscow benefited by exporting large quantities of oil and its natural gas to the rest of the world during that time, including the United States. A significant proportion of foreign companies created in Russia were energy producers, as well as retailers hoping to sell their goods in the country’s growing middle class, she said.
Now, “tables have been dramatically shifted” since America no longer needs Russia’s natural resources.
America now not only produces much more oil and natural gas than in previous decades, but it also exports fuels and thus directly competing with Russia in the global energy market.
For example, Europe has increased its imports of liquefied American natural gas-a cooled form of natural gas that can be transported to tanks that go to the ocean-to replace traditionally imported supplies from Russia.
The war has also reduced Russia’s middle class, Ribakova said. Many people are fighting or died in the battlefield in Ukraine, or left the country at the beginning of the occupation, although wages have increased due to the severe lack of work.
The whole economy is now run by the military-industrial complex, Ribakova said. And this is a sector where the United States and Russia are unlikely to find “natural cooperation”, she noted.
For foreign companies, boomeranging again in Russia, simply, would not be worth the hassle.
A major headache for return companies would be the possible fragility of any diplomatic decree between Moscow and Washington, analysts CNN said.
“Happy what happens if Russian attitude (towards the United States) changes?” Ribakova said. “Maybe they give (it) to the red carpet today. And what happens tomorrow? Highly very unpredictable.”
Uncertainty would work both ways, argued Michael Rochlitz, an associate professor in the economies of Russia, Eastern Europe and Eurasia at Oxford University.
“With the Trump administration, every day, every week, (it) changes a lot. So do you really want to make investments based on these disordered policies? “He said.” Happy what happens in four years if there is a democratic president? ”
Rochlitz summarizes the situation waiting for businesses returning to Russia with eagerness: “high risk, low -profit.”