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Monday, September 26, 2022

Despite the continuing economic instability in Russia, McDonald’s has reopened its doors in Moscow

It is possible that the gambit will be successful, which would highlight the surprisingly resilient nature of the Russian economy in the face of one of the most intensive barrages of sanctions ever imposed by the West. After three and a half months of the war, it has become abundantly clear that the sanctions, along with the torrent of Western companies voluntarily leaving Russia, have failed to completely dismantle the economy or spark a popular backlash against Mr. Putin. This is the case despite the fact that there has been a torrent of Western companies voluntarily leaving Russia.

The integration of the Russian economy into the global market took up the majority of Mr. Putin’s 22 years in office. It turns out that unravelling business relationships that are so extensive and so intricately knit is not an easy task.

Sanctions will undoubtedly have a significant and far-reaching effect, the repercussions of which are only now starting to become apparent. According to economists and businesses, living standards in Russia are already on the decline, and the situation is certain to become worse as stockpiles of imports run short and more enterprises declare layoffs.

In addition, as a result of the Central Bank’s smart work, the financial markets were not thrown into a state of panic following the invasion, which assisted in the ruble’s recovery from its initial slump. The shelves of stores are, for the most part, still filled owing to the vast stockpiles that are kept on hand, the alternative import channels that have been developed via countries like Turkey and Kazakhstan, and the fact that Russian customers are purchasing less goods.

After the epidemic, there was an unanticipated increase in the demand for energy all over the world, which contributed to the strength of the ruble. According to the Finance Ministry’s announcement from last week, the Russian government anticipates a windfall of more than $6 billion for the month of June alone as a result of higher-than-expected prices for energy.

Officials in Russia have said that they are aware that the most challenging times for the economy may not yet have even arrived. It would be premature to say that the full effect of the sanctions has manifested itself, according to Elvira Nabiullina, the head of the central bank, who stated on Friday that although “the effect of sanctions has not been as acute as we feared at the beginning,” it is still too early to say that the full effect of the sanctions has been felt.

Aeroflot is now concentrating on local flights while striving to transition to Russian jets, which is a process that will take several years and has resulted in the airline being banned from utilising European airspace. Siemens, which in the 1850s helped usher in the industrial age in Russia by constructing telegraph lines throughout the nation and bringing the country into the modern era, made the decision last month to exit the Russian market.

But at least when it comes to food, Russia is better prepared than other countries. In 1990, when the first McDonald’s restaurant opened in the Soviet Union, all of the food and supplies had to be shipped in from the United States. The apples from the Soviet Union didn’t work out for the pie, so the firm had to import them from Bulgaria. The potatoes from the Soviet Union were too little to create fries, so they had to obtain their own russet potato seeds.

On Russia Day, which is celebrated on Sunday, he will reopen 15 locations, one of which is the old flagship McDonald’s on Moscow’s Pushkin Square. This is the location where, in 1990, hundreds of Soviets famously queued up for a taste of the West. The name of the new brand that the business will operate under has not yet been made public; however, the new logo for the company has been revealed, and it is claimed to feature a hamburger and French fries.

According to a menu that was shared with a Russian publication, the hash browns would be referred to by their Russian name. In addition, since the sauce is a trade secret, there will be no Big Mac available for purchase.

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