Ukraine steps back on black list

Ukraine under international pressure, especially from European Union (EU) member countries, has removed the names of companies which kept their business links in Russia ever since the war broke out two years ago. EU, the United States and the United Kingdom had imposed sanctions of various degrees, financial sanctions, cutting of gas and oil supplies from Russia, sanctioning persons of military, commercial and political importance in Russia. But Russia has survived the impact of the sanctions, and according to experts Russian economy is doing reasonably well. The West’s expectation was that the sanctions regime would cripple the Russian economy. It did not. There were many reasons for this. Large Asian economies like China and India had continued to buy Russian supply of gas and oil, and also other imports. Ukraine was quite frustrated with this, and it was out of sheer desperation that it wanted to create the ‘name and shame’ list. But it was told that this would only result in a backlash from the donor countries to which the companies belonged. There were 50 big companies on the list. It was clear that the presence of these companies in Russia and their business dealings there were indeed helping Kremlin pursuing the war in Ukraine. The issue was whether Ukraine could afford to antagonise these companies and their countries because the companies wielded influence with the governments in their countries. Ukraine needs international goodwill as much as arms and funds.

The international civil society groups in Europe are quite convinced that the black list was essential, and companies continuing to do business in Russia need to be called out. They see Russian President Vladimir Putin as an evil force and no civilised society — EU member countries — should not be dealing with Putin’s Russian government in any way. Karin Doppenbauer, Austrian lawmaker and member of the liberal Neos party is quite clear in her mind about Russia. She says, “The government has to understand that any cosy relationship with Putin is over.” Some of the companies put on the blacklist did try to alter their business dealings in Russia. But a majority of them became annoyed and used political pressure to get their names off the list.

There were 14 Chinese companies on the list. China, though a declared ally of Russia in general, had not supported Russia against Ukraine. Many countries like China and India are keen that the war should end and the disputes between Russia and Ukraine should be resolved through dialogue. China is also buying grains from Ukraine. It was difficult for Ukraine to fend off Chinese pressure. Similarly, France’s companies were on the black list as well, retailer Auchan and Leroy Merlin, and the French government had pressured Ukraine to remove them from the list. And so did Austria and Hungary. There were also companies from the United States and Germany. Ukraine seemed to have felt that it is convenient to scrap the list as a whole instead of negotiating with each country.

So, the strategy of EU, US and UK to isolate Russia through economic sanctions for its invasion of Ukraine having failed, the West is left with little option but to negotiate with Russia, and pressure Ukraine to negotiate with Russia. This would only strengthen President Putin’s hand. But the western European countries have now come to the conclusion that Russia is an ideological enemy, and there cannot be much interaction with Moscow. This opens up the old divide, which dates back to the Napoleonic wars at the beginning of the 19th century. Russia then wanted to be part of the Austria-Prussia alliance, which was then known as Holy Alliance, to defeat Napoleon. Similarly, 1941, Stalin’s Russia was an ally of United Kingdom and the United States to defeat Hitler. But these moments of bonhomie did not last long.