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Economy

Let's Not Be Naive: A French Take On War Profiteering

French firms TotalEnergies and Renault announced they were, over time, suspending their activities and halting production in Russia after being widely criticized for their inaction since the invasion of Ukraine. But leaving Russia doesn’t have the same cost or the same consequences for all companies. And we should calculate in who will profit later.

Photo of a shadowy silhouette outside  a ​currency exchange office in Moscow on March 2.

At a currency exchange office in Moscow on March 2.

David Barroux

-OpEd-

PARIS — Companies that decide to cut ties with Russia are not all in the same boat. Some like Apple — which can no longer deliver iPhones to the country isolated from the rest of the planet — only take minimal risks. They forego limited and temporary revenues, hoping that the day will come when the war stops and Russia finds some semblance of normalcy, and their business can resume.

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It is not so simple for several of the largest French companies, which were among the very first foreign investors in post-Soviet Russia and control numerous assets in the country. These multinationals that have invested billions (from retail group Auchan to energy giant TotalEnergies, automaker Renault and Société Générale bank) have much more to lose by breaking with Vladimir Putin.


In the short term, they deprive themselves of a profitable market, and of growth potential in the medium term. If Russia ends up regaining a positive reputation, those who have made the decision to leave will never be able to completely come back. Sanctions are not permanent. Departures are.

Photo of people walking by an Auchan supermarket in Moscow\u200b

An Auchan supermarket in Moscow

A. Savin

Short-term actions, long-term uncertainty

In the current context, these decisions, even if they may seem hasty to some, are understandable. Public opinion can be a bit too ready to call any company still active in Russia an immoral “war profiteer” when these companies sometimes play a crucial role for us (like TotalEnergies), for millions of Russian citizens (like Auchan or Danone) or for thousands of employees (like Renault). But beyond this backlash, staying active in a country that will be completely isolated is not easy.

Who will the benefits go to then?

Supply chains have been disrupted, local revenues are threatened and the Russian adventure could cause cash losses likely to weaken groups globally. When facing uncertainty, it may be appropriate to take drastic actions on the spot, especially since even in the event of peace, Russia has become such an unpredictable partner that it will be difficult to continue to invest there.

Still, let's not be naive. There’s no doubt that the assets that our companies are forced to give up or sell will be seized by the Russian state — or sold off to the oligarchs! And tomorrow, when time has allowed wounds to heal, will Europe continue to impose sanctions on Moscow or will it open its doors wide again to Russian products? If that happens, will the benefits go to those who developed them, or someone else? The real war profiteers may not be who we think they are.

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Society

Lusail Postcard: City Of The Future And Window Into Qatar's Ambitions

The Qatar World Cup has been making headlines for all the wrong reasons. However, the newly constructed city of Lusail in the country makes one thing clear: the West is not the target audience for this World Cup. Qatar has different, even bigger ambitions.

phot of a big oval and modern stadium

A general view of Lusail stadium, Qatar in April

© Marcio Machado / ZUMA Press Wire
Laura-Mai Gaveriaux

LUSAIL — In business class on Qatar Airways, the screens are showing a series of 3D images of a high-tech, utopian city. The focus is on environmental performance, luxury and sophistication. Shopping centers, high-rise apartment blocks and luscious green spaces reel past, 50 seconds of refinement and harmony accompanied by elevator music. In the final scene, a man wearing a white thobe and keffiyeh, the iconic traditional dress of the Gulf region, proclaims: “Lusail City, it’s my home.”

Some 25 kilometers (15.5 miles) from the center of Doha, the “city of the future” is still emerging from the ground. Only three of the planned districts are ready to move into, but according to Lusail Real Estate Development, 90% of the homes have already been sold. However, it is impossible to know exactly what state the construction site is in – the authorities have not responded to inquiries. Lusail is a symbol of the new era that Qatar ushered in in 2010 when its bid to host the 22nd Football World Cup was successful. The city is due to host the final match of the competition on Dec. 18.

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