Foreign campaign: Putin named the conditions for the return of Western brands to Russia

Large foreign companies have already appealed to the Russian authorities with a request to return to our market. The president stated this on May 13 at a meeting with members of Delovaya Rossiya. Moscow intends to evaluate many factors regarding their possible work in the Russian Federation, including the companies' policies at the time of departure. At the same time, it will not be enough for Western brands that have left the Russian market to simply apologize for their statements: the authorities will allow only those companies whose appearance is beneficial to the country. Russia intends to proceed from its national interests by supporting domestic business. What other issues are troubling entrepreneurs and what the Russian Federation thinks about possible sanctions against them — in the Izvestia article.

How does Russia feel about the threats of new EU sanctions

Vladimir Putin took part in the XX Congress of Business Russia on May 13: The structure brought together more than 10,000 businessmen, and their total annual revenue exceeds 10 trillion rubles. This year, the event was held in a hybrid format: the organization's leadership was in the Kremlin with Vladimir Putin, and the rest of the participants joined via videoconference. Heads of regions and heads of relevant territorial executive authorities were in touch with Moscow. There are more than 1 thousand participants in total.

The entrepreneurs communicated with government officials for almost three hours and managed to discuss many issues of concern to the industry. In general, the government and business unanimously stated that the Russian economy has demonstrated stability against the background of the departure of foreign companies in 2022.

— Despite all the difficulties, the so-called external pressure, nevertheless, the year before last we achieved significant growth — in general, significant growth for both our country and the global economy: 4.1% GDP growth the year before last, and 4.3% last year. At first, the government also calculated, looked— and thought 4.1 — no, but after additional calculation it turned out to be [4.3%]. These two tenths of a percent are also important," the head of state noted.

Such an adjustment to Russia's GDP for 2024, according to experts, demonstrated the coherence of the work of the Cabinet of Ministers and business against the background of sanctions, as well as a balanced approach to calculating economic growth, without the desire to show better results: this, in turn, allows us to correctly calculate the plan for the further development of a particular industry, explained economist Valery Korneev. At the same time, Russia, according to Alexey Repik, the head of Delovaya Rossiya, is ready to cope with the new sanctions that the West threatens to impose.

— Now I am confident that the economic security contour is reliably protected. Around the upcoming possible negotiations: well-known comrades will again plot their machinations, intimidate us with the introduction of one hundred and five hundredth packages of sanctions and scare us with apocalypses. It won't work here, you might say. We did it in 2022, and we can do it now," said Repik.

Russian brands appear by the hundreds and thousands, and the quality of products is often better, as it used to be difficult for domestic manufacturers to get "onto store shelves," the president recalled. He also noted the attractiveness of Donbass and Novorossiya for business, as they have fertile lands and favorable conditions for the development of tourism. Businesses "have something to invest in" in four regions, the head of Delovaya Rossiya reminded.

Apologies from Western companies for anti-Russian statements

The President said that representatives of large foreign businesses have already come to him with requests to return to the Russian market. Against this background, Vladimir Putin noted that not all foreign companies left voluntarily three years ago.

— There were companies that didn't want to, they left in tears, honestly, but with tears: "The pressure is such that they will destroy our business overseas, they will not allow us to make payments, and they will cause damage in Europe." We all know such people. I asked the government to keep this in mind," he said.

The Head of State presented some conditions for the return of foreign business: for example, the country will allow only those foreign brands whose appearance is beneficial to it to enter its market, and the road should be closed for the rest. Moreover, when assessing the prospects for their return, it is necessary to take into account even the behavior of foreign companies when leaving the Russian Federation. In any case, Russia will focus on its national objectives: "And if something needs to be taken into account from the point of view of the interests of our business, first of all, we will focus on your interests, on the interests of our business," Vladimir Putin promised.

The head of Delovaya Rossiya shared his vision of the situation: Alexey Repik urged not to "row everyone under one comb." Because there are those who continued to invest or left with respect for consumers, leaving their assets with the possibility of redemption by Russian partners. But those who have not fulfilled their warranty obligations must compensate the damage to consumers or the Russian budget upon return. Moreover, the head of the structure believes that companies that have allowed themselves to speak with pronounced anti-Russian rhetoric, including those that funded the Armed Forces of Ukraine, should first make a public apology. However, according to Vladimir Putin, this is not enough.

— If they need to return to our market, whatever, they will come and kiss you on the mouth. It's not enough. We definitely need to look at all these issues from a pragmatic point of view," he said.

Delovaya Rossiya proposes to develop a separate mechanism for the return of Western companies through the creation of joint ventures under the control of Russian partners.

— If our business has occupied this niche, invested, then, of course, we must give it (the business. — Ed.) a period for investments to pay off. Therefore, we will analyze the situation on a case—by-case basis, based on a balance of interests, so that people who believe in the prospects start investing in the domestic market and receive returns on domestic capital," said Maxim Reshetnikov, Minister of Economic Development, speaking at the meeting.

What does business think about the key interest rate in Russia

Business, judging by the discussion, is particularly concerned about the key rate. On April 25, the Board of Directors of the Bank of Russia decided to keep it at 21% per annum. The Head of State acknowledged that high inflation remains one of the key problems of today's Russian economy. And here, according to Putin, it is necessary to "pin it down" so as not to "freeze the economy itself."

"How do today's basic instruments work? <...> Loans are subsidized," the Russian leader said. — This means that the higher the rate and, consequently, the higher the rate not only for the key one, but also for credit institutions, the higher the budget costs for this subsidy. That's understandable. And then the question arises, where is this border and which loans should I subsidize?

In this case, the state should make a choice in favor of such projects, which are considered vital for the country and the economy. The other way is through grants or direct subsidies for the project, the president explained. "Not for these loans in general, but for the project. But in this case, the volume of these grants and loans will also be limited. It's an obvious thing. We talked about this adjustment," he concluded.

At the event, Alexey Kalinin, head of the Aquarius Group of companies, asked the president to instruct the Bank of Russia to consider various tools to stimulate professional investors in order to fill the high-tech market with their money. The Head of State also drew attention to the fact that Russia is actively working to attract investors' funds.

Mikhail Goncharov, the founder of the Teremok restaurant chain, raised the issue of changing the VAT rate for catering at 3-4%. Finance Minister Anton Siluanov responded to the initiative: he is ready to discuss this issue.

— Colleagues say: let's make a reduced VAT rate of 3% for catering so that there is no desire to split up. There are such facts, and we see that large networks are fragmenting. We are ready to consider the issue of 3% without deduction, maybe 3-4%, we need to make calculations more carefully. We are ready to work out such proposals with colleagues who work in catering," the minister said.

Currently, the VAT rate in Russia is 20%. Starting in 2022, cafes and restaurants with incomes below 2 billion rubles will not pay tax. The benefit was introduced as a measure to support the sector after the pandemic.

According to the president, the significant mission of Delovaya Rossiya is to identify barriers that hinder the dynamic growth of the domestic economy, and therefore the entire country in all areas of importance to the state. The business association was created to represent medium-sized business entrepreneurs, recalled political analyst Dmitry Yelovsky. At the same time, in his opinion, Delovaya Rossiya is expected to make systemic proposals, including on import substitution and solving other government tasks.