Russia Reform Monitor No. 2516

Related Categories: Economic Sanctions; Human Rights and Humanitarian Issues; Intelligence and Counterintelligence; International Economics and Trade; Science and Technology; Warfare; China; Russia; Ukraine
The opening of the iconic McDonald's in Moscow's Pushkin Square thirty years ago symbolized the growing contacts between Soviet Russia and the West - and a thaw in East-West tensions. That trend, however, has been reversed as a result of Russia's new war in Ukraine. In response to the Russian military aggression, the fast food giant has announced that it is closing its 847 locations in Russia, at least temporarily. The closures will leave thousands of workers unemployed, compounding what experts believe will become Russia's worst economic crisis since the collapse of the USSR.

McDonald's exit is part of a larger trend, as the economic ripples of Vladimir Putin's war against Ukraine continue to reverberate. On March 11th, Germany's financial giant, Deutsche Bank, also announced that it was closing down business in Russia in response to investor pressure. "Like some international peers and in line with our legal and regulatory obligations, we are in the process of winding down our remaining business in Russia while we help our non-Russian multinational clients in reducing their operations," the bank announced in an official statement. "There won't be any new business in Russia." (The Moscow Times, March 10, 2022; Reuters, March 11, 2022)

On the technological front, meanwhile, Russia is now facing a "loss of digital sovereignty" as a result of its foreign adventurism. The new sanctions levied against the Kremlin by the West, notes journalist Andrei Soldatov, "will hit Russian industry hard" - particularly in the tech sector. That's because they will effectively sever Russia's connections to foreign conglomerates like the Taiwan Semiconductor Manufacturing Company (TSMC), which Russia has come to rely upon heavily for computer chips for its domestically-produced desktop PCs.

"There are two ways out of this tough situation," according to Soldatov. "The first is to bring back the time-honored Soviet tradition of stealing Western technology," he writes. "The second way to make up for shortages in tech is, obviously, to turn to China" - something that Russia's intelligence services have been loath to do up to now for fear of Chinese espionage. Now, however, "Russia is simply not in position to choose – and the Chinese will exploit it to the full." (The Moscow Times, March 1, 2022)

If the tactics Russia is using in its military offensive against Ukraine look familiar, it's because they are - having already been battle tested in a different theater in the Middle East. The Russian government is "using its Syrian playbook for a brutal war in Ukraine," notes defense analyst Seth Frantzman in the Jerusalem Post. "Russia's systematic targeting of cities, such as Kharkiv and now Mariupol, is part of the game plan that Russia developed in Syria."

The strategy, Frantzman notes, is effective precisely because it "harasses civilians into fleeing, and then does short term 'ceasefires' to channel the civilians into 'corridors.' The idea is to squeeze cities and give the aggressor a chance to target civilians." Moreover, he points out, "[t]he attack on hospitals is part of this Syria method. Russia honed these kinds of attacks when backing the Assad regime. Because Moscow had impunity to bomb and attack in Syria, it believes no one will stop it in Ukraine." (Jerusalem Post, March 12, 2022)

The similarities between the Ukrainian and Syrian conflicts don't end there. Syria has also emerged as a notable source of volunteers for Putin's new war - even as other countries, like Kazakhstan, have turned down the Kremlin's requests for troop reinforcements. London's Guardian newspaper reports that a vanguard of 150 Syrian troops have now arrived in Russia. The soldiers are part of a larger contingent of Syrian personnel that have signed up to fight on Moscow's behalf in the current conflict. According to the Syrian Observatory for Human Rights, a Syrian NGO, some 40,000 Syrians have signed up to take part in the war on Russia's side to date - representing a significant portion of the Assad regime's military might, and a reflection of the depth of the Syrian government's debt to Russia for its military assistance throughout more than a decade of civil war. (Guardian, March 18, 2022)