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76 Opinion
bne June 2022
Unlike the oligarchs, who have plundered the Russian economy for decades, Konov is part of a class of executive innovators who, alongside their teams, reformed outdated post-Soviet private companies into high-performing players.
He joined SIBUR in 2004, with the company on the verge of bankruptcy. By 2021, it was one of the world’s biggest petrochemicals manufacturers. Since then, the company’s turnover increased from $3bn to $16bn.
Konov, as part of SIBUR’s high-skilled management team, also transformed the company into an environmental leader in a country and an industry where ESG concerns are normally bottom of the list of priorities. It has focused on increasing the use of recycled materials in its production, reducing waste and launching environmental initiatives in the communities where it operates. It won acclaim in 2019 for becoming one of the first Russian companies to adopt a sustainable development strategy, and Forbes consequently listed it as one of Russia’s 30 most eco-friendly companies in 2021.
Konov has since stepped down as the chairman of the management board of SIBUR, and disputes the basis of the sanctions.
Alexander Shulgin, former CEO of Russian e-commerce major Ozon, is another example. After rising to the top of the company in 2017, he took Ozon to IPO on the Nasdaq exchange, where it raised a cool $1.2bn. It has now grown into a hugely successful company, often described as Russia’s answer to Amazon.
Shulgin was forced to step down as CEO of Ozon in April after the EU and Australia announced sanctions on him. The EU cites as justification for the sanctions Shulgin's attendance
at a meeting in the Kremlin on the day that Russia invaded
COMMENT
Constanta concerns
Jeff Lightfoot in Constanta
Romania is a frontline state in the increasingly bloody conflict between Russia and Ukraine. For years before Russia’s latest invasion of Ukraine, Romanians had told any American visiting the region that it was the Black Sea – more than the Baltic region – that had suffered most from Russian aggression since the end of the Cold War. Last week
I had a chance to visit the port city of Constanta on the Black
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Ukraine. But the meeting was scheduled well before the outbreak of war, and the guests – Russia’s biggest employers – say that attendance was not optional.
Oversalting the borscht
The efficacy of the sanctions regime to date is largely down to how carefully targets have been selected. The plummet of the ruble after Russian foreign currency reserves were frozen is one example. The decision to tell Russians to stop travelling to Britain, apparently in response to sanctions on Putin’s inner circle, is another.
The risk is that western governments will discriminate less and less as they feel the need to keep up with the impressive pace they have set for their sanctions regime. With fewer oligarchs and high-profile targets left who actively support the regime, they are resorting to self-made businessmen and Russia’s managerial class.
This is an understandable logical extension of the sanctions designed to “hobble Russia’s economy”, but it risks looking indiscriminate and ill-considered. It could also have the unintended effect of undermining the moral basis of
the sanctions programme, making Russia’s most liberal businessmen – and not its corrupt and exploitative ones – answerable for the government’s sins. Have we considered all the implications of cutting off economic ties with those who have brought the world of Russian business closer to the West?
If it maintains its current course, the sanctions regime risks doing the opposite of what it sets out to achieve: supporting the refrains of Russian propaganda and effectively pushing away the Russians who don’t support the war. One quarter of Russians are already feeling the effect of sanctions. As the war rages on, the West will need to consider how it increases that proportion without engendering resentment and isolation.
Constanta is home to the largest port on the Black Sea and is an increasingly important gateway of food, material, humanitarian relief, as well as US and allied military personnel. / romaniatourism.com
Sea to see how Russia’s latest war on a sovereign Black Sea neighbour has impacted the private sector and wider business environment in the region.
Constanta is home to the largest port on the Black Sea and is an increasingly important gateway of food, material, humanitarian relief, as well as US and allied military