ukraine-russia crisis (2)
TRANSCRIPT
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BUSI 3704 A : THE ENVIRONMENT OFINTERNATIONAL BUSINESS
TOPIC REVIEW
What are the Internatina! B"#ine##I$%!i&atin# ' the U(raine)R"##ia
Cri#i#
*r+ A,-"!.han/ Mha$e-
*e&e$,er 014
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What are the internatina! ,"#ine## i$%!i&atin# ' the
U(raine)R"##ia Cri#i#2
1Mani'e#tatin# ' the U(raine)R"##ia Cri#i#(a) What is the Ukraine-Russia Crisis?(b) What is the nature of the crisis?(c) What areas/countries are encompassed in the Ukraine-Russia crisis?(d) Where and when did the Ukraine-Russia Crisis begin/start?(e) What are the issues and demands of the Ukraine-Russia Crisis?(f) How has the Ukraine-Russia Crisis echoed in other countries around the
world?
*/na$i ' the U(raine)R"##ia Cri#i#(a) How has the Ukraine-Russia Crisis eoled since it began?(b) What sparked the Ukraine-Russia Crisis?(c) Who are the ke! actors of the Ukraine-Russia Crisis?(d) What is the pro"le of the Ukraine-Russia Crisis actors?(e) What actiities hae been undertaken b! the protagonists of Ukraine-Russia
Crisis?(f) What hae been the responses of protagonists?
(g) What are the ob#ecties/goals of the ke! actors in the Ukraine-Russia Crisis?(h) What hae been the roles of foreign goernments$ regional organi%ations
and the United &ations?(i) What are the ke! factors that hae gien rise to the Ukraine-Russia Crisis?(#) What is the role of technolog! in the Ukraine-Russia crisis?(k) What is or has been the role of the mass media in the Ukraine-Russia crisis?(l) How do !ou foresee the Ukraine-Russia Crisis unfold from now onwards?(m) Wh! has the Ukraine-Russia Crisis not spread to other countries in the
region?
3I$%a&t# ' the U(raine)R"##ia Cri#i#(a) What are the short-term impacts/outcomes of the Ukraine-Russia Crisis?
(b) What are the medium-term impacts/outcomes of the Ukraine-Russia Crisis?(c) What are the long-term impacts/outcomes of the Ukraine-Russia Crisis?
4I$%!i&atin# ' the U(raine)R"##ia Cri#i# 'r Internatina! ,"#ine##a' What are implications of the Ukraine-Russia Crisis for the macro-
enironment(s) of nternational usiness?b' What are implications of the Ukraine-Russia Crisis for the industr!
enironment(s) of nternational usiness?c' What are implications of the Ukraine-Russia Crisis for the organi%ational
enironment(s) of nternational usiness?
5Cn&!"#in# 6 Re&$$en-atin#
The "e#tin# a,8e are re%r-"&e- an- re#%n-e- t in %int 'r$ in the
ta,!e# ,e!9+ The re#%n#e# are nt eha"#ti8e+ The/ are ;ere- t
a##i#t
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Ta,!e 1: Mani'e#tatin# ' the U(raine)R"##ia Cri#i#
>"e#tin An#9erWhat i# the U(raine)
R"##ia Cri#i#2
What i# the nat"re '
the &ri#i#2
+eopolitical crisis , armed conict (ciil war)
What area#
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Ta,!e : */na$i ' the U?RAINE)RUSSIA CRISIS
>"e#tin An#9er
H9 ha# the
U(raine)R"##ia
Cri#i#
"n'!-e-
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67*F b! Russia$ Ukraine and rebels from the
Ukrainian separatist regions of 2onetsk and
3uhansk'
9he peace deal has been breached seeral timesG in
fact it is reported that *777 people hae alread!
been killed since the @insk 0ccord was signed'
What #%ar(e- the
U(raine)R"##ia
Cri#i#2
Biktor anuko!chDs reersal on a pro-.U trade deal in
faour of strengthening ties/relations with Russia'
Wh are the (e/
a&tr# ' the
U(raine)R"##ia
Cri#i#2
What i# the %r@!e' the U(raine)
R"##ia Cri#i# a&tr#2
>rdinar! citi%ensN !oung$ old$ men and women
tates/goernmentsN Ukrainian$ Russian , Western$
etc' +lobal$ Regional , @ultilateral organi%ationsN U&$
.U$ >C.
What a&ti8itie# ha8e
,een "n-erta(en ,/
the %rta.ni#t# '
U(raine)R"##ia
Cri#i#2
What ha8e ,een the
re#%n#e# '
%rta.ni#t#2
U(rainian 8ern$ent
earching for alternatie energ! suppliers (to
Russia) end in the arm! to "ght the separatists in
.astern Ukraine
EU 6 We#tern 8ern$ent#:
mposed seeral rounds of sanctions against
Russian indiiduals$ companies and banks b! the
West and its allies.U signed a comprehensie economic deal with
Ukraine Eoreign aid to Ukraine ("nancial$ e;perts$ etc')
&on-lethal militar! support
R"##ian .8ern$ent:
0nne;ation of Crimea
Humanitarian aid (food , necessities$ etc')
cono!s to .astern Ukraine Russian counter-sanctions against countries that
hae imposed sanctions against it (0ustralia$
Canada$ .U$ &orwa!$ U0)' 0ssistance to Crimean bank depositors
F
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Internatina! r.aniatin#:
>rgani%ation for ecurit! and Cooperation in
.urope (>C.) United &ations
&09>
What are the,e&ti8e#
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What i# r ha# ,een
the r!e ' the $a##
$e-iain the
U(raine)R"##ia
&ri#i#2
@ainstream media reported about public protests$
oerthrow of the Ukrainian regime$ anne;ation of
Crimea$ moement Russian humanitarian aid
cono!s$ downing of the @ala!sian airliner$ armed
conict in .astern Ukraine'
@ass media in the West and in Russia has
endeaoured to shape the discourse about the crisis
and in the process reealed/unmasked its ownbiases'
@assie propaganda campaignsG e'g'$ 5remlin-
funded broadcaster R9 -- formerl! known as
Russia 9oda! -- launched a +erman language
station in &oember 67*F to put across
@oscowPs iew of the crisis' @oreoer$ +erman media hae been
complaining for months about their news sites
being bombarded with pro-Russian comments'
H9 - /" 're#ee
the U(raine)R"##ia
Cri#i# "n'!- 'r$
n9 n9ar-#2
+erman Chancellor 0ngela @erkel beliees that the
showdown between Russia and the West seems to be
eoling from a fast-moing tit-for-tat aQair into a
longer game in which the West slowl! sAuee%es
RussiaPs struggling econom! in the hope that 4utin
eentuall! blinks'
4utin asserts that the West (and the U in particular)
can/will neer subdue Russia'Wi!! the U(raine)
R"##ia Cri#i# #%rea-
t ther &"ntrie# in
the re.in2
Ta,!e 3: I$%a&t#
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E&n$i& I$%a&t#:
I$%a&t# n U(raine:
9 sector in Ukraine (worth J billion in 67*8) is in
#eopard!' nternational clients hae hitherto tapped into
Ukrainian technical e;pertise and low labor costs'
>utsourcing in Ukraine brought in about 6 billion inreenue$ with more than J7$777 people working in
the "eld' High tech companies hae moed out of rebel-held
areas to aoid armed conict (brain drain)
I$%a&t# n R"##ia:
Russia econom! is under seere strain due to
sanctionsG could go into recession Rising ination
Russia is diersif!ing its sources to
replace/substitute imports from the West , allies(e'g'$ 0rgentina$ ra%il$ .cuador$ ran and @e;ico
hae e;pressed their willingness to boost food
e;ports to Russia) ra%il meat e;ports hae increased : Russia now
bu!s 8L'S of ra%ilian meat e;ports and
increase from 8J'MS oer the past few months ndonesia to e;port to Russia fresh and
presered fruit$ "sh and seafood products ran interested in suppl!ing Russia with dair!
and meat products
Russia proiding incenties for domestic/localproduction (import substitution) especiall! in
munitions and militar! eAuipment 0didas would remain in Russia (not aQected b! the
sanctions) Erance will delier to Russia 6 @istral-class
helicopter carriers (Bladiostok , eastopol)
alued at *'J billion'
I$%a&t# n We#tern C"ntrie#
3ost markets in Russia &umerous .uropean countries hae alread! argued
that the Western countriesP sanctions and the food
import ban imposed b! Russia on 0ugust I are
damaging the econom!' talian agricultural producers estimate that the! will
6J8 million in one !ear periodG talian goods e;ports
hae fallen too e'g'$ automobiles (fell b! J7S)$
I
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pharmac! products (fell b! 86S)$ te;tile (fell about
6JS)' 3atia lost 7'6JS of +24 (J' million) due to food
embargo imposed b! Russia : dair! industr!$ dair!
farmers$ pig industr! and haulage "rms were the
most aQected' 4rice of pigs in 3atia has dropped b!
*IS' .uro-%one recoer! at risk
I$%a&t# n Thir- Partie# ther &"ntrie# 6 .!,a!
e&n$/ &ew e;port market to Russia replacing western
e;porters Could impair global economic recoer!
Finan&ia! I$%a&t#:
9en months after Russia inaded Crimea the "nancial
fallout is still being felt' 9housands of ordinar! citi%ens
hae little or no access to their funds' 3osses for
Ukrainian banks continue to mount as billions of dollars
worth of loans the! issued in Crimea go unpaid' 3aw!ers
for the banks are preparing legal actions against Russia$
which con"scated man! of the banksP buildings$
eAuipment and cash' 9o help Crimeans$ Russia has been compensating
depositors with accounts at Ukrainian banks through afund that insures Russian bank deposits' 0ccording to
the Eund for the 4rotection of 2epositors in Crimea$
which is part of RussiaPs 2eposit nsurance 0genc!$ as of
&o' it had paid out more than J77 million to *L$F77
depositors' Capital ight from Russia
Te&hn!.i&a! I$%a&t
Crimea has been thrust into a kind of technological time
warpN @ost 09@s no longer accept non-Russian bank
cardsG foreign credit cards canPt be used to bu! things'
@ost non-local mobile phones canPt receie a signal' 0nd
een if the! could$ calling other Crimeans is
complicatedN @ost of the peninsulaPs residents recentl!
had to get new mobile phone numbers because
Ukrainian serices were cut oQ'
P!iti&a! I$%a&t#:
M
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4olitical changes in Ukraine : new pro-West
goernment is currentl! in power Ukraine lost Crimea to Russia
9ense political relations between the West and Russia
Re."!atr/ I$%a&t#:
llegal ows of goods into Russia (e'g'$ 77 tons of illegal
meat and lard (disguised as marmalade) produced in
+erman!$ the ðerlands$ elgium and 4oland were
intercepted at the Russia-.stonia border in >ctober
67*F)
C"!t"ra! I$%a&t#:
En8irn$enta! i$%a&t#:
What are the
$e-i"$)ter$
i$%a&t#
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Ta,!e 4: I$%!i&atin# ' the U?RAINE)RUSSIA CRISIS 'r Internatina!B"#ine##
>"e#tin An#9er
I$%!i&atin
# 'r the
$a&r)
en8irn$e
nt#
4olitical hort term political uncertaint! due to domestic
conict as well as due to geopolitical strain between
the West and Russia is alread! haing signi"cant
repercussions for international business'
.conomic &ew measures will hae to be taken toresuscitate/restructure the Ukrainian econom!
(including those of the .astern regions of Ukraine)
that will hae been stalled or destro!ed during the
crisis'
Companies in the West and well as those in Russia
will hae to ad#ust their strategies in light of the
Western sanctions on Russia and Russian counter-
sanctions'
U oil compan! .;;on@obil has suspended its
operations with RussiaDs state-owned oil giantRosneft on nine out of *7 #oint entures following a
new round of Western sanctions imposed on
@oscow'
9his deelopment will negatiel! aQect both
companiesN
Rosneft will now hae to "nance the initial
stages of e;ploration in the 5ara and lack eas$
+rigori! irg$ gas and oil anal!st at nestcafe$
Russia$ pointed out in an interiew with Radio
BR' .;;on@obil was going to proide funding
estimated to be worth 8'6 billion for the pro#ect
before the U 9reasur! imposed the sanctions$
according to an agreement concluded in 67**' 9he 0merican compan! is heail! inoled in oil
and gas pro#ects in Russia and Tis clearl!
interested in growing its resource base and
production in the future' Russian pro#ects were
ke! to these long-term goals$= irg maintains' Howeer$
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3egal 3aws and regulations ma! change (some ma! foster
a conducie business climate while others ma!
institute new constraints)Russia has threatened to take .U countries to the
W9>ocial ocietal cleaages will become more pronounced in
the short term but in the long-term there is
potential that chasms in societ! ma! be mended
(and/or accentuated)
Cultural Balue changes?&ew reolutionar! songs , art?
9echnological .;pose the limits of technolog! in the conte;t of
digital diide within and across nations
.cological &ew wa!s of protecting/presering the enironment
ma! be introduced?
I$%!i&atin
# 'r the
In-"#tr/
en8irn$e
nt#
u!ersD bargaining
power
4rotesters$ rebels and ciilians are part of the
consumersG the! ma! remember who supported
them during the protests/rebellionsuppliersD
bargaining 4ower
4rotesters$ rebels and ciilians form part of the
labour suppliers
9hreat ofubstitutes
Ukraine-Russia Crisis ma! bring closer societiesacross the planet and ma! reeal substitutes that
ma! hae been ignored
4otential .ntrants &ew entrants that were blocked b! former/replaced
rulers ma! be gien a chance to enter
ndustr!
Competitors
Competition ma! increase graduall! as new
entrants oercome their hesitation to (re)enter the
region'I$%!i&atin
# 'r the
r.aniati
na!en8irn$e
nt#
>rgani%ational
tructure
>rgani%ationtrateg!
>rgani%ational
4ractices
>rgani%ational
Reputation
>rgani%ational
4erformance
**
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Ta,!e 5: Cn&!"#in# an- Re&$$en-atin#
>"e#tin An#9er
What %re!i$inar/ &n&!"#in# &an
,e -ra9n 'r$ the U?RAINE)
RUSSIA CRISIS2
Within a short period the protesters/rebels hae
been successful in (a) giing oice to a number of
societal issuesG (b) bringing down some regimesG (c)
emergence of new political parties/forces'
Corrupt leadership eentuall! leads to regimechange and social turmoil
ociet!Ds alues are under scrutin! as ruthless ,
corrupt dictators are brought down or cut to si%e'
What
re&$$en-at
in# &an ,e
$a-e 'r:
Prte#ter#