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Dan Liviu's avatar

An interesting Quora answer:

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Yaroslav Mar

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CEO & Founder at MicroFlag (2014–present)May 30

Is Russia benefiting from sanctions?

Here’s a real story; feel free to decide for yourself.

I used to have a small business in Russia that I operated remotely — ordering custom-made flags from a Russian supplier and exporting them abroad, primarily to the US and Western Europe. It was more of a side hustle, but it’s always nice to have several hundred extra bucks.

I give credit where it’s due: the quality of Russian flags was excellent, and the rates were much lower than what American or Western European flag manufacturers offer. There was just one tiny detail: the quality of Russian flags was excellent when those flags were actually produced. And getting them produced was no small feat.

First, I needed to convince the manager at the flag typography to pay attention to me. Despite being a frequent customer of 10+ years, I was still treated as if I were asking for a favor. He would reply and issue an invoice a week after I had placed an order by email, maybe. Calling them was useless, as was sending written complaints: they knew that being in a different country, there was only so far I could go with my complaints.

Then it would take another week or so to produce the flags. My delivery guy would go to the typography to pick them up for fulfillment, and more often than not, one of two things would happen:

He would end up waiting there for another hour because nobody bothered to print the flags until he showed up at the office;

He would pick up the flags without any waiting, only to realize that the order was incomplete or just plain wrong: for example, 5 flags instead of 6, or grommets instead of a shaft cover. If the mistake was easy to fix, he would wait at the office for a replacement flag (see the previous option); if not, then it would take another week or so.

Then the war with Ukraine began. Russia was cut off from PayPal, which is how I collect payments. It’s not that I couldn’t find a way to transfer money to Russia, but it was an extra step that I didn’t need to take. Logistics became a nightmare: some countries pretty much refuse mail from Russia, and shipping became more expensive and slower. So I said, “fuck it all,” and moved the business to China — and honestly, it was the best decision I ever made.

The quality of print is consistent with what the Russians offered. The manager is easily accessible via WeChat/WhatsApp, always promptly replies, and is always polite. Fulfillment now takes 3–4 days, down from 1–2 weeks when I worked with Russians. I no longer need to arrange shipping myself; the Chinese handle it all (I could have also outsourced shipment in Russia, but as explained above, the Russian supplier could not be trusted to get the orders right). And all for a fraction of what the Russians charged me.

I can guarantee you, most entrepreneurs who did business with Russia, whether big or small, will have similar stories to share. From Yandex to commercial aircraft, the Russian vicious cycle is always the same:

Russians develop an objectively decent product that could easily compete with Western ones, or even outcompete them;

Foreign money starts pouring in;

Commercial, economic, and political mismanagement makes Russian products unmarketable;

Foreign investors move their capital to countries that aren’t suffering from delusions of grandeur and are run by adults.

I’m a small fish, but I was doing the very kind of business that any normal country tries to cherish: exporting, and successfully so, domestic products. The Russia-made flags that I sold can be found on all continents including Antarctica.

A flag of Westarctica that I supplied — see the penguins in the background

My departure from the Russian market did not affect Russia in any meaningful way. But did Russia benefit from it? Certainly not.

Now imagine that it’s not just MicroFlag, but hundreds of large and mid-size corporations departing. Actually, you don’t need to imagine it, because that’s exactly what happened. And divestment is but one of the effects of sanctions.

I think you have your answer.

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Ostap Bender's avatar

Durov is one of “them”. Just for the record:Pavel Durov is linked to the World Economic Forum (WEF) as he was named one of the Young Global Leaders in 2017. This program recognizes individuals who have demonstrated leadership and impact in their respective fields. However, there is no indication that he has any formal or ongoing role within the WEF beyond this recognition.

Bastyon looks cool…we will see.

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