Russian Backlash Due to the War

By: Zak Rahim

After the beginning of the war between Russia and Ukraine, many countries and organizations have tried to fight against Russia to show support. Although they haven't fought physically, there are many other ways that countries have tried to attack. Because of the war, Russia has faced ruthless backlash in many different ways. Countries around the world have tried to harm Russia financially and through private organizations.

To help Ukraine fight, countries have tried to attack Russia through the stock market. Russian stocks and the value of the Russian currency, the ruble, have plummeted from 81 rubles per dollar to 111 rubles per dollar. Because of sanctions, the Russian ruble is now worth less than a cent. Many giant Russian corporations have faced troubles with sanctions targeting Russian elites. Within a week of announcing its attack on Ukraine, the Russian main index lost over a third of its value. The Russian stock market had been completely shut down for a month in order to stop people from selling. All assets invested in the market were suspended and frozen. Now that it has recently reopened, big losses can be expected. People are now only allowed to trade through 33 stocks instead of the previous few hundred and aren’t allowed to buy and sell short, which makes it much harder to bet against Russian indexes. To help the stock market recover, the Russian government has spent over 10 billion dollars buying stocks so that they rise again. The buying and selling of stocks are now open for only 4 hours each day. Because of all these restrictions, Russia’s main stocks haven’t dropped nearly as much as they were expected to. In fact, the Russian index has risen about 1% so far. But in total this year, it has dropped nearly 30%.

Another way that Russia has been harmed by sanctions is through Russian banks. According to the official website of the U.S. Treasury, the treasury has fought hard to harm Russia. “(the) treasury is taking unprecedented action against Russia’s two largest financial institutions, the Public Joint Stock Company Sberbank of Russia (Sberbank) and VTB Bank Public Joint Stock Company (VTB Bank), drastically altering their fundamental ability to operate. On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars. The vast majority of those transactions will now be disrupted. By cutting off Russia’s two largest banks — which combined make up more than half of the total banking system in Russia by asset value — from processing payments through the U.S. financial system. The Russian financial institutions subject to today’s action can no longer benefit from the remarkable reach, efficiency, and security of the U.S. financial system.” With the value of the ruble descending constantly, Russia has tried to do as much as possible to keep people’s money in banks. But instead of repeating their move of freezing assets like they did in the stock market, they have raised interest rates from 9% to 20%, meaning that the people will be getting much more interest if they keep their money in banks. Doing things like this will cost Russia a lot, though. The Russian governments lose more and more money every day from the sanctions, which is exactly what the 30 countries that currently hold sanctions against Russia want.

Another way that Russia is facing backlash from the war is through private organizations refusing to associate with them. Many corporations like Disney, Sony, the Cannes Film Festival, etc. have made an effort to stop associating with Russia after the Ukrainian Film Company encouraged the world of film to boycott by not letting their movies be shown in Russia. Film companies in Europe like the Cannes Film Festival, a world-renowned festival for the greatest films worldwide, have cut ties with Russian productions. Many famous U.S. Film companies have refused to let their films be shown in Russia. Sony, Disney, Warner Brothers, Paramount Pictures, and many other Hollywood productions are examples of this. About 70% of films shown in Russia were from these companies, so Russia has been hit hard. Many music organizations have also made an effort to cut ties with Russia. New York’s famed Metropolitan Opera is an example of this. The Opera’s general manager, Peter Gelb, made their choice crystal clear: “We can no longer engage with artists or institutions that support Putin or are supported by him — not until the invasion and killing have been stopped, the order has been restored, and restitution has been made,” he said. On the other hand, the Cliburn Competition, a popular philharmonic competition, has different views. “The invasion of Ukraine by Russia is reprehensible and heartbreaking. The Cliburn stands firmly against and condemns this tyranny… The Russian-born pianists who have applied for the Sixteenth Van Cliburn International Piano Competition are not officials of their government, nor is their participation in the Cliburn state-sponsored. Therefore… the Russian-born pianists will be allowed to audition for the Cliburn Competition.” Sports Organizations have also shown support for Ukraine during the war. The NHL, IIHF, FIFA, and UEFA have all made statements showing support for Ukraine, and all but the NHL have banned Russian teams from competing in their leagues. Two major soccer teams, Schalke 04 and Manchester United have cut ties with Russian sponsors, which may cost them millions. Additionally, Adidas, Apple, Fine Wine & Good Spirits, IKEA, and Exxon have all made statements denouncing Russia’s actions. Adidas has stopped its partnership with the Russian Football Union, Apple has stopped selling its devices in the Apple Stores in Russia, and many other companies have stopped selling products in Russia.

In conclusion, Russia has faced sharp and swift backlash due to its attack on Ukraine. Many private corporations have shown support for Ukraine during the war. The sanctions against Russia have been critical to their stock market. The banks in Russia have faced lots of backlash and the country of Russia as well as its people have been harmed significantly by all of the sanctions. The question now is, should the sanctions against Russia continue, despite the major negative effects it has on the Russian people?