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Thanks for sanctions. Small and middle businesses in St. Petersburg take EU’s actions with optimism

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The “Pulse of the City” show’s observer Alexey Mikhalyov gathered opinions of Russian entrepreneurs on EU and US sanctions against Russia

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Yuriy Zinchuk, host, “Pulse of the city”: “Lets get back to acute problems of today. One of them is St. Petersburg life in the context of the geopolitical situation concerning Russia, sanctions and reciprocal measures, toughly demonstrated by our country.

Just when this happened, it was clear – we would be living in a different world. But its only now that we’ve started to understand what kind of world is that. Well, its all clear about Polish apples, Belgian mussels, Norwegian salmon and French cheese. And if we talk about larger scale things? What will change in this world apart from delicacies? How will those processes affect the small and medium-size businesses in St, Petersburg, its industrial sector and internet commerce? Our observer Alexey Mikhalyov went on tour around St. Petersburg’s enterprises to find answers”

Ivan Timofeevskiy is, commonly speaking, the man from the past. One of those, whose face was always posted on his factory’s “honorary employees” board. He knows through his own experience: war in any phase – cold or trade – is not a good thing. Talking about sanctions, Ivan Valentinovich could not hide his concerns.

Ivan Timofeevskiy, engineer: “Well, sanctions. Im watching TV and I think those are unjustified. Maybe it will affect us. Compared to 1998, now we have jobs and salaries. But it might get worse”

The Obukhovskiy factory where he works is one of the city’s oldest factories – last year it celebrated its 150th birthday. The country’s leaders often come here. Because “Almaz-Antey” is one of defense industry’s flagships: 60 factories across Russia, 5 of them in St. Petersburg. It had been preparing in advance for the sanctions directed at the military industry.

Mikhail Podvyaznikov, CEO “Almaz-Antey”: “I knew it would come to this. When Yushenko came to power, I said back then – ok, boys, lets wrap it up” 

Exact copy of bronze Lenin statue – the original stands by the Smolnyi Palace – like a symbol of two epochs. The factory hasn’t bid farewell to its past, having not stuck in it altogether and having adjusted to the new times. People here see positives in sanctions and a push for changes. Even nationwide ones.

Mikhail Podvyaznikov, CEO “Almaz-Antey”: “I think sanctions is always bad, because business connections are damaged. But – to some extent – its good, because we will relive ourselves of oil prices dependence and develop our industry”

Another military industry giant – “Baltiyskiy Zavod” – has been more cautious about sanctions. And there are reasons for it. First of all, there have been issues surrounding the joint “Mistral” project with France, the first line of which was fulfilled in St. Petersburg. Not so long ago, the factory was getting ready for a presentation in Paris. 

Alexey Kadilov, CEO “Baltiyskiy Zavod”: “As long as the EU has put sanctions on military cooperation, we are unlikely to be admitted to the exhibition. Although every year there is a big display of Rosoboronexport.

Secondly, contracts for ice-breakers. For the “Baltiyskiy Zavod” – which built the “Lenin” and the “Arktika” – atomic ship-building is still the priority.

Alexey Kadilov, CEO “Baltiyskiy Zavod”: “Those have around 120 imported items. Importers range from South Korea to Europe. We still don’t know how sanctions will affect serial ice-breakers production” 

From macroeconomics to household stuffs. St. Petersburg’s suburbs, a furniture factory. 6 months ago it was busy, trucks were lining up in front of it.

Some sanctions are like radiation. You cant see them, but their consequences are obvious. It only takes the EU to implement uneven rules for different players. One gets additional dues for furniture and clay, other gets those nullified. As a result, Ukrainian furniture gets cheaper, Russian grows 40% in price and is no longer bought. Here’s how businesses are murdered.

Igor Lysov, CEO of furniture factory: “Concealed sanctions. They did not hit us directly. We cant compete with exporters from Ukraine, which are shipping their produce to the same stores as we do. They have no dues for furniture parts. Those were nullified for them” 

Internet commerce. Its turnover is around 400 billion rubles today, growing by 30% every year. There is a total of 40 thousand e-shops in Russia, which use credit cards for payment. But our consumer is not scared.

Nikolay Volosyankov, creator of e-stores: “The system is invincible until post service works. If postal payments are forbidden, then there are pay terminals “Kiwi” and “Yandex”. There are many ways to pay in Russia” 

And even cautious mechanic Ivan Valentinovich – who observes the situation on TV, where scary stories are told ever day – expressed his disgust towards sanctions and made a stern reply to the US president

Ivan Timofeevskiy, engineer: “We have to work and earn our paycheck. We have no time for these sanctions”

And he clarified – he will continue taking bike tours to Sosnovka park. And will not abandon beloved fishing. So to speak, the true freedom is within oneself, and no sanctions can harm it.

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