this post was submitted on 07 Sep 2023
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[–] napoleonsdumbcousin@feddit.de 0 points 1 year ago* (last edited 1 year ago) (8 children)

I have a genuine question that maybe somebody with more economic knowledge can educate me in:

How is continuing the sale in Russia helping Russia? As I understand Russia is gaining money on the sales taxes, etc. but the rest of the earnings will go to the US parent company, which cannot be taxed directly by Russia. If Pepsi backs out, wouldn't operations just be replaced by a rebranded russian company, where all of the earnings would be under russian "sphere of influence"?

I genuinely do not understand why Pepsi backing out is considered bad for Russia. I thought countries generally prefer national companies over foreign ones.

[–] detalferous@lemm.ee 0 points 1 year ago (1 children)

Your question is basically "why are embargoes effective"

Collectively shunning an economy cripples it, and it's most effective when widely adopted.

Pepsi should be ashamed of their actions.

[–] napoleonsdumbcousin@feddit.de 0 points 1 year ago

My question was more specific than that. I absolutely understand why it is important to sanction high-tech products and stop Russia from exporting their goods.

But western companies selling non-critical goods inside Russia felt more like russian economic dependancy to western companies to me, which (for me as a layman when it comes to economy) seemed preferable to Russia having an independent economy. Thats where my question came from.

Now I realized that rather than "dependant economy" or "independant economy" the intended goal in this case is "no economy", although i am doubtful whether that will really work.

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