In late 1990, a former British cabinet minister reflecting on the end of the Cold War picked an image of consumer goods companies’ inroads into the former Soviet Union to illustrate the transformations seen in what he called the “annus mirabilis”.
There had been longer queues outside the new McDonald’s in Moscow’s Pushkin Square than at Lenin’s tomb, Denis Healey marvelled in the Financial Times.
Russians’ embrace of western fast food, soft drinks and jeans brands soon came to symbolise the triumph of “capitalistic diplomacy”, Yale School of Management professor Jeffrey Sonnenfeld observed this week, noting that the US Department of State had encouraged American companies to open in Moscow.
“Political scientists used to argue that no two countries with a McDonald’s would fight each other,” he recalled. Even after Yugoslavia’s bloody break-up contradicted that theory and tensions built between the west and Vladimir Putin’s regime, brands such as McDonald’s, Pepsi and Levi Strauss remained committed to Russia.
Putin’s invasion of Ukraine has changed that, prompting an exodus of western companies from Russia that is as sudden as their entry more than three decades ago.
ExxonMobil, BP and Shell are hurrying to offload Russian investments; Apple, Google and Facebook have curtailed their services in the country; Walt Disney and Live Nation have scrapped film launches and rock tours; and clothing brands such as H&M and Nike have followed carmakers including Volkswagen, Toyota and Mercedes-Benz in suspending deliveries or operations.
End of an era
For Vladislav Zubok, a professor of Russian history at the London School of Economics, the corporate retreat marks the end of the era whose beginnings he witnessed while passing Moscow’s first McDonald’s on his way to work each day.
“It was a new smell, a new sensation – fast service, everything was clean. Moscow was incredibly colourless [under the Soviet system] and you suddenly had a small island of light, colour and efficiency in the midst of the collapsing Soviet economy,” he recalled.