As the war in Ukraine continues, the economic impact of the conflict is becoming clearer. When Russia invaded Ukraine, no one knew how long the conflict would last or how much impact it would have on others around the world.
Following the coronavirus pandemic, this conflict is aggravating supply and demand tensions, damaging consumer sentiment, and endangering global economic growth.
Furthermore, it is not just causing rampant inflation and dampening economic growth, but social unrest is also one of the effects of the Russia-Ukraine war on the global political dynamics.
In recent months, many sectors in Russia faced suspension decisions, ranging from technology to automotive and energy. Apart from sanctions imposed by EU member states and the US, companies are also exercising measures to apply pressure on the Russian economy through their actions.
The technology industry especially has a lot of power due to its direct and indirect influence on the operations of all industries.
Global credit card leaders Visa and MasterCard along with the online payment platform PayPal suspended their services in Russia.
Dell and Apple have also halted their product services along with the top cloud infrastructure vendors such as AWS, Google, IBM, and Cloudflare. In one of their blog posts, AWS has clearly stated that they have “stopped allowing new sign-ups for AWS in Russia and Belarus.”
Likewise, Microsoft also suspended sales to Russia, saying, “We are announcing today that we will suspend all new sales of Microsoft products and services in Russia”. This presumably includes Azure infrastructure services as well.
Even though the services have been suspended in Russia only, the impacts have also been borne by affiliated businesses. Amsterdam Trade Bank, a lender who’s linked to Russia’s Alfa Group was one such example.
They were unable to access their emails because Microsoft had shut the services down. Along with emails, all kinds of documents, excel files, and internal committee reports were also stored in Microsoft’s environment and therefore inaccessible.
Other organizations and software providers such as SAP and Oracle have all taken steps to limit the availability of their products and services in the region. Oracle announced its stance through its tweet, which said that the company “has already suspended all operations in the Russian Federation”.
Likewise, SAP also uploaded a blog post announcing sanctions against Russia, concluding, “We are stopping business in Russia aligned with sanctions and, in addition, pausing all sales of SAP services and products in Russia.”
Even though the impact of these suspensions of services on the Russian government might be minimal, businesses are facing serious consequences due to inaccessibility of data along with disruption in operations.
Furthermore, due to pressure from investors and consumers, many western companies have revised their plans and decided to exit the country completely which is likely to cause long-term problems for businesses there.