Russia is going from bad to worse: its economy is in shambles and the drop in oil prices have resulted in a huge crisis, which spells bad news for Western export. Apple closed its Russian web shop, but Belgians feel te damage as well.
Apple halts Russian internet sales
The Russian currency has lost half of its value compared to the US dollar and euro this year alone, while inflation is through the roof and its stock exchanges falter. This all stems from a collapsed economy, Western embargoes and historically low oil prices. Especially the latter are proving to be calamitous as energy (oil and gas) makes up more than 70 % of Russia's export.
The entire situation is bad news for Russian president Vladimir Putin and the Russian people, but also for companies that export into Russia. Apple has decided to shut down its Russian online sales platform after it had already raised its prices 25 % over the past few months to counter the weaker ruble. The iPhone manufacturer has now decided to pull the plug on its Russian web shop entirely.
Belgian companies are also worried
The ruble crisis is not only an issue in Russia, but also abroad - particularly in Europe, which is Russia's largest trade partner. In 2012, its mutual trade was worth 267 billion euro.
Belgian companies export more than five billion euro in products to Russia on a yearly basis, but that has dropped 20 % in the first half of 2014 (according to AWEX research, the Walloon Agency for Foreign Trade). That drop was prior to the Western embargoes against Russia and Putin's counter-move, which mostly hit fruit farmers.
Flanders Investment & Trade, AWEX's Flemish counterpart, confirms the trend: "We have noticed a huge drop in trade to Russia, mainly of iron, vehicles and pharmaceuticals", spokesperson Tom Vermeulen told Belgian newspaper Het Nieuwsblad. The trend will probably gain even more traction as Putin and his followers are telling people to buy as many locally-produced products as possible.
Catastrophes may arise, as Mexx's bankruptcy has shown: according to business paper Trends, a Russian company defaulted on its payments and has pushed the Dutch chain into bankruptcy.