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End of an era in Russia as sanctions bite and Western companies take flight

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End of an era in Russia as sanctions bite and Western companies take flight

The Iron Curtain, which had divided Japanese and Western Europe for many years, had solely simply collapsed. Now the fast-food chain beloved by Individuals and plenty of others might serve up Huge Macs to Russian prospects.

In fact, Russians can select to eat elsewhere and purchase different items — many homegrown chains have sprung up throughout the huge nation for the reason that demise of the Soviet Union.

“Coke, Pepsi, McDonald’s had been the symbols of westernizing Russia, Russia opening to the world. And the truth that these corporations are leaving… indicators and highlights the extent to which Russia is closing and turning inwards,” mentioned Gulnaz Sharafutdinova, a professor of Russian politics at King’s Faculty London’s Russia Institute.

That first McDonald’s on Pushkin Sq., generally known as Pushkinskaya Sq. to Russians, seated 700 diners and was for years the corporate’s largest outlet anyplace on the earth. Younger center class Russians rising up within the Nineties noticed McDonald’s as someplace cool and alluringly international, a restaurant the place you’d take buddies to have fun particular birthdays.

Because the twenty first century rolled on, the chain appeared a much less potent image of American tradition however remained a favourite venue for Russian school college students to satisfy for reasonably priced lunches or dates, and supplied a quick, low-cost eating possibility for others. Its branches additionally gave job alternatives to tens of hundreds of Russians.

All that’s now gone, at the least for the foreseeable future. “Our values imply we can not ignore the useless human struggling unfolding in Ukraine,” mentioned McDonald’s chief government Chris Kempczinski in a message to workers Tuesday saying the corporate’s suspension of operations within the nation. He added that it was “not possible to foretell” when its eating places would possibly reopen. CNN has reached out to McDonald’s for affirmation of the ultimate deadline for its eating places however has not but had a response.

“Whether or not it’s an finish of an period or not, it is arduous to say proper now, many observers do worry that it is perhaps, and that can rely on how lengthy it would take Russia to undergo the troublesome, darkish, poisonous authoritarian-slash-totalitarian dictatorial interval,” mentioned Sharafutdinova by cellphone. “We’re additionally fairly clear that to shift away from it will take a number of effort — social, political, financial, and management.”

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A soldier gives two cans of Coca-Cola to a tank driver near the Russian Federation building in Moscow, August 21, 1991.

Reputational wound

Many extraordinary Russians are nonetheless reeling from the shock of occasions over the previous two weeks. With information protection of the conflict tightly managed by the state, it is arduous to take inventory of precisely how a lot their world has modified with the imposition of Western sanctions.

However financial ache is already being felt because the ruble’s worth crashes and financial institution controls tighten. Whereas some rich Russians scrambled to promote property overseas and even to depart the nation whereas they nonetheless might, the much less prosperous have fewer choices.
Shoppers go past the closed H&M store in Vegas shopping mall on March 4, 2022 in the Russian capital.

Essentially the most speedy impression will clearly be on those that work for the Western corporations who’ve suspended their operations, though there have been guarantees of continued help from their employers.

In his assertion, Kempczinski mentioned the 62,000 workers in Russia “who’ve poured their coronary heart and soul into our McDonald’s model to serve their communities,” would proceed to be paid. He additionally famous the impression on “lots of of native, Russian suppliers and companions who produce the meals for our menu and help our model.”

Swedish furnishings big IKEA, which first opened its doorways on Russian soil in 2000 and now has 17 shops throughout the nation, mentioned its resolution to pause all exports and imports out and in of Russia and Belarus and to cease all IKEA operations in Russia, would have a direct impression on 15,000 employees.

“The ambitions of the corporate teams are long run and we’ve got secured employment and revenue stability for the speedy future and supply help to them and their households within the area,” IKEA mentioned in a press release.

Shoppers wait in a line to pay for their purchases at the IKEA store March 3, 2022 in Moscow.

For different Russians, the impression, whereas much less direct, is more likely to be demoralizing on two ranges, mentioned Tomas Chamorro-Premuzic, professor of enterprise psychology at College Faculty London. Firstly, they’ll lose entry to services and products they take pleasure in — but in addition, and maybe extra painfully, they’ll really feel the reputational wound of being “ostracized by the world, and vilified,” he mentioned by e mail.

In fact, the response throughout totally different sections of Russian society will fluctuate, Sharafutdinova factors out. A few of the corporations suspending their operations in Russia are luxurious manufacturers whose merchandise would have been out of attain for the overwhelming majority of Russians.

However others, like IKEA, or Starbucks, and even McDonald’s, “had been locations that had been visited and used and consumed by Russia’s center courses” in city areas regularly, she mentioned, and their loss will have an effect on giant numbers of individuals. “There will likely be replacements however it’s yet one more image of center class for the Russians and they are going to be dropping that entry,” she mentioned.

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Outdoors these city areas, the place views are extra cosmopolitan, the response is extra more likely to be certainly one of defiance within the face of sanctions, Sharafutdinova added, with the West seen as turning in opposition to Russia.

These Russians “would think about themselves to be kind of Russian patriots who care about Russia’s nationwide pursuits, as a result of that is how the federal government presents that… they are going to be in a defiant mode and consolidate behind the management and say, ‘Okay, it is higher that we are going to construct our financial system,’” she mentioned.

Russian President Vladimir Putin on Friday insisted that Western sanctions represented a possibility for Russia’s $1.5 trillion financial system, the eleventh largest on the earth.

“Current years have proven that the place Westerners imposed restrictions in opposition to us, we acquired new competencies and restored outdated ones at a brand new technological degree,” Putin mentioned, talking alongside Belarusian chief Alexander Lukashenko in Moscow.

“It is a time of alternative to maneuver in direction of strengthening technological and financial sovereignty,” Putin added.

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People are seen at a McDonald's restaurant in Moscow on March 9, 2022.

Job losses

Some in Russia are responding to the pullout by Western manufacturers with darkish humor. New memes are making the rounds on social media, corresponding to one suggesting that IKEA’s big plush sharks, for which there was beforehand a craze in Russia, ought to have been stockpiled, or indicating that meals from McDonald’s is now being bought on Avito, a Russian equal of eBay or Craig’s Listing.
China's amateur investors are betting big time on a boost to Russian trade
One Twitter consumer posted an image of individuals queuing outdoors the Pushkin Sq. McDonald’s again in 1990 with the ironic caption (in Russian): “Moscow, the opening of a McDonald’s restaurant, March 2025.”

Nonetheless, the symbolism of the world’s withdrawal from Russia could have an emotional and psychological impression, Chamorro-Premuzic mentioned.

“It is not likely in regards to the purposeful lack of paying extra for furnishings or not having your favourite burger or espresso, however the truth that you’ve got grow to be public enemy primary. With any dangerous chief or despotic ruler, it’s the nation’s residents that suffer essentially the most.”

Job losses might also comply with if corporations determine to shut down operations completely, relatively than simply suspending them, added Chamorro-Premuzic. “These are massive employers and similar to they created many roles once they got here, the roles will go in the event that they depart,” he mentioned.

However this doesn’t imply these corporations will bid farewell to Russia eternally. The businesses might, in fact, “very simply return if there are vital political modifications, authorities modifications, modifications of status,” mentioned Chamorro-Premuzic.

“In fact it’s a massive marketplace for corporations, so they’ll have the identical incentive to return than they needed to go there the primary time. So, if there isn’t a ethical or model status obstacle, they’ll return.”

In the meantime, in response to Putin, Russia and Belarus will get by way of the difficulties introduced by sanctions and can even “purchase extra competencies, extra alternatives to really feel unbiased, self-sufficient, and finally profit [from them], because it was the case in earlier years.”

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Video: Community L.A. Fire Brigade Steps In to Help Evacuate Residents

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Video: Community L.A. Fire Brigade Steps In to Help Evacuate Residents

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Community L.A. Fire Brigade Steps In to Help Evacuate Residents

Deep into the evacuation zone, volunteers are stepping in to evacuate L.A. residents from encroaching wildfires. Armed with radios, hoses and knowledge of the area, this brigade offers help to overextended fire departments as they try to reach people who have yet to flee.

“Top is Yankee.” “Victor’s your side. Yankee is the other side of Topanga, OK?” Community fire brigade volunteers are on the streets of Topanga, California. The Palisades fire was encroaching on this home, and Keegan Gibbs and his team were working to evacuate the owner. “OK, hi. So I gotta do this fast, so.” “I honestly just kind of want you to leave, because it’s getting bad.” “No we’re out of here in five minutes.” The brigade works to back up the fire department when resources are stretched thin. “L.A. County and the other supporting agencies are the best in the world at what they do. Events like this, it’s not enough.” The Palisades fire has now been burning for several days, and has destroyed tens of thousands of acres. “It makes no sense for somebody to try to stay here. It’s so unbelievably dangerous.” “I walked kind of with Keegan a little bit. We were going to stay, probably going to stay for a little while, but we walked the property and it’s just almost like, I just don’t think it’s safe. Can you just open that? I’m want to throw some more stuff in here, and then we’ll be good. Just going to put pictures, important memorabilia.” “There’s a huge denial that people won’t be affected by fire, and we have to be advocates for people to realize and accept that risk.” With firefighters still unable to contain two of the region’s largest fires, more L.A. residents are expected to join the tens of thousands who have already been forced to evacuate. “Our mission is to make sure people are safe, just full stop.”

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Malaysia expects surge of Chinese investment, economy minister says

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Malaysia expects surge of Chinese investment, economy minister says

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Chinese chipmakers and technology companies are heading to Malaysia in droves, its economy minister Rafizi Ramli said, as Beijing prepares to face more tariffs when Donald Trump returns as US president this month.

The moves by Chinese companies, which are expected to result in billions of dollars of investment in Malaysia in the coming years, would rival the US companies that have dominated the country’s market, he said.

“Chinese [companies] are very keen to go outside and expand beyond their domestic market,” Rafizi told the Financial Times in an interview. “Those companies are now looking at relocating or expanding into Malaysia.”

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Trump has threatened to impose 60 per cent tariffs on Chinese imports when he re-enters the White House on January 20, rattling investors and putting companies on alert to restructure their supply chains.

Malaysia has been a big beneficiary over the past decade of such “China-plus-one” strategies, where multinational companies complement their Chinese operations with investments in regional countries to diversify risk and lower costs.

It has also positioned itself as a crucial player in global supply chains for high-tech industries such as artificial intelligence, with long-standing semiconductor manufacturing operations in Penang in the north and a burgeoning hub for data centres in the southern state of Johor.

US companies have dominated these sectors in Malaysia, but Rafizi said he expected a wave of Chinese investment on the back of initiatives his government was putting in place to develop the industries further.

Joe Biden’s administration has restricted sales of advanced chips by US companies to China, posing a potential threat to their investments in Malaysia, where many of the products are manufactured, and opening the door for Chinese competitors.

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Rafizi said he made a 10-day trip in June to China, where he met 100 AI, tech and biomedical companies to assess their appetite for investing in Malaysia. He added that these efforts had resulted in two investment delegations from China in the past few months.

“Chinese investments usually come with their own ecosystem,” he said. “We will be seeing more and more, especially if we can secure the first two or three anchor investors from China.”

He added that many companies were also seeking to increase exposure to the fast-growing south-east Asian market as China’s economic momentum slows and trade with the US faces additional barriers.

This week, Malaysia signed an agreement with Singapore to create a vast special economic zone between the two countries. Malaysia hopes the initiative will add $26bn a year to its economy by 2030, bringing in 20,000 skilled jobs and 50 new projects.

Between 2019 and 2023, Malaysia attracted $21bn of investment into its semiconductor industry and $10bn into data centres — the storage facilities that enable fast-growing technologies such as AI, cloud computing and cryptocurrency mining. In the past year alone, US tech companies Amazon, Nvidia, Google and Microsoft committed nearly $16bn, mostly for data centres in Johor.

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TikTok owner ByteDance is the largest Chinese group to invest in Johor, with a $2bn commitment last year.

Rafizi said that while historically, Malaysia had been happy to accept any foreign investment, it was becoming more selective as it sought to contribute more value to the products and services it produced.

He added that while increasing US-China tensions would harm global trade, it could prompt Chinese companies to give Malaysia a bigger role in chip design, rather than just manufacturing, which would generate more income as the country climbed the value chain.

“The unintended consequence of some tariff measures targeted at Chinese companies basically helps countries like Malaysia to weed out the more genuine and long-term investments from China compared to the ones that just look to use Malaysia as a manufacturing outpost,” he said.

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USDA report finds Boar's Head listeria outbreak was due to poor sanitation practices

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USDA report finds Boar's Head listeria outbreak was due to poor sanitation practices

Boar’s Head meats are displayed at a Safeway store on July 31, 2024 in San Rafael, Calif. The USDA released a new report on what led to the listeria outbreak.

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A U.S. Department of Agriculture report has found that “inadequate sanitation practices” at a Boar’s Head facility in Virginia contributed to a listeria outbreak that left 10 people dead and dozens hospitalized around the country last year.

The report, released Friday by the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS), reviewed the listeria outbreak linked to the deli meat supplier’s facility in Jarratt, Va.

In one case, inspectors said they found “meat and fat residue from the previous day’s production on the equipment, including packaging equipment.” Other instances included dripping condensation “on exposed product” and “cracks, holes and broken flooring that could hold moisture and contribute to wet conditions.” 

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The outbreak lasted from July through November 2024, according to the Centers for Disease Control and Prevention. With cases reported in over 19 states, it was the largest outbreak of the foodborne bacterial illness since 2011.

In an email to NPR, a spokesperson for Boar’s Head said: “We continue to actively cooperate with the USDA and government regulatory agencies on matters related to last year’s recall, and we thank them for their oversight.”

In addition, the spokesperson said the company is working to implement enhanced food safety programs, “including stronger food safety control procedures and more rigorous testing at our meat and poultry production facilities.”

Boar’s Head recalled its ready-to-eat liverwurst products linked to the outbreak in July. The recall later expanded to dozens of products, including sliced hams and sausages, all of which were manufactured at the Virginia plant.

USDA inspection reports show sanitation violations were routine and not isolated at the plant, NPR previously reported. The reports found dead bugs, dripping ceilings, mildew and black mold near machines at the plant.

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In September, Boar’s Head permanently closed its Jarratt plant and the company announced it would discontinue making any liverwurst products.

Friday’s report also included a review of FSIS’s own practices and procedures to prevent the spread of listeria, including ways to enhance its regulatory and sampling approach to the illness. The report cited “equipping FSIS inspectors with updated training and tools to recognize and respond to systemic food safety issues” as one of the steps the agency would take to protect the public from listeria.

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