When Gorbachev lifted the iron curtain, Western businesses rushed in

Published Wed, Aug 31, 2022 · 04:50 PM

IN JANUARY 1990, crowds of Russians lined up in Pushkin Square, in Moscow, for the opening of the country’s first McDonald’s. One customer later told The New York Times that he had spent 4 days’ salary on a Big Mac, a cheeseburger, an apple pie and 2 milkshakes.

The buoyant scene was one result of reforms put in place by Soviet leader Mikhail S Gorbachev, whose death at 91 was announced on Tuesday (Aug 30). The changes opened the floodgates for the multinational companies that had been almost entirely shut out of the Soviet Union during the Cold War to enter the country.

In the years that followed, many urban, middle-class Russians developed an appetite for American fast food, cars and blue jeans. It was an era that came to an abrupt halt earlier this year, when Russia’s invasion of Ukraine prompted more than 1,000 companies – including McDonald’s – to exit the country.

Beginning in the early 1990s, American brands flocked into Moscow and St Petersburg, finding an enormous market of eager consumers weary of Soviet-era shortages, and establishing a base from which to launch operations in the region.

Nine months after that chaotic scene at the Moscow McDonald’s, Pizza Hut opened its first 2 restaurants in the country, offering salmon and sardines as toppings.

Levi Strauss & Co opened its first store there in 1993, selling 5-pocket jeans for $49, more than double the average monthly salary in the country. That same year, the company then known as Apple Computer said it would start an effort to tap into the market of the former Soviet republics, capitalising on the lifting of Cold War restrictions on technology exports.

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“Virtually every household in the newly independent states will know that Apple Macintosh is now within reach,” said a company official.

In 2002, Ford became the first foreign automaker to open a wholly owned production line in Russia. General Motors followed later that year with a major investment to build a new SUV designed by a local partner.

This year, after the Russian invasion of Ukraine, all of those companies announced plans to put their Russian businesses up for sale or suspend their operations in the country. NYTIMES

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