Between NATO and Russia: A Complex International Politics and its Influence on Businesses

After the Cold War ended in 1991, Russia lost its power over the NATO nations. Each country gained its sovereign rights over their natural resources and economies. However, 30 years later, Russia seems to be getting its influence back. It has become an important player in global politics, joining the US, and has already partnered with other powerful forces like China and Iran. It is also important to note that the EU countries have become more influential recently as well. Global politics have gotten more and more complicated in recent years, and this confusing situation has been influencing the business world.  

Russia’s Relationship with EU Nations

To this day, a lot of the EU members are still highly dependent on the oil and natural gas imported from Russia. Russia has been controlling many natural resources, and can even use armed forces to protect them. Its natural gas pipeline has recently added additional worries to other countries as well. As a result, there are still several unresolved issues between the countries over energy resources.  

When starting a business, picking the right location is crucial. Many factors might influence this process, like being close to the targeted markets or cheap labor force, skilled labor, and energy prices. For instance, if a company builds a production facility in Turkey, it needs to face relatively higher energy prices because of the natural gas import agreement between Russia and Turkey. Therefore, if similar logistic conditions are provided, building a production facility in Hungary, Bulgaria, or any other EU member country might help the company avoid high energy costs. Producing vegetables and fruits in Turkey or purchasing them from Turkish producers may also limit the number of markets the company can work with since Turkish imports are banned in Russia. Make sure to always look out for any other underlying political sanctions that can affect your business.

NATO’s Current Status

NATO has undergone several changes lately for many reasons. To begin with, President Trump is not a big fan of NATO, but the EU countries are still in favor of continuing the organization. Turkey, along with other countries, has politically shifted to a new position between NATO and Russia. Trump management has also destroyed the agreement between the US and Iran on the production of nuclear weapons, ruining chances for Iran to make peace with Western countries. Thus, there is still a dangling political environment left in NATO. This situation has already shaped the political trade barriers and political sanctions in certain countries. A new world politics is coming into existence, and the global business environment will be greatly affected.

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