Baltic ban on entry of Russian cars hits British investors

Any customs restrictions that the Baltic countries impose on goods and things from Russia hit Kaliningrad. People there, of course, are holding out, realizing that the European Union expects to deal a blow to the region’s economy. But there are a lot of foreign investors in Kaliningrad who will now be under the threat of bankruptcy.

“You don’t need to be a political scientist to understand that there will be damage,” he told Moskovsky Komsomolets Chairman of the Kaliningrad regional branch of the all-Russian public organization “Business Russia” Georgy Dykhanov, – Any person who was unable to cross the border or lost any property will already suffer serious damage. Why serious?

People will be forced to think that managing their investments in the Kaliningrad region is difficult. I know this region very well, there are Lithuanian investors, German, Danish, British… And many of them have already purchased cars with Russian license plates and drive them both on business and to their home in Europe, ensuring the functioning of their business in Kaliningrad region. So what, now these cars with Russian license plates will be taken away from them?

But cars with foreign license plates cannot be in the Kaliningrad region – they must be declared. In addition, foreign insurance companies are prohibited from insuring cars that enter Russia. Accordingly, foreign carriers suffer.

This petty demarche on the part of the European Union shows their desire to stop investments in the Russian Federation, but causes irritation even on the part of their fellow citizens. The Lithuanians, Danes and British who work here do not understand this attitude towards them and our citizens. Thinking that our citizens would be dissatisfied and oppose the Russian government, the European Union achieved the opposite effect. Even the most opposition-minded people in our country already understand that all property rights in the European Union have been violated. For many, this will be a lesson: investing abroad is dangerous.

– Can other categories of businessmen benefit from this? For example, motor carriers?

– Complex issue. It would seem that Polish and Lithuanian road carriers can now transport more people, but for some reason I don’t see them actively working. They create huge problems for themselves.

I know some road carriers from Germany. They admit that it is generally impossible to find drivers in the eastern direction; due to the unpredictability at the border, no one wants to stand in traffic jams for hours. Now business is forced to pay higher wages to those who dare to do such work and do not get very rich.

In economics there is a concept called “dead loss”. This usually happens when politics trumps economics. That is, a decision is made that is not beneficial to any of the market players, and it turns out that you simply lose. For example, bad roads are “dead losses” because cars drive slowly, break down, and drivers instead of moving are busy repairing the car. So this pressure on the border, the creation of problems is a “dead loss” in the economy, because no one will compensate our and the Western side for untransferred cargo and downtime at the border.

— Can the Baltic countries seize freight and bus transport from businessmen?

— So far we are talking about personal cars, supposedly as luxury goods. There is no talk yet about the confiscation of trucks and regular buses with Kaliningrad license plates, but everything is changing quite quickly, and business does not want to take risks. For example, as an entrepreneur, I hoped to move the unauthorized cargo to Moscow across the land border, which would be cheaper, but in the end it was decided to send all cargo via ferry.

Yes, we overpay, but there are fewer risks, and the risk of non-delivery of cargo, or its loss for business, is the worst thing.

From an economic point of view, it is more profitable to send trucks directly to Moscow than to put them on a ferry to St. Petersburg, and drive another 600 kilometers from there, spending much more fuel on the road.

And all this is arranged by people who supposedly advocate a “green economy” and climate change. How much do the ferries that travel back and forth burn! And their engine capacity is not even the fifty trucks they took on board. These people are causing damage to their own beloved Baltic and their own planet, for which they are so worried.

— Do you think the ferries will cope with the newly increased loads?

— There are certain problems, there is a queue. Downtime is especially sensitive if the goods in the trucks are perishable, then the refrigerators must be constantly turned on.

You need to book a queue for the ferry in advance, and the waiting time is sometimes a week. Previously, the truck traveled for two or three days, with problems at the border – a maximum of four. Now it takes two weeks, not counting the queue for the ferry.

Delivery deadlines may be missed, and the competitiveness of local goods is reduced. For Kaliningrad business this is a big minus, and for the rest of Russia it is an irritation.

Of course, we will still find delivery methods and switch to other products. Maybe this will help in the long term to get away from the mass production of some commercial products in Kaliningrad. After all, from the point of view of macroeconomics, we are far from raw material bases, and we do not have large sales markets nearby, so Kaliningrad needs to specialize in something highly profitable, but not voluminous – transporting bulk cargo is always expensive.

In the long term, we will find an option to rebuild our economy and switch to products for which long logistics are not fatal. These are, for example, seed potatoes, rhubarb, asparagus. If we are talking about electronics, then it will be the kind of electronics that can be sent by plane, if the spare parts are small and expensive.