Why IKEA Is Fed Up with Russia • Hacker News Board

Re: Why IKEA Is Fed Up with Russia

#71

Post by drinian » Mon, Jul 06, 2009, 5:55 PM UTC

ilyak wrote: post #34

presto10 wrote: post #28

Earlier quoted context omitted.

Are you claiming that Ikea is using corruption (bribing someone) in Russia? On what grounds?

Because every big corporation uses corruption unless proven otherwise. Sorry. Especially global corporations are known for doing it in less economically developed countries to own them as they wish. Example is South America: there were some wars, even, growing out of conflict between two American oil corporations.

This is an attitude that I see more out of writers from countries with corrupt governments. Perhaps it's a way of trying to justify your own country's problems, rather than working to fix them?

Re: Why IKEA Is Fed Up with Russia

#72

Post by krschultz » Mon, Jul 06, 2009, 6:02 PM UTC

steveblgh wrote: post #51

The article makes the implicit claim that IKEA does a favor to Russians by selling them stuff and not Russians do by buying the stuff. I'm not saying the opposite just that this is not as obvious as the article makes it sound. It says that they invested x billions of dollars. Obviously they are planning to make a profit, so on the net money will leave the country due to their presence. If I understand correctly they…

And they pay rent in what country?

Built buildings in what country? With materials and contractors sourced from what country?

Have employees from what country?

Re: Why IKEA Is Fed Up with Russia

#73

Post by stcredzero » Mon, Jul 06, 2009, 6:22 PM UTC

radu_floricica wrote: post #65

Confusion wrote: post #18

Earlier quoted context omitted.

If you need to pay bribes, you need to raise your prices to still make a profit. Your customers, i.e. you , need to pay more. Corruption hurts the population of a country, as every cent comes directly out of their pockets. That is partly why people in properly democratic countries have, and keep , a higher standard of living.

It's much worse. The cost of bribes is bigger then the actual sum, and incomparable for the economy as a whole. A bribe-based economy has very high barriers of entry, especially when the main client in your industry is the state. Which means low competition which means... lots of bad things.

low competition which means... lots of bad things.

Example: Cell Phone service in the US. Actually, that's not the worst possible, but we are lagging the rest of the world.

Re: Why IKEA Is Fed Up with Russia

#74

Post by stcredzero » Mon, Jul 06, 2009, 6:24 PM UTC

Retric wrote: post #58

steveblgh wrote: post #51

The article makes the implicit claim that IKEA does a favor to Russians by selling them stuff and not Russians do by buying the stuff. I'm not saying the opposite just that this is not as obvious as the article makes it sound. It says that they invested x billions of dollars. Obviously they are planning to make a profit, so on the net money will leave the country due to their presence. If I understand correctly they…

In theory, trade only happens when it benefits both parties. I might hate the local Exxon selling soda for 2$ a bottle, but I can still buy it at other stores. The only reason you complain is they are charging you for the amount of effort they save you and not their costs. So, opening a store is a net gain, as is investing 4 billion in the economy. In theory.

Trade happens when both parties think it benefits them. If one side gets fooled and screwed enough, it should stop. If that one side is the government, it may not, since it is paying with someone else's money.

Re: Why IKEA Is Fed Up with Russia

#75

Post by steveblgh » Mon, Jul 06, 2009, 6:41 PM UTC

krschultz wrote: post #72

steveblgh wrote: post #51

The article makes the implicit claim that IKEA does a favor to Russians by selling them stuff and not Russians do by buying the stuff. I'm not saying the opposite just that this is not as obvious as the article makes it sound. It says that they invested x billions of dollars. Obviously they are planning to make a profit, so on the net money will leave the country due to their presence. If I understand correctly they…

And they pay rent in what country? Built buildings in what country? With materials and contractors sourced from what country? Have employees from what country?

Sure, but on the whole they make a profit, so the money they take out of the country will be more than what they bring in the form of products, rents, wages, etc. or otherwise they would go bankrupt.

Re: Why IKEA Is Fed Up with Russia

#76

Post by cellis » Mon, Jul 06, 2009, 6:55 PM UTC

asdflkj wrote: post #69

Confusion wrote: post #13

There was an article in one of our national newspapers this weekend that shows how deep the corruption goes. A huge investment company, with 4 billion in assets, was unwilling to pay up and was driven out of business. Several government officials committed fraud to the extent of 290 million dollars (seizing taxes the company paid to the Russian government) and despite sending different parts of the government piles o…

"These days" as opposed to which days? Yeltsin days? If this is what you meant, then this is sneaky of you (perhaps unintentionally so), because you are offering political opinion, which is wrong, and which I may not refute on this site because of its political nature. Corruption is a fact of life in Russia--almost a natural law--and has always been. If you find this distasteful, then don't do business there. Ikea ha…

I don't think it was a retrospective statement. I think he meant "these days" as opposed to days in the future, where Russia is less corrupt than it always has been. Saying this is political opinion is a straw man argument.

Re: Why IKEA Is Fed Up with Russia

#77

Post by rdtsc » Mon, Jul 06, 2009, 7:04 PM UTC

krschultz wrote: post #72

steveblgh wrote: post #51

The article makes the implicit claim that IKEA does a favor to Russians by selling them stuff and not Russians do by buying the stuff. I'm not saying the opposite just that this is not as obvious as the article makes it sound. It says that they invested x billions of dollars. Obviously they are planning to make a profit, so on the net money will leave the country due to their presence. If I understand correctly they…

And they pay rent in what country? Built buildings in what country? With materials and contractors sourced from what country? Have employees from what country?

So are you suggesting that IKEA is in the philanthropic business of propping up developing countries? At a loss, they will provide local workers with employment, will hire local construction companies to build unneeded crap just to help them out? Really?

I know a large part of IKEA's corporate structure is a non-profit organization, but trust me, that is only to evade taxes.

This is a giant corporate entity vs. a giant corrupt government. IKEA is complaining against the complicated bureaucratic nightmare that Russia set up so that it would be easier to extract bribes from companies like IKEA. _Technically_ IKEA is one breaking some local construction safety rules. Somehow I don't see Russians re-writing their crappy laws and regulations to suit IKEA. They might let IKEA ignore some of them... but that is exactly where the bribes come in ;-)

So far IKEA is going about it the right way -- shaming Russia on the international level.

Re: Why IKEA Is Fed Up with Russia

#78

Post by coyul » Mon, Jul 06, 2009, 7:50 PM UTC

rdtsc wrote: post #77

krschultz wrote: post #72

Earlier quoted context omitted.

And they pay rent in what country? Built buildings in what country? With materials and contractors sourced from what country? Have employees from what country?

So are you suggesting that IKEA is in the philanthropic business of propping up developing countries? At a loss, they will provide local workers with employment, will hire local construction companies to build unneeded crap just to help them out? Really? I know a large part of IKEA's corporate structure is a non-profit organization, but trust me, that is only to evade taxes. This is a giant corporate entity vs. a gia…

IKEA does not have to be "in the philanthropic business" to benefit the countries in which they have operations. The fact that they make a profit does not preclude other people (the landlords, contractors and employees in the post you replied to, among others) from benefiting. Economics is not a zero-sum game. Wealth can be created. More at http://www.coyoteblog.com/coyote_blog/2007/04/wealth_creatio...

Re: Why IKEA Is Fed Up with Russia

#79

Post by radu_floricica » Mon, Jul 06, 2009, 8:48 PM UTC

alexk wrote: post #48

ilyak wrote: post #19

Earlier quoted context omitted.

Sure! Where did I say that corruption is a good thing? But I'm saying that they feed the corruption. By paying bribes.

None of your posts here contains a single fact, just rage. Moreover you are using lexicon (in russian) that unacceptable here. Stop trolling, please.

> Well, you know why they still do business here? The answer is M O N E Y

I thought this was quite insightful. No matter how bad the conditions, there will be companies willing to make a profit there. After all, the choices are enter the market and make some money, or don't enter the market and make none. And Russia is a _big_ market, therefore a potential profit hard to dismiss.

This all means the system there will not run out of fuel very soon. It is less productive though, but their natural resources will probably make up for it. The biggest loser is the population. I read recently in a study of happiness per country Russia is very near the bottom. But as long as there are enough money to move the wheels, the system will go on.

Re: Why IKEA Is Fed Up with Russia

#80

Post by aarongough » Mon, Jul 06, 2009, 9:06 PM UTC

stcredzero wrote: post #73

radu_floricica wrote: post #65

Earlier quoted context omitted.

It's much worse. The cost of bribes is bigger then the actual sum, and incomparable for the economy as a whole. A bribe-based economy has very high barriers of entry, especially when the main client in your industry is the state. Which means low competition which means... lots of bad things.

low competition which means... lots of bad things. Example: Cell Phone service in the US. Actually, that's not the worst possible, but we are lagging the rest of the world.

Luckily you're still getting better service than us poor Canadians!