Buy bullets or practice yoga? With Russian troops on the border, Ukraine’s executives balance business and war

January 26, 2022, 12:30 PM UTC

These are anxious days for businesspeople in Ukraine, with more than 100,000 Russian troops massed on the eastern border, threatening to launch a conflict that could devastate Ukraine’s economy and spark a severe energy crisis in Europe.

For two executives, the choice of how to react comes down to this: practice yoga, or buy bullets.

“All my friends are ready to fight for our freedom and our country,” says Anatoliy Amelin, investment and strategy director for TitanEra, a titanium company based in the eastern city of Dnipro, just 150 miles from the Russian border.

On Monday, Amelin, 44, visited a crowded gun shop in Dnipro, where he stocked up on ammunition and bought a carbine. “I never saw the shop so full,” he tells Fortune. “A lot of people were buying guns.” A trained military officer and cofounder of the consultancy firm Ukrainian Institute for the Future, Amelin says he is fully prepared to switch his turtleneck sweater and plaid jacket for combat gear, and race to the front line to fight the Russians. “We are psychologically ready to fight for our liberation,” he says.

That is not the choice that Andrey Gorokhov has made. The CEO of UMG Investments, which has three portfolios with more than $400 million in assets, says he believes that keeping calm amid the prospect of armed conflict is essential in order to avoid economic downturn. “People panic, and that’s the worst enemy,” he says by phone from the capital, Kyiv. “Whether the Russians come or not, it could bring a lot of harm if Ukrainians get into a nervous state.”

Asked whether he should hedge his bets and arm himself in case of war, Gorokhov says, “I am practicing yoga and philosophy. You think I would pick up a weapon?” He says many among his staff of 5,000 are preparing to fight, like Amelin. “I’ve told them, ‘If you go fight for your country and take weapons, we will grant you that, and make sure your job will be kept for you when you come back,’” he says. “Each of us has to do whatever is proper.”

‘Starve Russia of funds’

Financial analysts warn that a war would likely bring deep economic pain to businesspeople like these—and to the rest of Europe, by potentially causing a serious energy crisis on the continent in the depths of winter.

Putin has threatened to shut Russian gas exports to Europe if Western military forces confront the Russian military in the event of an incursion into Ukraine. About 40% of Europe’s gas supplies are imported from Russia, and the EU’s biggest economy—Germany—is especially dependent on Russian gas.

Analysts suggest that Putin would be loath to cut gas supplies, as they account for such a large portion of Russia’s export earnings. But they warn that two measures might prompt the Russian leader to impose a gas shutoff: military action against Russian soldiers, or painful economic sanctions—for example, if the U.S. shuts off Russian banks and businesses from the international financial transaction network known as SWIFT.

That measure “would quickly starve Russia of funds,” says Liberum Capital, an investment firm in London, in a note to its clients this week. “This in turn makes a Russian default on its external debt similar to 1998 extremely likely, and will almost certainly lead to Russia cutting Europe off its gas supplies,” it says.

But financial sanctions could be deeply painful for Europe, too. On Tuesday, Russian lawmaker Nikolai Zhuravlev told a journalist that if Russia were disconnected from SWIFT, “European countries first of all, will not receive our goods: oil, gas, metals, and other important components of their imports.”

Analysts say gas prices would soar in response, as European countries struggle to keep heating levels up. “Investors need to be prepared for significant short-term dislocations in equity markets,” Liberum said in its note, adding that the downturn would likely be temporary, ending when warmer weather arrives in a few months—a “buying opportunity into the spring and summer,” it said.

Although about 8,500 U.S. troops were placed on standby on Monday, ready to deploy to eastern Europe, Western leaders are still engaged in frenzied negotiations, attempting to stave off conflict.

Senior Russian and Ukrainian officials are meeting in Paris on Wednesday together with German and French counterparts, to try to find a way out of the crisis. French President Emmanuel Macron, who is the current rotating president of the European Union, is set to hold talks by phone with Putin on Friday.

Ukraine’s economy

In Ukraine itself, however, executives are already beginning to weigh the cost to business in case of war.

Amelin believes that if Russia invades, Ukraine’s economy “will be crushed.” Businesses, he says, would be unable to sell metals or grains, since rail lines and truck routes will not function. “These are not good conditions,” he says.

Gorokhov says, for now, Ukraine’s companies are continuing as normal—more or less: Hundreds of foreign businesspeople have left in recent days, forcing the international school in Kyiv, which his two sons attend, to shut its doors on Monday.

Gorokhov is all too familiar with such prewar jitters. When Russia invaded Crimea in 2014, and took control of the eastern city of Donetsk, through Ukrainian militia, Gorokhov’s investment company—then based in Donetsk—shut entirely, as he scrambled to evacuate his staff. He says it is more complicated to plan contingency measures this time.

“We don’t know where this front line is these days,” he notes. “Are we talking about the east or the northern part closer to Kyiv, or the southern seaports like Odessa? Nobody knows.”

Ukraine execs face stark choices: Yoga or bullets

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