Why President Zelensky Should Visit A McDonald’s In Kyiv: Reinforce U.S. Companies Welcomed- Even Those Which Had Operations In Russia… Or China? Biden Administration Expects Preferences.
Why President Zelensky Should Visit A McDonald’s In Kyiv?
A Message To U.S. Companies
Big Mac & Happy Meal Purchase Can Reinforce U.S. Companies Welcomed- Particularly Those With Connectivity To The Russian Federation
Government Of Ukraine Increasingly Strident Towards Countries Whose Companies Engaging Or Engaged With Russian Federation. Remember: Taxpayers In These Countries, Who Include Companies, May Be Providing Support To Ukraine.
President Zelensky Must Refrain From “Scarlet Letter” Campaign
Is Connectivity To People’s Republic Of China Next?
Given U.S. Taxpayer Support To Ukraine, U.S. Companies New And Returning To The Country Should Expect “First Among Equals” Status. But, So To Will European Union Member Countries, Turkiye, United Kingdom Among Others. Balancing Challenge For Zelensky Administration.
Within two hundred meters of the office of Volodymyr Zelensky, President of Ukraine, is Maidan Nezalezhnosti (on Khreshchatyk Street in the Shevchenko Raion), the central square of the capital, Kyiv, is a McDonald’s- one of twenty-one locations nearby.
President Zelensky; First Lady, Mrs. Olena Zelenska; and their children, Oleksandra Zelenska and Kyrylo Zelensky, should consider a visit to a McDonald’s.
McDonald’s has 109 locations in twenty-seven cities in Ukraine managed/franchised by Chicago, Illinois-based McDonald’s Corporation (2022 revenue US$22.1 billion). The first Ukraine location of McDonald’s opened 24 May 1997 in Kyiv. As of 2 March 2023, there are sixty-seven locations operational of which forty-three are in Kyiv. The pre-24 February 2022 population of Ukraine was approximately forty-four million.
For comparison, pre-24 February 2022 there were approximately 850 McDonald’s restaurant locations in the Russian Federation (pre-24 February 2022 population approximately 144 million). The first McDonald’s location in the Russian Federation opened on 31 January 1990 in the capital Moscow.
In 2022, McDonald’s Corporation transferred its twenty-five restaurants in the Republic of Belarus to a Belarus-based franchisee and approximately 100 of its 850 restaurants in the Russian Federation to a Russian Federation-based franchisee with the locations renamed “Vkusno & tochka” which translated is “Tasty and that's it.” Some other locations continued to operate absent support from McDonald’s Corporation using the McDonald’s name; and some replaced Big Mac with Bolshoi Burger (“Big Burger”).
United States companies, regardless of their previous, current, or future presence in the Russian Federation, are United States taxpayers- and that means they, like individuals, are funding (borrowing important to reinforce) more than US$110 billion for Ukraine since 24 February 2022 by the 117th United States Congress and what may be another approximately US$50 billion by the end of 2023 in taxpayer borrowing needed to be appropriated by the 118th United States Congress and then distributed by the Biden-Harris Administration (2021- ) to provide commercial, economic, humanitarian, military, and political support to the government of Ukraine, the armed forces of Ukraine, and to the people of Ukraine.
The Washington DC-based Congressional Budget Office (CBO) estimated that US$6.6 billion of the US$113 billion would be spent in Fiscal Year (FY) 2022 and another US$37.7 billion in FY 2023. The CBO estimated more than 50% of the approved funding would be spent by the end of FY 2024 and more than 75% by the end of FY 2026. According to the CBO, approximately 60% (US$67 billion) of the US$113.1 billion has been allocated toward defense needs and 40% (US$46 billion) to nondefense including government assistance, economic support, and refugee resettlement.
What about substantial funding for 2024? Not unless meaningful territorial solidified gains by the armed forces of Ukraine by the end of the third quarter of 2023- defined as removing the armed forces of the Russian Federation from much or all of post-24 February 2022 territory of Ukraine and at least some pre-24 February 2022 territory of Ukraine. Governments (and their constituents) will be reticent to continue funding levels if the armed forces of Ukraine and the armed forces of the Russian Federation are again by the end of the third quarter of 2023 battling, absent much movement in either direction, for the same real estate as from 10 February 2014 to 23 February 2022.
The good news for the government of Ukraine is there remain funds appropriated by the 117th United States Congress that have yet to be dispersed by the Biden-Harris Administration. Thus, no further action is required by the 118th United States Congress and The White House may direct those funds as quickly or as slowly as it deems appropriate.
The bad news for the government of Ukraine is there remain funds appropriated by 117th United States Congress that have yet to be dispersed by the Biden-Harris Administration. This despite the government of Ukraine repeatedly requesting that all funds allocated be dispersed.
Kevin McCarthy (Republican, 20th District, California), 55th Speaker of the United States House of Representatives, will meet with Tsai Ing-wen, President of the Republic of China (Taiwan) within the next weeks. The government of the People’s Republic of China will likely respond in some manner. That response will focus again discussion as to the capabilities of the armed forces of the United States to support Taiwan (which continues to await from the United States approximately US$19 billion in military equipment), ally countries, and partner countries with connectivity to the Sea of Okhotsk, Sea of Japan, East China Sea, Philippine Sea, and South China Sea. This means debating budget priorities- asking United States taxpayers to borrow more to defend Taiwan and other countries, along with Ukraine. Not all will obtain the funding they seek.
There is a responsibility for each of those governments who have publicly confirmed the export of military equipment to the armed forces of Ukraine to deliver in theatre prior to the anticipated full-scale and multiple-target offensive operations by the armed forces of Ukraine during May 2023.
For the Biden-Harris Administration, and some members of the thirty-country North Atlantic Treaty Organization (NATO), they have appropriated funding for military equipment which has yet to translate from available to order to payment to delivery within Ukraine. These deliveries are particularly essential given the distance between what the armed forces of Ukraine want and what those governments providing military equipment to the armed forces of Ukraine continue to believe is needed. The armed forces of Ukraine will commence the anticipated May 2023 offensive without everything it wants which may establish rationale for continuing criticism and possible excuse from the government of Ukraine towards its military equipment providers should the anticipated May 2023 offensive not be successful.
NOTE: The 2024 United States government fiscal year commences on 1 October 2022 and the Biden-Harris Administration will submit its proposed budget on 9 March 2023. The United States Congress (435-member United States House of Representatives and 100-member United States Senate) will then craft its budget through committee and sub-committee hearings. Eventually, a budget will be enacted into law. Unknown is the amount of funding to be specified for programs relating to Ukraine.
For fiscal year 2022, United States government revenue was US$4.90 trillion and spending was US$6.27 trillion, for a budget deficit of US$1.38 trillion. The fiscal year 2023 budget deficit expected to be US$1.40 trillion; and fiscal year budget deficits from 2024 to 2033 are projected at US$2 trillion annually. The United States national debt is US$31.5 trillion. For 2023, United States Gross Domestic Product (GDP) is projected at approximately US$26.3 trillion.
The government of Ukraine must administer neither a Russian Federation-connectivity or People’s Republic of China-connectivity litmus test for the suitability of United States-based companies to re-enter or enter the Ukraine marketplace.
Given United States taxpayers are the primary source of outside support for Ukraine, there is a reasonable expectation that United States-based companies will be first-in-line and first-among-equals for commercial and economic deliverables which are based, in whole or in part, on decisions of the government of Ukraine.
There has thus far been no effort by the government of Ukraine to request the Biden-Harris Administration to subtract from funding delivered to the government of Ukraine any taxpayer revenues derived from United States-based companies which have, had, or may desire to have in the future connectivity to the Russian Federation.
Is appropriate for the government of Ukraine going to disqualify from access to the Ukraine marketplace all United States-based companies importing from the Russian Federation or exporting to the Russian Federation products authorized by the Bureau of Industry and Security (BIS) of the United States Department of Commerce, United States Department of Defense (DOD), or Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury? Authorized products include fertilizers, rare earth metals, radioactive isotopes, enriched uranium rods, and titanium among others.
Would the government of Ukraine find appropriate for the Biden-Harris Administration to disqualify from receiving directly or indirectly United States taxpayer support any government of Ukraine institution, government of Ukraine agency, or Ukraine-based company that engaged previously with the Russian Federation or People’s Republic of China? To disqualify from engagement any Ukraine-based company where there was evidence or suspicion of corruption?
Unwise for the government of Ukraine to embrace a “you are 100% with us or against us” posture with respect to engagement or re-engagement by companies located outside of Ukraine.
The Ukraine marketplace is not new to the global marketplace. Not some untapped Shangri-La. Since 1991, companies from throughout the world have evaluated, investigated, sampled, and engaged with for too many companies engagement unfilled due to chronic corruption in Ukraine and lack of transparency and inconsistency from successive governments of Ukraine. President Zelensky maintains that the DNA has transformed since 24 February 2022 to expel corruption from landscape.
Equally unwise for the government of Ukraine to embrace a “arrive now or be locked out later” posture. The marketplace in all countries benefits when some companies accept greater risk and endure operational problems while other companies, including competitors, learn prior to making a decision about the marketplace. Appropriate for companies to be rewarded for accepting risk, but companies should not be penalized for exerting caution.
McDonald’s Corporation could- and should consider, deploying temporarily “pop-up” or mobile McDonald’s to Kharkiv and Odesa.
Starbucks Corporation could enter the marketplace Ukraine- though competing with entrenched Ukraine-based coffee houses would be challenging given the preferences of citizens of Ukraine.
Should either of these absences result in penalties for the companies by the government of Ukraine? No. They should not.