A costly bargain

For many young Russians the future is bleak. [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( The exodus of foreign companies from Russia may hurl the country back decades in just a few weeks, as consumer goods and services are denied a whole cohort of those under 40 who took them for granted.  This is the “Putin generation” that came of age under the Russian leader’s 22-year rule and that largely accepted the deal he offered: a promise of economic prosperity, but few rights and little or no political influence. Key reading: - [War Accelerates Russia’s Internet Isolation]( - [Sony, Uniqlo Join Global Brands Disappearing From Russia]( - [To Punish Putin, the World Turned Finance Into a Weapon of War]( - [Richest Russian Dissents on Putin’s Tit-for-Tat Over Sanctions]( - [Putin Clings to Russia’s Market Economy as Sanctions Wind Back the Clock]( - Follow the latest with our [rolling coverage]( The older ones may have childhood memories of the grinding poverty of Russia’s “hungry ‘90s” after the Soviet Union’s collapse. Many who worked hard to build businesses, careers and better lives for themselves have a visceral fear of worsening prospects for their children. Younger middle-class Russians in Moscow and other major cities have no such memories. Like 20-somethings everywhere, they’ve enjoyed overpriced coffee shops, cool sneakers and globalized tech-savvy lifestyles that offered futures filled with promise. All that came crashing down when Vladimir Putin invaded Ukraine. Whatever economic hardships Russians face, they pale in comparison to the death and suffering being inflicted on Ukrainians. To be sure, most people in Russia’s provinces continued to lead hard lives and to back Putin, resentful of the “liberal” urban elite that criticized him. Still, the world for Russians is changed utterly. Some nurse grievances they’re being punished for decisions by Putin they couldn’t affect. A courageous minority did take big risks fighting for change over the years, joining street protests called by opposition leader Alexey Navalny, now imprisoned, and exposing corruption in Russia’s dwindling independent media. Many have now fled Russia. For those in exile and those who’ve stayed, the bill is falling due for the Faustian bargain Russians struck with Putin. It’s a lesson that may not be lost on people in other authoritarian nations where leaders have offered prosperity in return for unquestioning obedience. — [Anthony Halpin]( Bubble dining tents at the O2 Lounge restaurant on the roof of the Ritz-Carlton hotel in Moscow. Photographer: Andrey Rudakov/Bloomberg Sign up [here]( for the Special Daily Brief: Russia’s Invasion of Ukraine and click [here]( for this week’s most compelling political images. Global Headlines Ending privileges | U.S. President Joe Biden is set today to call for an [end]( of normal trade relations with Moscow, clearing the way for increased tariffs on Russian imports, sources say. [Jenny Leonard]( writes that his announcement is expected to come alongside similar action by the Group of Seven nations and European Union leaders. - Washington is weighing sanctions [targeting]( Russia’s nuclear industry that are fraught with risk for European and U.S. utilities reliant on reactor fuel from the country. European shockwaves | The economic impact of the war in Ukraine is [rippling]( out across the continent. Disrupted supply chains, sanctions, surging energy costs and worries about a looming drop in demand are among the burdens weighing on businesses Europe-wide as Russia presses on with its invasion. Ukraine has raised the equivalent of about 2% of its 2021 gross domestic product to fund its budget, help the nation’s payments and support its military efforts since Russia’s invasion. And the tally may get even bigger in the coming weeks, as the country prepares for another round of military bond auctions. Rallying cry | Biden tried to [bolster]( his party in an optimistic speech to the Democratic National Committee yesterday ahead of decisive Congressional midterm elections in November. He spoke as the coronavirus pandemic and Russia’s invasion of Ukraine have converged to drive up prices that Americans are paying for gasoline, food and housing. Best of Bloomberg Opinion - [Will Foreign Fighters Help, or Hinder, Ukraine?: Ruth Pollard]( - [What Will Be the Inflation Hit From Ukraine?: John Authers]( - [Why Narendra Modi's Party Keeps Winning Elections: Mihir Sharma]( Stepping down | China’s Premier Li Keqiang said this year would be his [last]( in the role at the close of annual parliamentary sessions in Beijing. But it’s probably not a total exit from power: Li, 66, is young enough to keep his place on the supreme Standing Committee at a leadership reshuffle later this year, where President Xi Jinping is expected to secure a third term. - Global investors are losing faith in China’s ability to [navigate]( an increasingly complex maze of challenges. Explainers you can use - [Why Pakistan’s Leader Is Facing the Risk of Ouster]( - [The Global Task Force That’s Going After Dirty Money]( - [World’s Biggest Air-Conditioner Maker Braces for a Hotter World]( Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. Ballistic tests | The U.S. is preparing new penalties against North Korea after determining that a pair of purported satellite launches by Kim Jong Un’s regime were used to test systems for a new intercontinental ballistic [missile]( that weapons experts say could be armed with multiple warheads. The restrictions would aim to further block Pyongyang’s purchase of foreign technologies. News to Note - World powers and Iran suspended their efforts to revive the 2015 nuclear accord, reigniting a [crisis]( that’s set to roil already surging oil markets. - The U.S. Senate [passed]( a full year $1.5 trillion federal funding bill that wards off a possible government shutdown and provides for aid to respond to the war in Ukraine. - Pakistan’s military says an unarmed missile from India [violated]( its airspace this week, the latest flare-up between the two often-hostile neighbors. - Brazil’s congress passed a tax [reduction]( for fuels hours after state-controlled oil producer Petroleo Brasileiro caused a stir by raising diesel and gasoline prices by as much as 25%. And finally ... Chile’s new president, Gabriel Boric, takes office today as the country’s youngest ever, but also its [greenest](. Boric, 36, is in the vanguard of an emerging political awareness across Latin America of the impact of climate change and its relation to inequality, whether access to water or indigenous rights. As [Andrew Rosati]( and [James Attwood]( report, the nascent green wave has profound implications for a region that is a resources superpower. Ecuador’s President Guillermo Lasso signed a decree expanding the marine protected area around the Galapagos Islands by nearly 50%. Photographer: Johis Alarcon/Bloomberg Like Balance of Power? [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022