American companies do business in foreign nations for simple reasons. The biggest among them have global aspirations. But the bottom line really is the bottom line: These companies see international markets as places to grow and make more money.
Things usually go wonderfully until something unexpected happens — such as when one of the world’s largest countries invents a reason to send troops into the territory of a much smaller neighbor. This happened three weeks ago when Russia invaded Ukraine.
One result of this invasion is that American companies that love to talk about global openness and bringing the world closer together suddenly are experiencing in Russia what they were able to ignore for a long time.
The Washington Post website included a story last weekend with the headline, “Putin’s move against U.S. tech giants laid groundwork for crackdown on free expression.” It relates a series of strong-arm events, such as when Russian agents went to the home of Google’s top executive in the country last year to warn her to remove an app that President Vladimir Putin disliked — or be taken to prison.
“Within hours, an app designed to help Russians register protest votes against Putin could no longer be downloaded from Google or Apple, whose main representative in Moscow faced a similarly harrowing sequence,” the Post reported. “Titans of American technology had been brought to their knees by some of the most primitive intimidation tactics in the Kremlin playbook.”
This was part of a successful campaign to squash Russian opposition to Putin. In the single saddest but understandable decision, Google and Apple last year stopped offering an app created by supporters of dissident Alexei Navalny, which sought to help voters in the country select candidates with the best chance of beating those from Putin’s party.
The Kremlin warned the companies that failure to remove the app would be considered foreign election interference. Russian leaders even called in the U.S. ambassador to make their point and sent armed officials on a raid of Google’s office in Moscow.
If the invasion of Ukraine has accomplished one thing, it has removed Putin’s mask. He can talk all he likes about commerce, but at the core he is just a former KGB agent who wants to stifle dissent, control what the population sees and hears, and put the old Soviet Union back together, when it was Russia and 13 other much smaller “republics.”
That is a battle Google, Apple, Facebook, McDonald’s, Coca-Cola and many other global companies cannot win. Business in Russia was good for many years, but the rules have been changed.
These companies deserve credit for entering a country with absolutely no tradition of openness, but now they should withdraw. Whatever profits remain in Russia simply are not worth the cost of doing business there
American companies also should keep an eye on another country where the same problem is sure to occur in the future: China.
The world’s most populous country, many times larger than Russia, China has embraced commerce while keeping a tight rein on its people. Intolerant of dissent and skilled at flexing its economic muscle, China has forced many concessions from foreign companies that want to do business there.
It does not require a fortune teller to see the future with China. At some point, maybe soon or maybe years from now, its leaders will copy Russia’s recent military adventurism. If that occurs and global opinion turns against China, as it has against Russia, Western governments and businesses will face more tough decisions.
— Jack Ryan, McComb Enterprise-Journal
