Many international technology companies and other industries stop working in Russia after the invasion of Ukraine.
It is not clear how long the corporate solidarity to isolate Russia will last. Look at past crises.
In 2018, Saudi Arabian agents murdered and dismembered Washington Post journalist Jamal Khashoggi, prompting swift condemnation from the kingdom, which US intelligence agencies say approved of the planned assassination. Some, though not all, foreign companies and tech powerhouses have pulled out of trade deals with Saudi Arabia.
But in about six months, many global companies were back.
The situations in Saudi Arabia and Russia are very different, but both highlight a problem for global companies, especially tech companies whose digital services cross borders: do you have to work in countries where government behavior is unacceptable?
Many American tech leaders have embraced the belief that economic and cultural interconnections between nations, industries, and citizens help prevent conflict and improve circumstances for all. But as my colleague Patricia Cohen has written, Russia’s war is the latest challenge to the ideal of a global commitment to peacekeeping.
Powerful corporations, especially tech companies with their outsized public profiles and wealth, are increasingly under pressure from their customers, employees, or elected officials to dismantle their company in order to push for changes in laws or standards of security. governments around the world.
Global retailers have come under pressure for claiming they have profited from forced labor in the Chinese territory of Xinjiang. Opponents of abortion restrictions in Texas have demanded that businesses like Uber and Tesla take a stand against the law. Free speech supporters have urged Facebook and Twitter to defy the Indian government’s bans on citizens who oppose the new farm laws.
Companies sometimes find themselves in a position to choose principle over profit, with the often uncertain prospects for systemic change.
Following Khashoggi’s assassination, some leaders in technology and other industries decided to distance themselves from Saudi Arabia.
Google and Amazon appeared to call off negotiations with Saudi government officials to build computer data centers. Bill and Melinda Gates Foundation canceled a promise to a nonprofit organization headed by Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler. Hollywood Endeavor agency returned $400 million from the Saudi investment fund.
In many cases, international companies lowered their public profile and resumed ties with Saudi Arabia when the heat died down. There was a lot of potential money at stake.
Live Updates: Russo-Ukrainian War
- The videos show a devastating strike at the maternity hospital in Mariupol.
- Putin claimed that Russia had not sent recruits to Ukraine, but the Defense Ministry said otherwise.
- Satellite images and testimonials from Mariupol residents provide insight into a city where people are struggling to survive.
Responding to the Chinese government is the biggest challenge for global companies. Beijing imposed a sweeping national security law in 2020 that brought Hong Kong closer to Chinese censorship and covert digital surveillance. Apple, Google, Facebook, Amazon and others responded by threatening to withdraw from the city.
My colleague Paul Mozur told me that most tech companies have stayed in Hong Kong, in part because their worst fears — raids on businesses and arrests of employees for breaking the law — seem unlikely. He said that companies continue to evaluate every move or signal from the government.
Each country poses unique challenges for global companies doing business there. Russia unleashed an unprovoked war against a neighboring country, and most of the world rallied behind Ukraine. The collective withdrawal of companies from Russia — by choice or, in the case of Facebook, by government blockade — is also different from its absence in long-isolated countries like Iran and North Korea.
Karen E Young, a senior fellow at the Middle East Institute, said Saudi Arabia and Russia were different in another way. “The Saudi government and the Saudi leadership very quickly understood the importance of being integrated into international markets” she says. “Putin seems ready to throw this overboard. »
Russo-Ukrainian war: what you need to know
Chernobyl nuclear power plant. The International Atomic Energy Agency said the old power plant had been cut off from electricity, although there was no need for an immediate alarm. A power outage could affect the facility’s ability to keep the water that cools the radioactive materials circulating and create safety concerns.
Jeffrey Sonnenfeld of the Yale School of Management written in fortune that what he called Russia’s “great trade retreat” could lead to a change of direction. He wrote that when international companies severed ties with South Africa decades ago, their actions amplified international government sanctions and helped end the country’s apartheid regime.
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