Business and shaping the business of government

History not having ended, somewhere out there is a perfect equilibrium of state-business-civic relationships and roles, catalysing and manifesting an ideal form of sustainable, inclusive development.

Over dinners here in Oxford I envy science-nerd friends whose research seeks (and often finds) pathways, combinations, formulas to unlock or unblock cells or substances in ways that might dramatically improve life and health. Policy and political economy hold less tangible rewards. I console myself by saying that perhaps we policy folk have a similar vocation: finding judicious and productive formulas of governance and collaboration, to unblock whatever constrains, corrupts or conspires against better social, regulatory and growth models: ideal cooperative forms mapped to suit the unique DNA of particular societies, sectors or supply-chains. 

This week's post reflects on aspects of the just-published special report on 'Companies and the State' in The Economist of 22 February.

First, the lead article states that relations between business and government are becoming "increasingly antagonistic". That may be true in richer OECD countries (on which the report focuses). However, in contrast to any trend of antagonism, arguably in development policy circles and among leading multinationals there exists increasing pragmatism, mutual outreach and cooperation in pursuit of shared objectives (see for example this previous post).

Yet there is a long way to go in convincing policymakers and executives of the propriety and utility, respectively, of looking for appropriate, productive ways to harness the private sector's strengths in pursuit of greater public goods. This post on the lack of meat to back up recent rhetoric on cooperating with business makes the point, as does last week's post on policymakers' mindsets towards a business role in public health provision. In this sense, the Economist is right to conclude its report by saying that governments and business alike "should acknowledge the fact that they are partners not enemies".

Second, the report dwells on shortcomings of taxation strategies. In poorer countries, development policy will increasingly focus on taxation issues both in terms of financing development (governments) and as a strategy to foster more responsive government (donors). See here.

Third, the report calls (as that newspaper is wont to do) for less complex and convoluted regulation in order to stimulate productivity. This post argued that in stimulating business' capacity for virtue on social, enviro and governance issues in settings with low-capacity regulators, regulation that is based on broad principles rather than detailed codes may be preferable.  

Finally, the report considers the sometimes pervasive influence on government of corporate or sector lobbying. In many mid-income or developing settings, the same imbalances exist: parts of the business community either have too much access to government or too little. One challenge in feeling the way towards the ideal sustainable development equilibrium is to institutionalise effective, inclusive, responsive feedback loops between the public and private sectors, so that 'lobbying' is not a dirty word but a transparent, regulated part of the business of governing.

This is surely because in the social science of responsible business and responsive government, the microscope reveals that from cellular to system-level, the vital, fragile, organic and mysterious substance is trust: see here.

Jo

The Economist report is here.

Mobiles, media, and mass messaging in African politics

Within wider debates on the private sector's role in providing, protecting or respecting public goods such as safety and security, non-state media can have special responsibilities.

 

Last week I began preparing notes for a part in the EU Eurojust programme's network on genocide, crimes against humanity and war crimes, whose next meeting will consider the jurisprudence and practicalities around the potential liability of business entities and owners for complicity in, contribution to, or commission of the most grave international crimes.

 

Most attention focuses on classic scenarios such as a firm that provides lethal gas used in a death camp (IG Farben company's Zyklon-B gas in Nazi Germany). Colonial and post-colonial Africa yield some examples albeit ones that mainly have a less obvious chain of causation or imputed intention to profit from crimes against humanity.

 

The role of the media and telecoms sectors is less often considered, although a notable African exception is the role of a privately-owned local radio station in broadcasting hate-speech and incitement in Rwanda in the lead-up to that country's 1994 genocide. More recently, this year's Kenya elections witnessed a wave of efforts to prevent a repeat of the inflammatory private broadcasts and publications that occurred around the 2007-8 election-related serious ethnic violence. Across West Africa in the last decade, a flowering of non-state newspapers and talk-back radio has fuelled greater free political communication but has also witnessed private media houses acting as platforms for ethnic baiting and stereotyping of a sort that can have very serious consequences.

 

Such situations call for state regulation of private media self-regulation to constrain the production of harmful content well before it constitutes or contributes to the sort of conduct that raises the interest of prosecutors in The Hague. The inherent limits on freedom of expression and the normative weight of prohibitions on incitement to grave crimes mean that such situations raise merely obvious duties -- and not really any dilemmas -- for private media or telecoms outfits (although on-line self-publication raises particular challenges for internet service provider firms).

 

A somewhat different situation for media and telecoms firms around Africa involves not mass crimes or their precursors but the many ways in which commercial provision of communications services comes head to head with electoral or protest politics, mundane or menacing. It is where the pressure for self-censorship or altered operations comes from the state bureaucracy in a context where democratic principles and public order are both potentially directly at stake.

 

It is one thing if a valid law requires, for example, that in the interests of public order a private mobile phone service provider not enable political parties to send mass multi-recipient text (SMS) messages around election time. The issue becomes whether that law is reasonable and of general, impartial application. If not (for instance, if used by the state to suppress the voice of its political opposition or to monitor its communications), the telecoms company may need to make difficult calculations, including balancing its relationship with the government with its reputation or its principals' own principles.

 

In many cases, there may be no formal regulatory basis for state officials to request phone, media or social media firms to constrain their output or their customers' usage. Instead, implicit in such requests is a threat, for instance of non-renewal of broadcast or service provider licences in future. Where politics and business intersect in hard cases, it is far easier for armchair commentators to counsel firms to take a path of principled pragmatism than to have to actually walk it.

 

This week sees controversial elections in Zimbabwe to end the 2008-9 power-sharing arrangement. Homegrown independent mobile phone firm Econet has come under considerable pressure to agree to block mass SMS-sending by organisational users. Ostensibly, the request is premised on a need to preserve public order (Kenya took similar steps ahead of its 2013 election). Some argue that the net effect in the Zimbabwe / Econet case will be to favour one party over another. The firm has reportedly and perhaps understandably obliged.

 

Indeed, these Zimbabwe elections are showcasing more generally the evolving role of mobile and internet (and mobile internet) technologies in African electoral politics -- even if the vast majority of voters across the continent still appear to rely on radio for the bulk of their political self-education.

 

In addition to traditional media (a new private independent TV station recently began broadcasting into Zimbabwe from South Africa, via satellite), the country is experiencing new phenomena such as the 'Baba Jukwa' Facebook character who purports to disclose, from within the ruling party, its many intrigues; Google Africa has launched a one-stop Zimbabwe election hub site collating news and other stories; website votewatch263.org is attempting to mimic Kenyan 'crowdsourcing' experiences by providing a space for individuals to report issues related to the conduct of campaigning and voting; the Econet SMS measure is a first for the country even if state monitoring of communications there is not.

 

Democratic aspirations and political competition will continue to stimulate innovation in the use of mobile and internet technologies across the continent -- sometimes the innovation will come from pro-democracy groups, and sometimes from incumbent regimes (or indeed rebel or other armed groups who in Africa have taken a strong liking to platforms like Twitter).

 

By choice or circumstance, private sector providers will put or find themselves at the heart of this trend.

 

Jo

 

The politics of business: 'crazy for good'

Politics, as they say, is a tricky business.

For companies this makes the politics of doing business in tricky places ... particularly tricky.

This is so even (or perhaps, in complex settings, especially ...) where a firm is trying to promote public good-spiritedness and aspirational values, typically in pursuit of its strategy for market position or building reputation / mitigating reputational risk.

Last week in Zimbabwe, Coca Cola found that its new can of Coke opened something of a small can of worms -- highlighting how even firms which adopt a studied neutrality on domestic politics can unwittingly find themselves forced to say where they stand on tense, changing local political issues, and in hard cases to make or avoid value-ridden judgments about which side of history they [may be perceived to] stand on.

The Zimbabwe issue arose as an incidental part of Coca Cola's global marketing / social awareness campaign 'Crazy for Good'. One feature of this is an adaptation of the standard red Coke can, altered to show open hands -- waving, reaching out to each other.

The problem (if it is one) is that in Zimbabwe, red is the colour of the Movement for Democratic Change (MDC-T); an open-palmed hand has long been its distinctive party symbol.

By contrast, its rival (Robert Mugabe's ZANU-PF party) is typically associated with the clenched fist gesture so often used by its long-time leader.

The 'Crazy for Good' / 'Open Friendship' campaign and its new Coke can happened to coincide with the lead-up to probable 2013 elections given that the mandate for Zimbabwe's dysfunctional post-2008 ZANU-MDC power-sharing government expires at the end of next month. Some over-sensitive ZANU politicians accused Coca Cola of blatantly aligning its brand with the MDC -- just in time for electioneering. The brand I suppose is typically associated, through the company's efforts over decades, with fun, freedom and friendship.

Coca Cola of course can easily refute the suggestion, pointing out that its brand colour has been red for decades and that this is a global campaign. (In a post-Arab Spring world in places with restless politicised youth one wonders how threatening some of the world's more paranoid and less secure leaders might find any new version of Pepsi's long-running mantra with its emphasis on a 'New Generation... !').

Anyway, the incident neatly raises the dilemmas that brand-sensitive firms can face in juggling neutrality on political issues (on the one hand ...) with their desire to align their brand with aspirational sentiments or universal values (on the other hand ...).

This dilemma is a subset of the wider difficulties global firms have in navigating local political turbulence, and often the strategic decision of whether to abandon pretence at neutrality, subtly re-align oneself for alternative possible futures, or hope that one's firm is not found exposed at the intersection of politics and business.

Coca Cola's recent full-page newspaper advert in nearby Swaziland raised some controversy -- it wished happy official birthday to the king of Africa's last absolute monarchy, which has strongly suppressed alternative political expression (even if the royal family as an institution retains considerable popular loyalty especially in rural areas).

Then there's a firm like South Africa's Nando's which took a different tack: one advert openly mocked Mugabe, resulting in threats to its staff in neighbouring Zimbabwe -- it withdrew the adverts, perhaps having calculated that Youtube hits would continue soaring and that the kudos in the SA market was worth whatever happened in the much smaller Zimbabwe one.

Close political ties can be handy, but also be a handicap ... That is, these issues are obviously especially acute in places like Angola where the local business elite (whose cooperation may, as there, be needed for any viable corporate strategy) is for all material purposes indistinguishable from the political elite. Relations, explicit or otherwise, that make things easy or which are unavoidable in the short term might carry with them long-term liabilities (whatever their implications on foreign corrupt practices laws and the like). Operating hand-in-glove with political elites carries both near-term reassurance and longer-term risks...; yet remaining even-handed can be difficult where one's brand or operation is singled out by either the incumbent or the opposition (or activists).

Greater demand for electoral democracy in sub-Saharan Africa means that firms which in the old days needed only to appease the incumbent may need to consider, for example, the risk that a change of administration might make them vulnerable where they are perceived to have 'taken sides'. Firms that have already sunk a lot of capital into a country or which hope to be there for a long time to come will need to strategise around the prospects of change and of the implications (there and abroad) of enforced lack-of-change.

Sometimes the risks are in plain sight; sometimes they are foreseeable even if unlikely; sometimes they take firms by surprise. In some cases, mere presence in a controversial country represents a value-based decision by reference to democratic or human rights norms -- or is seen that way.

In many cases, the firm's licence-to-operate and brand will emerge intact, perhaps only with a rap on the knuckles; most will be able to make a good fist of staying well away from political controversy. Firms that are newly entering have one set of dilemmas, but those with existing investments tied up in a country to some extent have one hand tied behind their backs in terms of backing down in the face of politicised counter-campaigns. The main consideration for brands with global exposure is an awareness of the importance of consistency across markets on value-based issues: the left hand needs to know what the right hand is doing.

Policy choices impacting the business environment can be highly political -- raising the question for business of when and how to explicitly join national conversations about such issues. In considering the role for socio-political leadership by business, this blog has referred for example to the dilemma individual firms face in South Africa in putting their heads 'above the parapet' rather than remaining silent. Speaking under the umbrella of a business chamber mitigates that risk. Note that this last week apparently saw a Guatemala business group criticising the genocide conviction of a former head of state: now that takes 'private' business engagement on public interest issues to a whole different level!

Jo

See the South Africa version of the Coca Cola 'Crazy for Good' campaign -- here.

See one (note -- mainly anti-ZANU) news story of the Zimbabwe-Coke story -- here.

See my earlier post on the Swaziland-Coke story -- here.

See the Nando's advert about Mugabe -- here.

See discussion in an earlier post of Coca Cola's entry into Myanmar -- here.

See discussion in an earlier post of (limited) reputational risk from mere country presence -- here.