Many international companies in the technical and other sectors stop working in Russia after the invasion of Ukraine.
It is not clear how long the collective solidarity to isolate Russia will last. Just look at past crises.
In 2018, agents from Saudi Arabia murdered and dismembered Washington Post journalist Jamal Khashoggi, prompting a swift denunciation of the kingdom, which U.S. intelligence agencies felt approved the planned assassination. Some, though far from all, foreign companies and tech powerhouses withdrew from business deals with Saudi Arabia.
But within half a year or so, many international companies were back.
The situations in Saudi Arabia and Russia are very different, but both point to a problem for global companies, especially technology companies whose digital services transcend borders: should you work in countries where government behavior is unacceptable?
Many US tech executives embraced the belief that economic and cultural connections between nations, industries and citizens help prevent conflict and make everyone better off. But as my colleague Patricia Cohen wrote, the war in Russia is the latest challenge to the ideal of global commitment to keeping the peace.
Powerful companies — especially technology companies with their excessive public profiles and wealth — are increasingly pressured by their customers, employees, or elected officials to pull out of their business in order to push for change in government laws or standards about worldwide.
Global retailers are under pressure over claims they have benefited from forced labor in China’s Xinjiang area. Opponents of Texas abortion restrictions demanded that companies like Uber and Tesla take a stand against the law. Freedom of expression advocates urged Facebook and Twitter to defy the Indian government’s bans on citizens who oppose new agricultural laws.
Companies are sometimes in a position to favor principles over profit, with often uncertain opportunities for systemic change.
After Khashoggi’s assassination, some leaders in technology and other industries decided to distance themselves from Saudi Arabia.
Google and Amazon appeared to be suspending negotiations with Saudi government officials to build computer data centers. The Bill & Melinda Gates Foundation canceled a pledge to a non-profit organization headed by Crown Prince Mohammed bin Salman, the de facto ruler of the kingdom. The Hollywood agency Endeavor returned $400 million from Saudi Arabia’s investment fund.
In many cases, international companies lowered their public profile and resumed ties with Saudi Arabia when the heat subsided. There was a lot of potential money at stake.
March 11, 2022, 2:49 am ET
Responding to the Chinese government is the biggest challenge for international companies. Beijing imposed a sweeping national security law in 2020 that brought Hong Kong closer to China’s censorship and covert digital surveillance. Apple, Google, Facebook, Amazon and others responded by threatening to pull out of the city.
My colleague Paul Mozur told me that tech companies have mostly stayed in Hong Kong, in part because it seems that their worst fears – raids on the companies and arrests of employees for failing to comply with the law – are unlikely. He said the companies continued to evaluate every move or signal from the government.
Each country poses unique challenges for international companies doing business there. Russia started an unprovoked war against a neighboring country and most of the world has united behind Ukraine. The collective withdrawal of companies from Russia — either by choice or, in Facebook’s case, by being blocked by the government — is also different from their absence in long-isolated countries like Iran and North Korea.
Karen E. Young, senior fellow at the Middle East Institute, said Saudi Arabia and Russia were different in another respect. “The Saudi government and leadership understood very quickly the importance of being integrated into international markets,” she said. “Putin seems willing to throw that away.”
War Between Russia and Ukraine: Important Things to Know
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No agreement. Foreign ministers of Ukraine and Russia met in Turkey for the first time since the start of the war, and failed to stop the fighting. Foreign Minister Sergey V. Lavrov of Russia stated that a ceasefire was never in question.
Jeffrey Sonnenfeld of the Yale School of Management wrote in Fortune that what he called the “great corporate retreat” from Russia could lead to a change of leadership. He wrote that when international companies cut ties with South Africa decades ago, their actions strengthened international government sanctions and helped end the country’s apartheid regime.
Gregory Fairchild, the dean of the campus at the University of Virginia in Northern Virginia whose research has focused on business strategy and ethics, said autocratic leaders in Russia and other countries may calculate that foreign governments and corporations don’t show their distaste and punishments. will persist.
“There’s a half-life to the outrage associated with the news cycle,” said Dr. Fairchild. Many leaders “have enough evidence that we wouldn’t care for long.”
Before we go…
The Next Theranos Trial: Following the conviction of Theranos founder Elizabeth Holmes for defrauding investors in her blood test start-up, jury selection will begin Wednesday in the trial of Sunny Balwani, Holmes’ ex-boyfriend and former Deputy, on a similar series of fraud charges. My colleagues David Streitfeld and Erin Woo are reviewing Balwani’s case and professional history.
The absurdity of being online during a war: “We’re wandering around, kind of waiting to see what’s to come, and wish we could do more to stop this stuff,” a sociologist told The Atlantic. (A subscription may be required.)
The freshman who followed Elon Musk’s jet around the world now plans to track the planes and yachts of Russian billionaires, Bloomberg News reports. (A subscription may be required.) A related mystery: Does this superyacht belong to a super-connected Russian — maybe even Putin?
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You know who likes berries? Hobbes, a lesser kudu (a type of antelope) at a Cincinnati zoo.
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This post Will Russia’s isolation last? – The New York Times
was original published at “https://www.nytimes.com/2022/03/09/technology/russia-isolation.html”