Will Russia's isolation last? - The New York Times

Many international companies in technology and other industries are work stoppage in Russia after the invasion of Ukraine. It is uncle...


Many international companies in technology and other industries are work stoppage in Russia after the invasion of Ukraine.

It is unclear how long the corporate solidarity to isolate Russia will last. Look at past crises.

In 2018agents from Saudi Arabia murdered and dismembered Washington Post journalist Jamal Khashoggi, leading to swift condemnation of the kingdom, which US intelligence agencies uncovered approved the assassination plan. Some, though far from all, foreign companies and tech powerhouses have pulled out of trade deals with Saudi Arabia.

But in about six months, many global companies we are back.

The situations in Saudi Arabia and Russia are very different, but both highlight an issue for global companies, especially tech companies whose digital services transcend borders: do you have to work in countries where the government’s 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 everyone’s circumstances. But like my colleague Patricia Cohen wroteRussia’s war is the latest challenge to the ideal of global commitment to peacekeeping.

Powerful companies – especially tech companies with their outsized public profiles and wealth – are increasingly under pressure from their customers, employees or elected officials to withdraw their business to lobby for changes to laws or government standards around the world.

Global retailers have come under pressure following allegations that they benefited from forced labor in the Chinese territory of Xinjiang. Opponents of abortion restrictions in Texas have demanded that companies like Uber and You’re here take a stand against the law. Free speech supporters have urged Facebook and Twitter to challenge the Indian governmentprohibits citizens from opposing new farm laws.

Companies sometimes find themselves in a position to choose principles over profits, with often uncertain chances for systemic change.

After Khashoggi’s murder, some leaders in technology and other industries decided to distance themselves from Saudi Arabia.

Google and Amazon appeared to suspend negotiations with Saudi government officials to build computer data centers. The Bill & Melinda Gates Foundation canceled a promise to a non-profit organization headed by Crown Prince Mohammed bin Salman, the de facto ruler of the kingdom. Hollywood agency Endeavor donated $400 million of the Saudi 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.

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 secret digital surveillance. Apple, Google, Facebook, Amazon and others responded with threatens to withdraw from the city.

My colleague Paul Mazur told me that tech companies have mostly stayed in Hong Kong, in part because it seems their worst fears — raids on businesses and arrests of employees for breaking the law — are not likely. He said companies continue to assess every move or signal from the government.

Each country poses unique challenges to global companies doing business there. Russia unleashed an unprovoked war on a neighboring country, and most of the world united behind Ukraine. The collective withdrawal of companies from Russia — by choice or, in the case of Facebook, by being blocked by the government — is also different from their 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 understood very quickly the importance of being integrated into international markets,” she said. “Putin seems ready to throw that away.”

Jeffrey Sonnenfeld from the Yale School of Management written in Fortune that what he called Russia’s “great business 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.

Gregory Fairchildthe dean of the University of Virginia’s Northern Virginia campus, whose research has focused on corporate strategy and ethics, said autocratic leaders in Russia and other countries might calculate that governments and foreign companies will not support their repulsion and punishment.

“There’s a half-life to outrage tied to the news cycle,” Dr Fairchild said. Many leaders “have enough evidence that we wouldn’t care for long.”

Further reading:


  • The next Theranos trial: Following the conviction of Theranos founder Elizabeth Holmes for defrauding investors in her blood-testing startup, jury selection is set to begin on Wednesday in the trial of Sunny Balwani, the ex-boyfriend and former deputy of Holmes, on a similar set of fraud charges. My colleagues David Streitfeld and Erin Woo preview case and Balwani’s professional history.

  • The absurdity of being online during a war: “We’re going around in circles, waiting to see what’s next, wishing we could do more to stop this stuff,” said a sociologist. said to The Atlantic. (Subscription may be required.)

  • Freshman who followed Elon Musk’s jet around the world now plans to follow the planes and yachts of Russian billionairesreports Bloomberg News. (Subscription may be required.) A related mystery: Does this superyacht belong to a super-connected Russian – maybe even Putin?

You know who likes berries? Hobbesa lesser kudu (a type of antelope) at a Cincinnati zoo.


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