The way the wind blows

Published January 18, 2021
Corporate America knows the shareholder’s interest overrides political preferences.
Corporate America knows the shareholder’s interest overrides political preferences.

The top tycoons of Pakistan find Corporate America’s support to President-elect Joe Biden and open hostility towards President Trump perfectly logical as it aligned with shareholders’ and customers’ interest in defending democracy.

Why the same wise men chose not to side with their shareholders and customer to defend democracy back in the 1980s when Gen Ziaul Haq was sowing seeds of militant extremism in Pakistan?

“What shareholders? All board seats are occupied by siblings, spouses and children. No one cared about the customers’ base till the arrival of social media. With limited choices and no easy recourse available, consumers were almost captive. Thanks to protection and collusion, companies can get away with next to anything. Nobody cared about the government and public sentiments as long profits were guaranteed?” commented a cynic.

Corporate America knows the shareholder’s interest overrides political preferences

“Bhutto broke the back of the private sector of Pakistan through nationalisation in the 1970s that was already wounded by the secession of East Pakistan. It was not the love for Zia but the hate for Bhutto that decided the positioning of this class back then,” a tycoon reasoned.

“Based on their conduct four decades back (ignoring the background), it is unfair to characterise the business community of Pakistan anti-democratic,” responded a seasoned tycoon who heads a major business empire. Discussing that period, he understated the rewards of supporting Zia and underplayed the US role in nudging the country towards a path that proved to be disastrous.

“Leave politics aside, the private sector of Pakistan is not good enough at its own game. Withdraw the government crutches and many will crumble. For me, their attitude towards competition and innovation is more troubling. The absence of competition has retarded them. They can’t be supportive of moves that threaten the status quo and expose them to market risks.”

As the world watches the Jan 6 storming of US Capitol by a violent mob and the events following the attack, the ranks of US companies ditching President Trump have multiplied. He was blocked on digital platforms and many long-term service providers announced that they’d severe commercial ties with him, his family, his supporters and his party. Till the filing of this report, 63 big US brands, including tech giants, hotels, automakers, accounting firms, retailers, textile-makers, banks, chemical giants and energy companies, have taken a clear position against President Trump. YouTube, Facebook, Twitter, Amazon, Boeing, BP, Citibank, Coca-Cola, Deloitte, Deutsche Bank, Ernst & Young, ExxonMobil, Ford Motor, General Motors, Google, Hilton, KMPG, Marriott, Mastercard, McDonald’s, Microsoft, Morgan Stanley, Nike and many others spoke publicly against Mr Trump to be counted on the right side of history.

Responding to Dawn’s query, Pakistan Business Council CEO Ehsan Malik wrote: “Corporate America is motivated by the shareholder interest which, in turn, is secured by remaining close to their customers and consumers. Even in the United States where there is tradition for the corporate sector to support parties and politicians, it is the shareholder interest that overrides political preferences.

“So it is not surprising that Corporate America, which benefitted from tax cuts and other stimuli under the Trump Administration, is now looking to safeguard its image by distancing itself from those allegedly responsible for the storming of Capitol Hill. The capital market on the other hand is hopeful for normality and stability returning in politics as well as in the management of the pandemic with vaccines and SOPs,” he added.

Prestige Communications Managing Director Jamal Mir, who is also a former president of the American Business Council (ABC), expressed his admiration for the biggest companies of the world for their commitment to democracy. He shared a detailed response with Dawn on the corporate positioning in the United States. Some extracts are reproduced below.

“Big companies have unambiguously indicated that Americans are not interested in extreme politics by either party. They are looking for smart, stable and solution-oriented governance.

“The support for President-elect Biden is based on his declaration that he stood for two things — workers who ‘built this country’ and values that can ‘bridge its divisions’. As the United States faces health and economic challenges, Mr Biden’s pitch is to create new economic opportunities, restore environment protections and healthcare rights and reboot international alliances.”

Mr Mir also noted reactions of major business bodies like the US Chamber of Commerce and Business Roundtable. “They welcomed the president-elect without waiting for Mr Trump’s acceptance of the election outcome.”

A leading light of the business community insists that the business community should be seen as a part and parcel of society. He said businesses often find government policies and actions flawed but the fear of reaction forces them to keep their opinion to themselves. Expecting a ruckus by Mr Trump’s supporters on the inauguration of Mr Biden, he said: “President Trump has created/infused a new life in white, armed rednecks not open to reason and dialogue and out to settle scores violently with anyone who dares to differ.” He hopes for peace and stability in the United States as the pandemic has already debased the world economy.

Published in Dawn, The Business and Finance Weekly, January 18th, 2021

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