Business can make a difference

By Michael R. Czinkota, Gary Knight, Gabriele Suder

The “War on Terror” was launched 10 years ago, on Oct. 7, 2001. It represents a battle against terrorism, extremism and global geopolitical adversity seen to oppose democracy and freedom of choice.

In the intervening years, however, the war has produced various unintended consequences that threaten personal freedom and other liberties enjoyed by progressive societies worldwide.

Stringent inspections delay cargo and personnel at border crossings. In many cities, cameras constantly monitor the movement of vehicles and civilians alike.

Government wiretapping and surveillance procedures have been expanded. Bank transactions are scrutinized as never before. Airport security measures are annoying and sometimes even humiliating. In many ways, such intrusions represent a victory for terrorists.

An early casualty of the War on Terror was Afghanistan. During much of the time since October 2001,

Afghans have seen little improvement in their lives and business conditions.

Ten years on, Foreign Policy labels Afghanistan a “failed state,” especially regarding security, refugees, and legitimacy of the state. As the United States prepares an acceptable exit strategy, Afghanistan faces much risk and uncertainty.

Divided by religious and political strife, the country’s per-capita income remains among the lowest worldwide. Adult literacy is below 28 percent and infant mortality is high. Following 30 years of war, Afghanistan’s social, institutional, and commercial infrastructures are in a decrepit state.

The World Bank and World Trade Organization (WTO) have pointed to constraints that discourage corporate investment in Afghanistan: crime and disorder, inadequate energy and transport systems, and insufficient access to finance.

However, experts also suggest that, with appropriate local knowledge and collaborative efforts, companies can succeed in Afghanistan.

Success requires investments in education and training, creation of networks and infrastructure, and open-mindedness and flexibility toward the unexpected. Firms with significant experience in troubled regions are most likely to succeed.

Recent changes in Afghanistan have produced significant potential opportunities for early investors, especially in infrastructure development. The World Bank views Afghanistan as a prospective hub for regional trade.

The WTO points to significant improvements in the categories of “getting credit” and “registering property.” Thanks to a modern secured transactions law that helps companies obtain loans, Afghanistan is now well ranked for “starting a business.”

Afghanistan’s economy is improving, especially in agriculture, commodities, and traditional industries. The nation is home to a wealth of natural resources, including natural gas, petroleum, and certain key minerals. It has benefited from billions of dollars of international aid and investments. In many ways, Afghanistan is typical of troubled regions around the world.

Experience with Afghanistan and the War on Terror has provided important lessons for Western governments and businesses alike. Companies now include terrorism as an important factor in their international planning.

Firms are devising international strategies that emphasize flexibility and the ability to change course quickly, with less dependence on vulnerable physical facilities.

Foresight and skillful management reduce the risk of loss and downtime. Companies are putting more emphasis on developing closer relations with governments and other key players in uncertain foreign markets.

Since the launch of the War on Terror, many world regions have experienced attacks and conflict. But companies are fighting back. Experienced managers are vigilant and favor approaches that ensure long-term, sustainable success.

Simultaneously, governments are learning to strike the right balance between security and unneeded intrusions in business and our personal lives.

Educators like us have an important role to play. Alongside managers and public authorities, we share a responsibility to redefine global commerce.

Increasingly, business must emphasize attitudes and behaviors that are not just ethical, but also socially responsible, compassionate, and focused on the long-term stability of nations worldwide.

Perhaps the best hope for a brighter future in troubled regions is business that, in addition to expanding profits, meets the social and economic needs of local stakeholders.

The struggle against terror, extremism and adversity is a long-term effort. The costs in human and financial terms are extremely important.

But hope remains eternal. Responsible, collaborative business can go far toward improving the social, political and economic landscape worldwide.

The global business community has both the capacity and responsibility to protect against the terrorist threat and to support development of a more sustainable, peaceful world.

Michael Czinkota teaches international business at Georgetown University’s McDonough School of Business and at the University of Birmingham in the U.K. He is a former deputy assistant secretary at the U.S. Department of Commerce. Gary Knight is a professor and expert on international business at Florida State University. Gabriele Suder holds the Jean Monnet Chair at SKEMA Business School in France, China and the U.S. and is a visiting fellow at ANU’s Center for European Studies.