Tuesday, October 12, 2004

Global Jihad: Jihad and multinationals

[September 11 provided a big stimulus to particular representations of the Islamic world. Western intellectuals like Samuel Huntington had already characterized the Islamic people as a separate "civilization" openly hostile towards the West. After 9/11, the media constructed Muslim people within Huntington's framework.Unfortunately for western businesses, the answers, in the medium to long-term, are not encouraging. The so-called war against terror that western governments are at present waging is likely to lead to further antagonism towards the West in Islamic markets, which, sooner or later, is likely to affect western businesses too.]

Jihad and multinationals

By Kamal Munir

With the rise of Islamic militancy and an increasing antagonism towards the West in many Islamic countries, questions about the future of western businesses there have assumed immense significance in western corporate circles.

Recent American incursions into Afghanistan and Iraq, and the further alienation that these policies have caused between the West and the Islamic people have only exacerbated the anxiety of global executives.

Business leaders, many of them representing corporations larger than many countries, are struggling to reconcile competing perspectives on where the Islamic world is going to go in the coming years.

On the one hand, liberalizing economies constitute profitable markets. The extremely lucrative incentives that various Third World governments are offering them for investment are also enticing.

On the other, they can feel increasing hostility, and are, therefore, reluctant to increase their investments unless the deal involves little or no exposure combined with captured rents. They want to know how pervasive and long term this hostility is, what its sources are, and above all, what to do about it.

Unfortunately for western businesses, the answers, in the medium to long-term, are not encouraging. The so-called war against terror that western governments are at present waging is likely to lead to further antagonism towards the West in Islamic markets, which, sooner or later, is likely to affect western businesses too.

Secondly, the income inequality engendered by unbridled globalization, the very process of which these businesses are a part, is also likely to further fuel the sense of deprivation that serves as an important basis for the rise of militancy.

September 11 provided a big stimulus to particular representations of the Islamic world. Western intellectuals like Samuel Huntington had already characterized the Islamic people as a separate "civilization" openly hostile towards the West. After 9/11, the media constructed Muslim people within Huntington's framework.

In the name of educating the West about Islam, the peoples of Islamic countries were represented as a coherent, ideologically motivated monolithic mass, who were anti-enlightenment. September 11 was seen as proof of the extreme tendencies that pervaded this group of people.

The extremism that these people represented was portrayed as the most regressive force in the world, impeding the progress of globalization and the spreading of western concepts of gender-equality and individual rights to these societies.

Indeed, within the West, this characterization has become so entrenched that Islamophobia has assumed a remarkable legitimacy in society. As Jeremy Sea brook recently described in the Guardian, this is the only form of prejudice to which the middle class in the UK can readily admit.

The internalization within the western people of such a discourse serves to make the actions of their leaders towards the Islamic countries more palatable to them. The Islamic people, within this discourse constitute the enemy. And at least in the short-run, the enemy must be weakened.

This particular idea has become a strong theme within American foreign policy. The following excerpt from a policy brief written by Anatol Lieven, a senior associate at the Carnegie Endowment for International Peace provides some idea of how this is likely to be accomplished.

Lieven writes, "Increasing Arab hostility and sympathy for anti-American terrorism make it even more important that the United States be in a position to exploit the deep differences between Iranians and Arabs and, more widely, between Shias and Sunnis."

He goes on to suggest, "Today, the United States needs to understand and profit from the deep hatred felt by Iranians (conservatives as much as liberals) for the Taliban and for Iraq".

Such tactics are obviously meant to create more instability within Islamic countries. While they will undoubtedly achieve their objective, such policies are not necessarily beneficial for long-term western corporate interests.

Astute business leaders value people in terms of their disposable income rather than skin colour, religious beliefs, or even political ideologies. It is in their interest to have larger middle-classes and aspiring consumers.

When and where they support this war, their thinking is often based on the erroneous assumption, propagated by their governments and much of the media, that the opposition to the West comes from a small pocket of extremists. If, somehow, we are able to root out these elements things will be well again.

This was noticeably reflected in the discussions that a group of business leaders held recently at Cambridge University's Judge Institute of Management. The purpose of the workshop was to try to come to a common understanding of Islamic extremism and the implications for western businesses.

Also participating in this workshop were "experts" on Islam, such as Karen Armstrong (the author of the best selling A History of God and more recently, Islam, A Short History) as well as other academics specializing in this field.

In terms of her insights and critical analysis, Karen Armstrong stands head and shoulders above most popular writers on the subject. Asked to open the workshop, she immediately launched an attack on the prevailing conceptions of extremism.

Rather than being a function of some inherent aspect of Islam or simply a desire to go to heaven, she argued, it derives from the sense of humiliation and economic deprivation that the Islamic people are facing the world over.

The resentment towards the West, she pointed out, is not restricted to a few 'jihadi' organizations but is widespread among the Islamic peoples, who see the West as a colonizing, imperialist force, out to destroy every vestige of the Islamic culture. The state of Israel, which meant that Palestinians lost their home, has become for Muslims a symbol of their impotence in the modern world.

Significantly, the resentment towards the West is a relatively new phenomenon. At the beginning of the 20th century, most leading Muslim intellectuals could be described as being in love with the West.

Some of them went to the extent of stating that the Europeans were better Muslims than they themselves, because their modern society had enabled them to create a fairer and more just distribution of wealth that was in line with the Islamic vision. However, the experience of the West - and the havoc its government wrought in the Middle East, especially Palestine, gradually destroyed all such conceptions.

The blatant support for Israeli brutality in Palestine, combined with the systematic plantation of puppet regimes in many Muslim countries and the merciless bombing of earlier allies like Iraq, has led to growing anger, which, in the absence of any other political ideology, has become embodied in Islamic fundamentalism.

While business leaders in the West intuitively sense that present US policies of winning hearts and minds through bombing is not quite working as it should, they do not necessarily realize why these policies are wrong. Nor do they necessarily realize the role of business in this phenomenon.

For the relatively naive managers, it is a question of cultural values. They believe that as long as their advertising respects obvious Muslim values and beliefs, they will be successfully received in these markets.

To this group, it is a matter of stamping out the jihadi organizations and "terrorists." In this, they perceive their interests to be in line with those of the Bush government.

However, the more experienced and far-sighted leaders realize that much of this fundamentalism is fuelled by the political acts of the West, in particular the heavy-handed treatment meted out by the Bush government to anyone who dares oppose its hegemony.

While the suppression of the opposition in some countries its may be in their short-term interests, in the long-term these policies are likely to backfire spectacularly. Hegemony is denying others a right to exist. It is an extremist step and begets extremism.

Sadly for these people, even if a business were to adopt the so-called ethical practices, in accordance with local culture and values, the problem of antagonism would not be solved. Given the tremendous disparity between partners, free trade is likely to result in further increasing the weaknesses of the poorer country's economy.

This, combined with the wholesale privatization advice that the multilateral agencies are forcing down the throats of these countries, is likely to leave a large part of their population exposed to destitution. These people will turn to religious ideologies (in the absence of any other) and sooner or later vent their anger on the faces of globalization: the multinational corporations.

In the short term, there are signs that like politics, markets could also come to be divided along ideological lines. While Mecca Cola and other such brands, capitalizing on the anti-imperialist sentiment have effectively failed in the market, the idea has been introduced, and lives on.

We could very well see multinationals introducing their own "Islamic" brand of products, much as Islamic finance products have been introduced or, to silence anti-globalization protesters, "fair trade" labels have been put on products.

In the longer term, the anger is likely to boil over, and become organized around the increasingly transparent relationship between deprivation, humiliation and unbridled globalization. And for the first time, religious groups are beginning to participate and provide a platform for such an organization. Indeed, while the anti-globalization protesters appear to be largely secular in the West, religious ideology provides the umbrella under which anti-globalization slogans are being raised in the developing countries such as Pakistan.

Recently, we have seen signs of the religious and the non-religious coming together in the UK, as evident in the alliance between the British Muslim Association and the Socialist Workers Party.

It should soon become clear to most western business leaders that while forcibly occupying countries like Iraq will benefit a few companies, and even fewer countries, the repercussions will be faced by all.

The spectre of Islamic fundamentalism will haunt multinationals in the host countries as well as at home. The problem is not the birth of jihadi groups who refuse to see logic, but the birth of a situation where their stance, however confused and self-contradictory, has suddenly assumed an anti-imperialist tone, resonating with the everyday experience of the masses.

The problem is economic as well as political. It is economic because globalization, in its current form, restricts the development of poor countries, and is widening the economic chasm at all levels. It is political because this economics requires an end to national sovereignty.

Globalization and sovereignty do not seem to go together. But sovereignty is a double-edged sword. On the one hand it defends the national operators against global operators and on the other it provides a mechanism whereby national resentment is confined to national governments.

The choice for the business is between short-term gains or long-term sustainability. For the competing business firms it is not possible to choose long term over short term.

Only political regulators can do that. The role of the business is to realize the importance of the long-term sustainability and pressurize the regulators for such policy regimes.

The author teaches strategy and policy at the University of Cambridge, UK.

Dawn 11/10/2004