Operating in Violent Areas

Yes, I think companies should feel free to do business all over the world, as long as they keep to the local law and regulations. Companies are the ones with the money, if all the companies stay away from violent countries or areas, then the local people will never have a better life. Unless the violent stops, but in most countries the violence will go on for many years (like Rwanda). There are a lot of companies which are making big money in violent areas. The most money is made in sectors like intelligence gathering, investigations in local companies and security.

And a lot of constructing companies are making big money in Iran and Afghanistan, that is logical because a great deal of western governments are investing a lot of money in rebuilding those countries. Even the mining industry are booming in those countries, because bigger companies want to buy out. Some economists are saying that taking risk in violent countries can bring you from the second place to the market leading position. So for those companies it is worth taking the risk. As the writer of the ‘Point Yes’ (from the handout) said: ‘Some industry don’t have the luxury of avoiding the violent countries, take the petroleum industry’.

If you take a look at the world most dangerous countries you see that Iraq and Colombia are both in the top 10. But they are rich of oil. So companies as Shell and BP will going to invest there, even putting the risk of the employees at risk. Companies are responsible for their employees, if they want to send current workers to those violent areas, they should inform them about the situations and risks. Of course there are limits because your employees are not militaries, so where the fight is at the highest point (like the beginning of the invasion of the middle east), you should not place your factory in the middle of the two fronts.

In my opinion the writer of ‘Point No’ is using the reason ‘The people who are willing to work there, are not ideal for working’, because he is afraid that his company won’t be making profit there. I think as soon as a company is noticing a way to make a lot of profit without breaking any regulations it will invest. Let’s take Iraq for example, the need for private security is very high, so security companies can make a lot of money there. The only risk is that most of the people haven’t got that much experience in working in high risk countries. So having trained experience is good for your company.

Your employees will be saver and can handle the mental pressure. Another way is to train local people, who are used to the situation, for your company. But local people can also be a problem, let’s take a look at Somalia because the warlords are chancing all the time, it is very hard to do business there. Every warlord has its own rules and regulations, in some cases they just make up the rules because that suits them better. When that occurs your company has a problem. But most of the time they want ‘protection’ money for your employees. So a form of blackmailing.

But many companies have a ‘escape plan’, as soon as the political situation changes the wrong way, they pack their bags and jump on the plain. But if a company doesn’t want to take that much risk, they should analyse their options. Follow local news and polls or they can ask the help of commercial risk-assessment services, they can be of great value. Not only fire-arms can be dangerous for companies, even though it is threat, so is the economic condition of a country. If you want to invest in a country but the economy is collapsing (like the Greek did), than I would not go there, unless you work for example in the oil industry.

Because even if the local people can’t afford it anymore, you can always export it to your own country. It is the same if you are already located there. My opinion, companies should operate in risky countries if they have a feeling of creating benefits from it, as long as the employees are not forced to go there. But they should always take in to account that a lot of violent countries are not stable, so make sure you are prepared for when something bad happens. To make sure you won’t go bankrupted it is wise to spread your risk by not only depending on that one country.