Australian-American journalist living in Washington DC. Independent Media InstituteHe is a contributing editor to Strategic Policy magazine and a contributor to other foreign affairs publications. His publications include: Budget Superpower: Russia takes on the West with an economy smaller than Texaswas published in December 2022. An economy for alla project of the Independent Media Institute.
Shortly after the October 2023 war between Israel and Hamas broke out and began causing widespread destruction in the Gaza Strip, McDonald’s executives in Chicago found themselves unwittingly drawn into the conflict. Local owners of McDonald’s restaurants are given a great deal of autonomy over profits and operations, leading franchisees to choose sides. In a social media post from McDonald’s in Israel, Free meals for Israeli soldiersCause McDonald’s franchise Countries across the Middle East have come together to pledge millions of dollars to help Palestinians in the Gaza Strip.
McDonald’s has since tried to stay afloat by minimizing comments about its franchisees. In April 2024, McDonald’s Corporation Buy back 225 of its restaurants The deal, which is expected to close in the coming months, will see McDonald’s acquire Israel from Alonyar Limited, which operates McDonald’s in Israel, for an undisclosed sum. Reversing the decline The incident had a negative impact on sales and stock prices in the region.
The case illustrates how multinational corporations, with their global reach and decentralized operations, can quickly incite opposing sides in a conflict. While McDonald’s top executives did not intend to support Israel or Palestine, profit-driven strategies can lead companies to support multiple sides in a conflict, and often in more meaningful ways. During the 1980-1988 Iran-Iraq war, Western arms manufacturers Directly or indirectly Taking advantage of changes in Western government support for Iraq and Iran, supplying them with weapons Throughout the conflict.
However, as globalization increases and the U.S.-led world order comes under strain, multinational corporations are expanding their international operations and are challenged to maintain business relationships with both the United States and countries hostile to U.S. interests. Moreover, these corporations are increasingly becoming embroiled in fueling opposing sides in civil conflicts in other countries, directly or indirectly, in ways that could prolong or intensify violence.
The Ukraine war revealed that multinational companies are increasingly unwilling to fully follow directions from any government, including the United States, when they conflict with their own economic interests. Despite Russia’s annexation of Crimea in 2014 and instigation of a proxy war in Ukraine’s Donbas region, many Western companies continued to operate in both countries, providing the Russian government with tax revenue, technical expertise, products, and employee knowledge, mitigating Moscow’s war-support efforts. However, after Russia’s full-scale invasion of Ukraine in 2022, many Western companies faced a dilemma: withdraw from Russia and comply with sanctions, or maintain access to lucrative government contracts and a market of 145 million consumers.
However, many people left Russia due to public pressure and sanctions. Other companies remained in the country.Some countries have officially withdrawn from Russia or announced their intention to do so, due to the high cost of leaving the country. Continue operation In Russia, they have proven vital to the Kremlin’s ability to mitigate the impact of sanctions. Meanwhile, even Russia’s most important partner, China, has warned that its largest commercial drone company, DJI, is Largest Drone Provider This illustrates the powerful lure of interests for both Russia and Ukraine and how international markets allow products to flow into war zones regardless of geopolitical alliances.
Tensions between the West and China have risen in recent years, with Western companies facing pressure to sever ties. Google, IBMand Cisco Although ostensibly for domestic use, they have come under fire for aiding China in developing its security capabilities. 2019Comments by NBA officials about China’s response to the Hong Kong pro-democracy protests could have serious economic consequences for the NBA’s operations in China. It elicited a response The White House issued a statement criticizing companies for “succumbing to the lure of Chinese money and markets.”
But Beijing continues to pressure foreign companies to take positions that differ from their governments, or at least ensure neutrality, on divisive issues. Many U.S. companies Its revenues in China are already greater than its revenues at home, and it has no intention of excluding China, the world’s second largest economy and largest consumer market.
During the past few decades of neoliberal globalization, multinational corporations have historically conducted business with deference to the United States. Challenges to the US-led international order This dynamic, combined with globalized supply chains and markets, has caused many companies to rethink their positions. It appears that some multinational companies have emboldened themselves to believe they can support multiple sides in geopolitical conflicts with relative impunity, and that their products and services are more likely to reach their desired destinations and partners regardless of government mandates.
Rather than aligning themselves with Washington, companies appear increasingly willing to maintain ties with the United States while simultaneously maintaining and strengthening relationships with countries that are hostile to the U.S. This approach risks exacerbating geopolitical tensions and undermining the coherence of the U.S.-led world order, as the profit motives of multinational corporations diverge from the foreign policy objectives of the governments in which they are based.
Importantly, as globalization has progressed, multinational corporations have become increasingly involved in areas of civil war and weak governance. In some cases, they have actively exacerbated tensions by supporting rebel groups and governments. Chiquita Brands International, one of the world’s largest agricultural corporations, FARC Rebels and Right-wing paramilitary groups It was introduced in Colombia in the 1990s and 2000s to ensure operational safety.
The practice of corporations supporting multiple sides in conflicts to secure access to resources is particularly evident in Africa. In NigeriaThe US companies Shell and Chevron fund rebel groups to protect their oil and gas interests, and also provide tax and development funds to the Nigerian government. Similarly, mining companies such as Afrimex (UK) and Belgium’s Trademet fund rebel groups operating in Nigeria. Democratic Republic of the Congo (Democratic Republic of the Congo) and working with the Government of the Democratic Republic of the Congo.
Chinese mining companies also allegedly funded Nigerian militant groups Accessing mineral resources We are doing business with the Nigerian government and expanding our business within the country. In Myanmar, Variety of Chinese and Thai companies It has pursued a two-pronged approach, signing formal agreements with the junta while negotiating secretly with ethnic armed groups that control resource-rich areas.
Mining, logging and agricultural companies alsoA revolutionary taxThe New People’s Army of the Philippines (NPA) and other rebel groups, such as the Lepanto Consolidated Mining Company and Philex Mining Company, Public opposition by Philippine authoritiesMeanwhile, engineering consultancy Louis Berger Group Paid to the Taliban In Afghanistan, they work with other groups to protect supply convoys and construction projects while fulfilling U.S. military contracts.
Banks and payment processing networks also indirectly facilitate or condone the financing of designated terrorist and criminal groups. FinCEN files released in 2020 revealed that banks such as Britain’s Standard Chartered PLC: Processed millions of dollars Arab Bank has not made any payments to its clients, even though it was found guilty of knowingly transferring funds to Hamas in 2014.
The growing direct and indirect role of corporations in conflict zones, especially those where state enforcement is weak, Private Military and Security Companies These companies are often hired by other private actors to protect their investments and personnel, but they tend to manage and prolong conflicts rather than resolve them. Across Africa Notably, PMSCs exist to serve private interests as well as governments. Use of PMSCs is growing worldwide This raises concerns that multinational corporations could quickly switch their support between conflicting sides as their strategic interests shift, playing a more active role in fueling and prolonging conflicts.
Of course, governments regularly support opposing sides in conflicts – due to rival political factions, shifting interests, political expediency, economic motivations, desperation and a desire to promote destabilisation. In the Syrian civil war, Pentagon-Funded Syrian Rebels They were fighting people supported by the Central Intelligence Agency, while the Syrian government itself Paying the Islamic State (IS) is buying back stolen oil and natural gas, Supporting other rebel groups To fight ISIS.
However, the risk that companies will more actively support multiple sides in conflict zones and divide their territories and spheres of influence is a worrying prospect, similar to the Dutch East India Company, which ruled its territory through military force and trade monopolies. While hopes remain low that multinational companies will take a more pronounced stance in conflicts between states, there seems to be little to stop them from fomenting and prolonging domestic conflicts involving non-state actors, so long as it serves their economic interests. The conflict-making capacity of PMSCs and multinational companies operating in conflict zones is likely to continue to grow, so urgent measures are needed to strengthen their regulation and accountability.
