by Andrew Wilson
Democratic values are being challenged more strongly today than at any time since the end of the Cold War. A number of countries that were making strides towards democracy have reversed course, while authoritarian regimes have become more deeply entrenched. Even within the European Union, some national leaders have publicly announced their doubts about liberal democracy.
This battle for democratic values is also a battle for business values. The concepts that underpin a free society are fundamental to free markets, too: values like transparency, open competition, and the rule of law. And these values and their local champions are coming under attack from the same authoritarians.
Authoritarians understand that a vibrant and inclusive private sector, where small businesses and entrepreneurs thrive, is a threat to their power. Putting the key levers of the economy into the hands of state bureaucrats and regime-connected crony capitalists helps them dominate society – a pattern we have seen in country after country, from Ben Ali’s Tunisia to Chavez’s Venezuela to Putin’s Russia. That’s why authoritarian leaders stamp out independent business voices just as assiduously as they suppress opposition parties, media outlets, human rights groups, and trade unions.
In Venezuela, Chavismo’s decades-long vilification of the private sector extended to the organizations that represent a private sector point of view – chambers of commerce, business associations, and economic think tanks. This oppression continues today under the government of President Nicolas Maduro. With private industry forced to its knees by expropriation, oil prices at a historic low, and Venezuelans suffering crippling shortages of food and basic consumer goods, Chavistas still attempt to blame the private sector, which has few voices left to defend it.
In Russia, Putin’s consolidation of power has included a clampdown on transparency about just who owns what and what the government is actually up to. Cloaking corruption allows unsavory bureaucrats to seize successful private ventures in a local practice euphemistically known as “raiding.” Last year a bill drafted by the FSB (successor to the KGB) was put forward to restrict citizens’ access to the official land registry – making it virtually impossible for journalists and watchdogs like anti-corruption crusader Aleksei Navalny to uncover the real estate holdings of state officials and corporations. These moves have helped to prop up the regime by allowing kleptocrats to hide their ill-gotten assets in the private sector.
In Iran, victories by moderate and reformist candidates in February’s elections have led to hopes for more democratic reforms. But hardliners have been fighting back, and the private sector has become one of their key battlegrounds. Soon after the nuclear agreement was signed in 2015, opening the door to billions of dollars in new trade and investment as sanctions are lifted, the security services began arresting and threatening business executives for encroaching on the hardliners’ economic empire of Revolutionary Guards-controlled companies, lucrative government contracts, and religious foundations.
The U.S. government rightly understands that America’s dealings with the world must be rooted in our own democratic values, and that we should support those who share our values wherever possible. We must also understand the key links between democracy and markets. Transparent and effective governance spurs innovation and growth, while a vibrant private sector creates channels of influence that demand better democracy and accountability.
The McCain Institute for International Leadership recently sent an open letter to each of the 2016 U.S. presidential candidates, recognizing the authoritarian pushback underway and urging the candidates to support democracy and human rights as a central part of their foreign policy platforms. The letter was signed by representatives from all of the major democracy and human rights groups, including the four core institutes of the National Endowment for Democracy, and my organization, the Center for International Private Enterprise.
Whoever becomes the next president will need to work with Congress and the democracy community to lessen the influence of authoritarians and promote values that protect American interests. Fundamental to these strategies is a private sector that can play its role as the engine of free markets and opportunity. When the private sector is prevented from playing this role, democracy falters.
Organizations and institutions that advocate for democratic values around the world need to also focus on supporting private sector voices, such as business associations, chambers of commerce, and economic think tanks that serve as the interface between market values and democratic institutions. Like human rights NGOs and a free media, these groups are fundamental building blocks of democracy and should be defended just as assiduously when they are attacked.
Andrew Wilson is the Acting Director of the Center for International Private Enterprise (CIPE), which strengthens democracy around the globe through private enterprise and market-oriented reform. CIPE is an affiliate of the U.S. Chamber of Commerce and core institute of the National Endowment for Democracy