Last month, I attended the World Economic Forum (WEF) in Davos, where the theme was responsive and responsible leadership. Ahead of the event itself, I implored fellow attendees to consider how best to reconnect with disillusioned voters around the world.
What I heard was encouraging, although leaders in the realms of business and politics need to move fast as the ground is shifting beneath their feet.
President Trump’s first day saw the signing of an executive order to withdraw from the negotiating process of the Trans-Pacific Partnership (TPP). More is likely to follow after the new President sent a delegation to Canada to discuss the future of the North American Free Trade Agreement (NAFTA) ahead of meeting the Mexican President next week.
Against this backdrop, business must be flexible. Operationally speaking that is responsible. Yet we must also ensure values are at the heart of our operations – values which respond to the concerns of customers, employees and other stakeholders in a human way.
My father and the Hinduja Group’s chairman, S.P Hinduja, has often said that business is built by doing right by others, so that they in turn do right by us. If we all lived and conducted our business with this principle in mind, then 2017 need not be as divisive as 2016. Our family’s business is approximately 100 years – so arguably having steadfast values does create real long-term value.
So what might happen in the coming year?
Volatile markets thanks to severe currency fluctuations. The most significant movements are likely to come against the US dollar. The stated aims and policies of the new President suggest a reflation of the dollar is inevitable. This could have a significant impact on currencies which track the dollar, those with dollar reserves and those with dollar-denominated assets. The decision to pull out of TPP and renegotiate NAFTA will likely increase index volatility across developed and emerging markets, with share prices of international companies taking a hit.
Middle East conflagration is likely to be exacerbated by renewed tensions between the US and Iran. If we take the President at his word, the deal struck by President Obama is likely to be reviewed if not scrapped altogether. I am sympathetic to concerns regarding Iran’s nuclear ambitions. But we need to consider that for every action, there will be an equal and opposing reaction. Aggression, diplomatic or military, provokes aspiring powers to focus attention and resource on their military and militarising their nuclear programmes. This in turn increases tension across borders and so the ratchet effect builds.
While progress has been made in addressing global poverty, economic concerns in donor countries and a more isolationist US may result in global poverty increasing. A withdrawal of the world’s best humanitarian instincts would threaten the Millennium Development goal of eradicating extreme hunger and poverty.
Global trade will slow, while local trade may grow. The tensions produced by last November’s US election are manifesting themselves in the world’s two largest economies, the US and China, eye-balling each other warily. This distrust is harmful not simply to societal relations but to economic relations as well. This may act as a spur to national economies as consumption shifts away from imported products.
The call of 2016 was clear. Change – any change – is welcome to the status quo. While I disagree with aspects of this sentiment, we need to find solutions to the challenges faced by our fellow citizens – solutions which are inclusive and promote inclusive economic growth.
One significant challenge to business and political leaders in 2017 will be delivering secure and rewarding employment. This will only be possible by equipping employees with 21st Century skills. This requires business to consider its values and priorities. Business should invest in its workforce perhaps by forgoing some margin. Profit is important, but if it comes at the expense of workers (who are consumers too), is it profit worth having? There is not much point being number one in your market, if the market is shrinking and your consumers lack the earning potential to afford your products.
So let us put values back at the heart of business and politics. Let us show that together we can find solutions to global problems through dialogue, cooperation and our common humanity.