In times of an unprecedented assault on democracy by totalitarian regimes, the free world needs to defend democracy more than ever. Businesses must step up and speak out in support of democracy because businesses flourish only when democracy flourishes.
Everyone, including investors and CEOs, in the free world and who cherishes democratic values like justice, the rule of law, free speech, free assembly, a free press, freedom of religion, respect for property rights and human rights of every individual, has a duty to do so because as beneficiaries of democracy, they will want their children and grandchildren to grow up in a democratic environment.
In the face of sustained and alarming challenges to democracy, the rule of law and universal human rights by totalitarian regimes like the Chinese Communist Party, whose spokespersons made outlandish claims that China is a democracy and that it is better than the U.S., the business community simply cannot afford to just acknowledge and accept this obvious propaganda and keep on kowtowing to the Communist Party and let the lie becomes the truth.
In this moment of crisis, business leaders can support democracy by what they say and what they do. For too long, they have taken democracy for granted, assumed it is someone else’s responsibility to ensure that its flame continues to burn, and that the role of businesses was to keep the head down and maximize profits. Well, it cannot be business as usual anymore because the world is now at a pivotal moment where the Chinese Communist Party is trying to upend the rules-based international order and replace democratic values with communism.
Businesses need democracy to thrive but in China, it is difficult for investors and CEOs to navigate the political minefields, where the officials are increasingly using totalitarian and repressive measures to control the business community. The cost of doing business is too high and the return on investment has diminished significantly. Therefore, it is just not economically and financially sustainable for them to continue operating and investing because the political risk is too high.
Democracy respects contractual obligations
The Chinese Communist Party cracks down on the technology sector, stifles innovation and economic growth, limits business opportunities, imposes bureaucratic red tape, erects barriers to trade and fails to enforce contractual obligations. And importantly too, the Communist Party wants to export their brand of communism with Chinese characteristics and extend their influence around the world.
As a reminder, China tore up the legally-binding 1984 Sino-British Joint Declaration that guarantees Hong Kong 50 years of autonomy, and dismissed the equally binding 2016 UNCLOS award which ruled that China’s Nine-Dash Line claim of 90 percent of the South China Sea has no merit, as “nothing more than a piece of waste paper”.
If China can blatantly disregard international treaties and country to country legal obligations, then it is perfectly reasonable to assume that the Communist Party will place no importance to commercial contracts if it suits their political purposes.
Democracy fosters prosperity
Businesses need democracy to thrive, and democracy is in turn made stronger by a thriving private sector. The democratic institutions and values including the rule of law, good governance, transparency, freedom from corruption, freedom of information, citizens’ rights to petition their leaders, etc., create a vibrant society, open exchange of ideas, collaboration, risk taking and constructive debates, which, among others, will lead to advances in science and technology.
Democracy, which is tolerance of opposing ideas, provides an environment that is conducive to innovative spirit, entrepreneurship, and to the establishment and unfettered operation of private enterprises. Democracy creates more jobs, more business opportunities, and an inclusive and sustainable economy where citizens can live in a society that delivers prosperity.
Democracy gives legitimacy to ruling party
A democratic government is viewed as legitimate because it represents the will of the people, is efficient, transparent, responsive and accountable to all citizens, through a system in which the people choose a representative government through regular, free, and fair elections.
In this way, the people have the power to participate in national decision-making and if the elected officials do not perform up to expectation, the people can vote them out of office in the next election. This is not possible in a totalitarian regime where the general secretary can even change the two-term limit as stated in the constitution so that he can rule for life.
Because it is legitimate, a democratic government will provide opportunities to all the people and not just to the elites and a select few at the pinnacles of power. And because the government is legitimate, all the people, based on merits, capabilities and drive, and not on backgrounds and which families they are born into, have the opportunity to make it in life through competition and a free economy.
Adding to the legitimacy is a free and independent media, the bedrock of democracy, which plays an important role to help the public stay informed and to hold the government accountable. Therefore, in order to reap the benefits from a strong economy, a democratically-elected and accountable government, balanced by a free media and a thriving private sector, it is crucial to stand up for democracy.
No amount of profit is worth selling out democracy
Of course, democracy – a government of the people, by the people, for the people – is not without its problems but it is capable of self-correction and self-improvement by the inherent process of democratic elections. When people and different political parties that have opposing views sit down and find ways to work together, the whole society benefits.
Relative to communism, democracy is the better way to unleash human potential, uphold human dignity, and to ensure there is a sustainable growth of the economy and a thriving private enterprise. As part of the global business community, defending democracy against assault by totalitarian regimes is the only way to protect free-market capitalism and with it the prosperity and opportunity that has changed the lives of billions of people, and will change billions more in the years to come.