Sunday, October 26, 2014

Tycoons Under Tyranny - From Hong Kong to Moscow

One often imagines that the life of a tycoon, even under a totalitarian government, is a life brimming with excitement and glamour, jetting off on a moment’s notice on their amenity-laden customized private jet to close a deal, then spend lunch or dinner with friends and associates at a Michelin rated eatery overseas before returning back the same night to one of their many worldwide starquitect-designed penthouse condos. However a tycoon’s life under a totalitarian regime is, as the saying goes, “Is complicated.”

In order to operate, even exist under such a regime, a tycoon must be pro-government. It’s the government that guarantees them sole source lucrative, contracts and shelters them from mutual enemies. It’s a Faustian bargain in which the government secures the tycoon’s silence to their brutal practices of pacifying the population in order to loot the country’s riches. Despite their billions, non-conformance to government policies can result in imprisonment, even execution. The government controls the security apparatus and broadly ‘interprets’ or breaks the law of the land with impunity.

On the street the citizens decry the tycoon’s silence on discriminatory economic and humanitarian matters. The citizens can’t materially harm him because he manages the monopolistic industries that manufacture and provide the basic goods and services that the citizens need. As a result only the tycoon’s public image takes a hit, not their bottom line.

As a result a tycoon is caught in the middle.  He’s nothing more than a wealthy pawn of the government who can easily replace him on a whim with the preferred next choice. The government conveniently uses a tycoon as a front to implement unpopular economic policies. And should the citizenry violently oppose these policies, government media-run propaganda can placate the citizenry by using the tycoon as a convenient scapegoat.

The most demanding role of a tycoon is to endlessly curry favor with the right governmental inner circle of power and influence. Like any large and powerful organization regardless of their political or ideological belief, these organizations operate on a particular logic. Tyrannies are not monolithic. Like any large group they’re composed of layers of various groups within and peripheral to the inner circle who are constantly jockeying for influence. Sometimes there are mini-coups in which today’s inner circle is suddenly replaced which may find the tycoon now on the outside looking in.

In a worst case scenario, his personal bank accounts can be frozen, passport confiscated and mini-empire dismantled through an arm-twisting merger at below market price for no reason whatsoever. The tycoon is nothing more a wealthy working stiff whose assets can vanish overnight. For him it’s a perpetual effort to placate the right group of the political Rubic cube and is subject to the same blackmail as corporate drones whose superiors demand unwavering exclusivity of their services and loyalty.

Through equally ruthless and brutal methods of his own, he’s made a choice to sell his soul to achieve fame and fortune. The cleverer of this breed less bound by ego, already have options to flee the country, squirrel away their assets overseas, and even purchase foreign citizenship.

This proves that tycoons have far less influence on political power and government policy that is perceived. Just because you’re a tycoon, you’re still answerable to a higher, more powerful authority. That’s why it’s the concept of becoming a dictator rather than a tycoon is much more appealing to those who crave total control. Politically power trumps money.

Copyright Indo-Brazilian Associates LLC 2014. All rights reserved.

Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.  We'll get on the "Short List".

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