Diana Marszalek 04 Oct 2019 // 4:15AM GMT
As JeffreyGroup’s head of Latin American public affairs, Argentina-based Diego Campal has spent more than 20 years counseling companies on what it takes to do business with populist governments, which have been forces across the region for more than a century. Now, with populism (which pits the people against the elite) on the rise in the US and Europe as well, corporations used to navigating more traditional regulatory paths in those regions are having to change their ways to succeed despite the rise of anti-establishment sentiment. Campal, who previously led Burson-Marsteller public affairs across the region, believes the challenge requires companies to take steps from changing their wording to engaging governments with a “positive” agenda. “The first mistake a company can make is trying to fight against them publicly,” said Campal, whose clients range from Airbus and Amazon Web Services to Intel, L’Oréal and Salesforce. An edited transcript:
Which countries are currently seeing populist movements?
These are very challenging times. We have had a wide group of populist governments in Latin America for a long time. But Mexico is different from the rest. It had a different political dynamic (with PRI) until they elected Andrés Manuel López Obrador, the first populist leader in that country. That was when we developed a paper to help businesses locally by providing insights based our experience dealing with these kind of governments. (The work) is still public affairs, but taking a much wider approach to traditional PR; the context and content and by understanding dynamics of the country. In the region in general, we have had a change in leadership. Argentina is not populist but in Brazil we can say Jair Bolsonaro is a populist but a populist turning to the right similar to Trump.
How do you define a populist government, and how does the way populists communicate with the public differ from politicians with other ideologies?
A populist leader is someone who looks for a very direct relationship with their constituents. And the basis of populism in their communications is you have to create an enemy. An enemy that is very abstract, the leaders give them names. Here in Argentina it was corporations under the (Néstor Carlos) Kirchner administration and then his wife Cristina from 2003 to 2015. In that moment, we had in the region a wave of populism — in Brazil, in Uruguay, Paraguay and Ecuador. The same kind of political leaders with the same ideas also (lead to) nationalism, as the first thing populist leaders do is create that enemy. In the case of Mexico, it was the political mob. It’s very abstract and they could put everything in that group.
How do businesses, then, know where they stand, and how to navigate populist forces to accomplish their goals?
The first mistake a company can make is trying to fight against them publicly. If you fight them very directly, they will confirm you are the enemy and say they are defending the rights of the people who are suffering from (your actions). If a company doesn’t understand those dynamics when facing a new regulation or taxes they have to negotiate they are, in a way, strengthening those governments.
You have to build a positive agenda to engage in government. You can find points where you can build together something. In Mexico, there was an initiative by the government to support (the reduction) of unemployment among young people. That was something where companies could position themselves as not the enemy but work together with the (government leaders). You also have to learn the words the government uses. In Argentina it’s ‘import substitution’ for instance. For investment we all need to use the same language the government uses.
In a way it’s like corporations even adapt the words they use to communicate to (capture) the context of where they are operating, so they build a perception … so they are part of the same team. I am not saying that everything is going to be OK, because there will be points of opposition. But if you start with the right foot and you start building a positive agenda around key topics you will be better positioned to negotiate with the government. And you will not be positioned among the enemy.
Are companies in the US and Europe, both of which are experiencing populist movements, having to change their dealings in order to adapt?
In the States in particular or Europe there are regions that have stronger institutional systems. So lots of things that happen here in Latin America will never happen in the States. What you are starting to see in the Trump administration, which you would not define as institutional behavior, is part of what’s been going on with Latin America for ages. We have strong leaders and if they have public support they can do whatever they want. We have had government officials here in Argentina giving rules on what imports are allowed without regulation. That is something that you can’t imagine in your country. As long as the leader has support of the people…s/he can do whatever s/he wants.
So how can companies operate under those conditions?
What we need first for corporations are clear rules, because when you have these very strong leaders, a lot of uncertainty appears. Companies are planning more and more around a framework including volatility and uncertainty, complacency and ambiguity. That was started in Latin America where you didn’t have these strong institutions for a long time, and had rulers like dictatorships coming and going for a long time. We don’t have a strong track record of democratic government so institutions were weak.
The first advice we give to clients is don’t freak out. Government is a stakeholder that becomes more and more strong and it has its own dynamics. You have to have a very professional approach to how those companies interact with government. For a lot of years here, and in a lot of countries, the state bought participations in private companies. In that case, you have the state as a client, not only as a regulator or business partner. You have to have this professional approach and understand how they think. That’s how you can positively work with them.
How adept is business in adapting to changing political realities?
Some are more fast, some are more slow to adapt. Because a lot of corporations have been in business for 100 years or more they have had interaction with very different political cultures, governments and rules. The key for success (in doing that) is first understanding the dynamics and then having the flexibility to do business in different and changing environments.
These changing environments are not only happening in politics. What is going on in politics is going on in communications and the business environment in general. In Latin America, we are very passionate, we expect a lot. So now people want companies and brands to become more human and have a more direct relationship with them, and want to know what a brand (stands) for, thinks, feels and (its stand) on political issues and the opinion of the CEO. People demand strong leaders and strong leaders they can trust … country leaders, company leaders, union leaders. They don’t want abstract things. They want people with a face they can look at their eyes and say I like him, I believe him.