Elections: votes and volatility

Citizens in countries containing almost half the world’s population went to the polls in 2024, with voters confirming democracies and autocracies alike. Not much changed in the latter, where outcomes were sometimes manipulated by dictators and a foregone conclusion. But ramifications in the free world – a relative term, dependent on what version of democracy prevails – may turn out to be profound.

A common theme was populist nationalism, where political figureheads promise to represent the interests of the prevailing culture and way of life of the country. This resounded from America to Europe. European Union (EU) parliamentary elections last June resulted in centrist parties losing ground and anti-EU right-wing parties making substantial gains. There were lurches to the right in France, Italy and in Germany, where conservatives won the February election, albeit with a lower share of the vote than expected.

Aside from trying to navigate post-election fallout, FIDI Affiliates in some countries must also battle to do business in conflict zones. For 2024 was not only a year of elections, but also one in which the number of armed conflicts surged – more than double the number in 2023. FIDI Focus hears from Affiliates who have been involved in Russia and Ukraine, where the sound of explosions and gunfire has long been built into daily life, and Lebanon, the small Mediterranean country that has often been rocked by war, terrorism and outside forces.

We also have insights from Venezuela, still wracked, post-election, by instability and lawlessness; and South Korea, where political convulsions late last year took most of the world by surprise – once more proving that the familiar world order can no longer be taken for granted.

The US

Few electoral outcomes were more significant than the return of Donald Trump to the White House. Yet, amid the unpredictability, there are constants: junking commitments to net zero, and flagship policies such as the mass deportation of illegal immigrants and the imposition of tariffs. It’s hard for businesses to plan around all this.

The prospect of tariffs has unnerved economies worldwide. Last year, FIDI Focus reported the fears of Charles Haverfield, CEO of Arkansas-based US Packaging & Wrapping, that tariffs on all imports could rise by up to 20 per cent, and 60 per cent on Chinese goods. They could, he said, add ‘layers of complexity to cost management and logistics… a rush to beat tariff deadlines creating bottlenecks in warehouses and ports’.

Concerns expressed by the Dutch banking sector typify the unease felt across Europe. Major exporters to the US in the Netherlands include the chemicals, pharmaceuticals, vehicle parts and machinery industries. Rabobank estimates that a 10 per cent tariff could cause the Dutch economy to shrink by 0.9 per cent. Any trade war would result in American products becoming more expensive across Europe.

Then there are Trump’s foreign-policy shifts. ‘These could potentially reshape global mobility patterns,’ says Curt Clements, CEO of Move One Logistics, which operates in 50 countries. ‘With proposed reductions in US commitments to NATO, cuts to USAID [US Agency for International Development] funding, and potential withdrawals from organisations such as the WHO [World Health Organization], businesses operating across borders must prepare for increased uncertainty,’ Clements adds. ‘Protectionist trade policies and shifting alliances could slow expat deployments and international investments, particularly in volatile regions. In just a few weeks since the Trump team has taken over, we’ve seen a big outflow of staff working on projects funded directly or indirectly by the US government. Operations are winding down and staff returning to their home countries. We expect much of this funding to not return and thus a much lower demand from these customers.’

The ongoing trade-war rivalry between the US and China adds further uncertainty. ‘Companies operating in the Indo-Pacific face a challenging environment as shifting trade policies and tariffs impact supply chains and investment decisions,’ says Clements. ‘This could slow the movement of expats into the region, as businesses reassess long-term strategies.’

Russia

The international moving business in Russia has grown used to convulsions since the Soviet Union disintegrated. ‘Throughout our history, we’ve faced different threats and opportunities, including financial crises worldwide,’ says Victoria Chub, MD IWM Russia. Her company has faced new economic sanctions, for which she says the company is ‘very well trained’. ‘The major challenge today is having to reconstruct our business by growing the domestic part and moving resources from international – a trend since the end of 2023, when international moves started to shrink dramatically.’

They have shrunk to only those in the private and diplomatic sectors, yet Chub remains upbeat. ‘The Russian domestic market is growing pretty fast now. We’ve been investing a lot into it. Our Russian corporate accounts portfolio has grown fast for the past couple of years.’

Since the conflict began, Russian trucks have been unable to cross into the EU, shipping container traffic has stopped, and EU airlines have stopped serving Russia. However, Chub says all of this is manageable. ‘With our strong international partners, we’ve managed the changes pretty successfully, while moving thousands of expatriates and diplomats’ families out of the country since February 2022.’

But what of the future? ‘We know that, sooner or later, many multinationals who left behind the Russian market and lost billions will be back – but when? We’d like to get back to international business accounting for 50 per cent of our revenue, but, until then, we just need to wait and work hard on the domestic side.’

Since business from the EU and elsewhere retreated, countries from other parts of the world have begun moving in. ‘We’ve started to work more closely with agents in Asia, the Middle East, India and Latin America,’ says Chub, who expects these markets to grow rapidly. New logistics routes have been developed: railway routes through Asia; from the Middle East via Southern Russia and Commonwealth of Independent States (CIS) countries; for the east via Vladivostok port. IWM is exploring setting up in some CIS countries to further develop logistical alternatives.

Business may be down in Russia, but it is far from out. Meanwhile, Europe faces economic pressures created by its commitment to Ukraine’s war effort and reconstruction thereafter. Move One Logistics’ Curt Clements believes the prospect of higher taxes, particularly on high-net-worth individuals and corporations, will trigger a flow of professionals and executives relocating to regions such as the Middle East, which continues to attract investment because of its business-friendly policies and stable financial outlook.

‘The Gulf region is benefiting from Europe’s shift away from Russian energy sources,’ he says. ‘This redirection of energy demand is strengthening Gulf economies, ensuring a steady flow of investment and creating opportunities for corporate expansion and workforce mobility. Should regional conflicts de-escalate, the Middle East could see further economic growth – and a boom as they finance the reconstruction of Gaza and Syria.’

Lebanon

Lebanon is usually viewed through a prism of destructive conflict and economic chaos. Business success stories, achieved against the odds, tend to go unnoticed. Yet they exist, and among these is that of FIDI Affiliate BCC, which was formed in 1993 and is a major presence in the country’s logistics market.

The company has a staff of 400 across offices in Lebanon, Saudi Arabia, Qatar and Iraq. Locally, BCC employs more than 200 and has a fleet of more than 80 vehicles. Services range from freight forwarding (air, sea, land, clearance and delivery), warehousing and distribution, fine art handling, and heavy lifts.

‘Operating in a small country such as Lebanon requires diversification and adaptation,’ says Ziad Harb, BCC’s President and CEO. ‘Despite ongoing political instability, we’ve embraced aggressive sales strategies and expanded our offer.’

Remarkably, despite all the disruption in its midst, Harb says BCC has sustained an average annual growth rate of 20 per cent. Diplomatic missions are core business, but the ‘extensive Lebanese diaspora’ provides plenty of individual moves. A handful of corporate accounts – multinational companies – remain.

It’s hard to imagine how BCC can operate around war-ravaged infrastructure. However, the firm is well embedded in its home country and can readily summon local expertise to find alternative routes and means of transportation and delivery. ‘Moreover, we’re able to handle moves through Beirut airport and seaport for diplomatic missions in Syria, which shows we can manage complex logistical needs in the region.’

Recruiting and retaining skilled employees in Lebanon is a challenge because of the economic uncertainties, Harb admits, but adds: ‘BCC offers competitive salaries and professional development opportunities. Safety remains our top priority – we implemented rigorous protocols during the recent war, to ensure employees feel secure. We ran mandatory safety training focused on emergency response, first aid and risk assessment; and our fleet was equipped with GPS tracking and monitored routes to avoid high-risk areas.

‘We believe every war prepares the ground for peace. Optimism drives our commitment to continued investment. We look forward to brighter days and a peaceful Middle East.’

Ukraine
When FIDI Focus rang Marina Chornokozha, Interdean’s Kyiv-based general manager – coincidentally on the day UK Prime Minister Sir Keir Starmer arrived to sign a 100-year partnership treaty with Ukraine – the line soon broke up. We tried again and, this time, it rang out. There had been an air-raid alert. ‘When I arrived at the office after our failed attempt to talk, I was going out of the car and heard machine-gun fire close to a drone flying over our district,’ she explained later.

Still, things could have been worse, as Chornokozha knows only too well. ‘During one attack around a year ago, when we all were in the office and didn’t have time to run to the shelter, a shock wave removed one of the air conditioners. We were lucky – no one was hurt. But sometimes they have been.’

Attack by drone and missile is a perpetual threat. Often, there’s no electricity – sometimes for hours; sometimes for days. Ukraine, whose resilience never ceases to amaze, manages as best it can. Local authorities try to publish schedules of power outage, so it’s possible for Interdean to plan activities to some degree. ‘We have a battery in our office that we charge when electricity is on, which we can use later. In winter, though, it is tougher, as we have electric heating in our office. Our activities are limited by both the capacity of our battery and the weather.’

Interdean’s trade has reduced drastically since Russia’s invasion three years ago. ‘The main challenge in business now is its absence,’ says Chornokozha. ‘There were almost no international moves last year, and prospects are not promising. Even if the war is over soon – which, in my opinion, is unlikely – people Voerman Group has long been used to working around geopolitical tensions worldwide, but leaving Russia in 2023 – after its invasion of Ukraine – was one of the firm’s most significant changes in recent years; a move driven by ‘operational challenges and moral considerations’.

‘The decision to withdraw was not made lightly,’ says Wiebe van Bockel, Voerman’s Chief Commercial Officer. The company had operated there for more than three decades, during two of which it was spearheaded by Dennis van Diemen. The Moscow branch was considered a ‘flagship operation’.

Instead of simply shutting down, however, Voerman transferred ownership of the operation to local staff, allowing them to continue under a new name, ProMovers. But it was a complex exit process, as European businesses faced restrictions on financial transactions and regulatory hurdles. Voerman, classified as an entity from an ‘unfriendly’ country, encountered banking limitations and additional tax controls. Moreover, Russian laws mandated that any foreign company wishing to quit must sell its stake to a Russian entity at a significant discount. Hence Voerman’s choice to gift the business to employees, with the aim of preserving jobs and continuing to serve clients. The market has, inevitably, shrunk because of the war and economic sanctions, but ProMovers remains operational, and is adapting to the new landscape.

Despite leaving Russia, Voerman is expanding in Ukraine – where it expects post-war reconstruction to drive demand for logistics, general cargo and household goods services – and in Poland, which it sees as a key regional hub.

The firm feels a swift resurgence in Russia is unlikely, however, given the extensive rebuilding required and international sanctions. It does, though, remain open to re-engaging with the Russian market mid to long term, ‘provided it aligns with European regulatory frameworks and ethical business standards’.

Van Diemen feels it important to distinguish between the actions of a government and the sentiments of its people. ‘People mustn’t think all Russians are the same,’ he says. ‘Many are against the war and everything that costs human lives. The country has so much potential.’