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The limits of boycotts

Are boycotts the best way of making political statements, asks Niveen Wahish

Niveen Wahish , Tuesday 3 Nov 2020
The limits of boycotts
Supermarkets in some Arab countries removed French products in solidarity with boycott calls
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Calls to boycott French products have been trending for the past two weeks in Egypt and the Arab world following the failure of French Pesident Emmanuel Macron to denounce cartoons depicting Prophet Mohamed that are offensive to the Muslim world.

Macron tweeted that he had been misquoted as saying that he supported the cartoons that depicted the prophet, while instead saying that he supported “the freedom to write, think, and draw freely in my country. It is a right and it is one of our freedoms. I realise this can be shocking and I respect that, but we have to talk about it.”

The French Foreign Ministry said in a statement on 25 October that the calls for a boycott of French products were “baseless and should stop immediately, as well as all attacks against our country, which are being pushed by a radical minority.”

Before the calls against French products, calls to boycott Turkish products also gained momentum in the Arab world last month in protest at Turkish meddling in the Middle East.

Trade boycotts as a form of political expression are not new to this part of the world. “The turmoil in the Palestinian Territories, the war in Iraq, US support for Israel, the Danish cartoons that were considered blasphemous in the Muslim world because of their depiction of Prophet Mohamed in a derogatory manner, and the Dutch anti-Islam film have all fuelled anti-western sentiments in the Middle East, obliging western multinationals to battle boycotts and public relations nightmares,” said a 2008 paper entitled “The Burden of Identity: Responding to Product Boycotts in the Middle East.”

With around 420 million people in the region, “there is significant purchasing power involved. And there is always the fear that a boycott movement could snowball and cover the entire Muslim world (1.5 billion people),” the paper said.

Egyptian MP Medhat Al-Sherif believes boycotts are an effective tool for making statements, especially in huge markets such as Egypt. He noted the effect of calls to boycott car sales in Egypt in 2019 in protest against high prices, when the campaign succeeded in pressuring car dealers to lower their prices.

But boycott campaigns need proper management to avoid negative repercussions on local industries that may be producing foreign brands domestically, he said, adding that boycotts without someone at the helm can also run out of control. “Being a popular movement, they can catch on widely, especially because of social media that has become more powerful than traditional media,” he added.

For that reason, Mohamed Al-Bahy, a member of the Egyptian Federation of Industries, is against boycotts by the public. Countries’ “relations are intertwined. Just as we punish others, we could be punished by boycotts, and our exports could be affected,” he said.

There were joint projects and joint-venture companies that employed thousands of Egyptians that could be affected by boycotts, he said, stressing the need to calculate risks and not take emotional decisions when long-term agreements were at stake.

There are 162 French companies operating in Egypt, providing about 38,000 jobs, with an investment volume of 5.2 billion euros, the head of the French-Egyptian Chamber of Commerce was quoted as saying last year.

Quantifying the effect of boycotts, a 2014 study entitled “The Effectiveness of International Trade Boycotts”, examining the effect of the boycott of Danish goods by Muslim countries following the Prophet Mohamed cartoons crisis in 2005-2006, said that “while the percentage loss for all the Muslim countries combined is sizable, this loss is marginal when compared to the total exports of Denmark.”

The study showed that over the period from October 2005 to September 2007, Danish exports with all trading partners came to 1.08 trillion DKK (Danish krone, $185 billion). The “overall disruption of trade caused by the boycott was only 0.4 per cent of all Danish exports during this period,” the study said, adding nonetheless that “while the boycott might have hit individual Danish companies hard, the effect on the total Danish export sector is negligible.”

The situation may be similar in the case of the boycott of French exports. Maria Bach, assistant professor at the American University in Paris (AUP) faculty of economics questioned the

extent to which demand from the Arab and Muslim world affect the bottom line of French companies. “To what extent will the demand decrease so as to get the companies to push the French government to change their narrative on the recent terrorist attacks and the very strong and dominant politics of secularism in France?” she asked. With French exports to the Arab and Muslim world reported to make up only three per cent of France’s total exports, she suggested that the effects would be relatively small.

French exports to Egypt are around $2 billion. French exports to the Arab world as a whole average around $22 billion, according to World Bank data. In comparison, French exports to Germany alone come to around $83 billion.

 

*A version of this article appears in print in the 5 November, 2020 edition of Al-Ahram Weekly.

 

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