TeliaSonera growing in police states

Some of TeliaSonera’s most dynamic growth markets are in corrupt police states, where torture, police violence and bribery are rife. Svenska Dagbladet reports that the telecoms giant’s subsidiaries in Azerbaijan, Georgia and Moldova have grown substantially over the past year.

Amnesty International says that the three states have poor human rights records, with widespread bribery and state-sponsored violence.

But for the Swedish-Finnish telecoms company the three countries represent, together with neighbouring Kazakhstan, a market in which turnover has increased by 49 percent in just one year.

Filipa Bergin, head of Amnesty Business Group, part of Amnesty International, told SvD that she recommends that the company undertakes a risk analysis to determine how it can avoid finding itself implicated in aiding the regimes’ human rights abuses.

But other experts emphasise that investment in countries with repressive regimes can often help accelerate change:

“One of the few things that is working for these countries is foreign investments, especially in telecoms,” says Svante Cornell at the Institution for Eastern Europe Studies at Uppsala University, who dismisses arguments against investment there as “Euro-centrist and sanctimonious.”

“If there wasn’t investment in these countries there would be less contact with the outside world and a slower process of reform,” he told The Local.

Cornell also argues that mobile phone companies in particular can free up communication channels, helping the democratisation process.

“You’ve only got to look at the role that mobile phones played in the Georgian revolution to see how useful they can be.”

TeliaSonera is not the only Swedish company to invest in the region. Both telecoms equipment firm Ericsson and engineering giant ABB have strong links with the countries of the Caucasus. There are also venture capital firms based in Stockholm that have portfolios covering the three nations.

While Svante Cornell says that business links between Sweden and the three countries has mainly positive effects, he underlines that companies ought to proceed cautiously:

“Companies need to ask themselves whether they can operate in these countries without being hijacked by the government. Given that there is a risk of revolution, it is dangerous for them to be perceived as being too close to the regimes.”