FP: So 10 years ago, government relations were more transactional and oriented more toward the national level. Today, increasingly, it's much more diversified, much more localized.…
MK: Well, I'm saying, today the low-hanging fruit is in local opportunities. We need to focus on the speed with which local governments can work with businesses. I meet subnational leaders who operate like the types of CEOs or business leaders I like to work with. They can make things happen; they act faster, more flexibly. They have more risk tolerance, and they're more entrepreneurial.
And in terms of what models lead to progress, the world is converging. Before, it was Western industrial governments who supposedly knew everything -- everyone else was supposed to learn from them and emulate them. Today, the world has become a small village. If it's governance, it's just as important in Kinshasa or Maputo as it is in Brussels. They've realized that small, incremental improvement in governance is what's leading Africa's GDP drive. So everyone knows, whether it's business, government, or civil society, you need governance models that work. You need to be transparent. You need to show something for the money you spend. You need more accountability from everyone.
FP: Let me ask you about this "world as a village" concept in the context of Coca-Cola. To what extent can a brand like Coca-Cola be both American and global? Isn't that a contradiction?
MK: It's precisely because of the local nature of our business that we're successful and global. If Coca-Cola had not worked on a local level, when metrics for "Brand America" were at its lowest, say, six, seven, eight years ago, Coca-Cola could not have continued to prosper in many parts of the world -- but it did. And that's because Coca-Cola has a fantastic local partner in Israel, with whom we celebrated our 40th anniversary some four years ago when I was there. And we have a fantastic partner in Ramallah in the Palestinian territory; we have three factories in the West Bank, and we just celebrated 10 years with them as a Coca-Cola partner. The model of Coca-Cola is local, whether it's investing, partnering, sourcing, producing, or selling. We market and distribute locally; we pay taxes locally. And it works. In September, we entered our 207th country with a delivery to local customers in Myanmar -- our first time doing business there in more than 60 years.
FP: I could make the argument that the Obama administration's single greatest foreign-policy success -- although no one in the administration went into office anticipating it or spearheading it -- was Myanmar opening up. It really worked. And Coke was in there fast. Coke was in there early. How did you do it?
MK: Earlier in my career, I guess I was fortunate to be in Vienna with the responsibility of opening up Eastern Europe -- about 15 months before the Berlin Wall came down. Just like it was then, you had to make a call, that the wall would come down, and you had to spend money. And you'd look foolish spending money, opening offices behind the wall, if it didn't come down. But everything proceeds too quickly not to prepare in advance. You just need to make a judgment call sometimes. I love Southeast Asia. As a child, I lived in that part of the world. My first time in Burma was in 1958 with my parents. And so recently we started talking to a lot of people; we have partners in Thailand. We firmly believed it [Burma] was poised for change.
FP: So the U.S. began suspending sanctions in Myanmar in May 2012. When did you start looking at the possibility of doing business there in a serious fashion?
MK: Seriously thinking we'd be in business? About three years ago.
FP: I met with their minister of tourism recently. He was talking about where Myanmar is on infrastructure -- they need everything. As of last year, Myanmar's electrification rate was 26 percent. Transparency International's Corruption Perceptions Index 2012 ranks Myanmar at 172nd out of 176 countries. Is there a role Coca-Cola is playing to help Myanmar get up the curve faster -- bureaucratic capabilities, infrastructure, all these things -- to more quickly join the world of nations?
MK: I think we are helping. We're getting Myanmar on board to join the 5 by 20 initiative for the economic empowerment of women. On top of that, we're talking with our sustainability partners to have Burma realize the incredible value they have in the natural beauty of their country. They need to learn from the lessons of other countries where the pace of development came at the extreme detriment of nature. They have this special gem that they'll be better off in the long run if they respect. That doesn't mean, by the way, that you trade it for poverty. In the long run, every one of the 50 million-plus citizens can benefit from utilizing the natural environment responsibly.
FP: Coca-Cola remains on the sidelines in two major countries: Cuba and North Korea. Any speculation as to whether we'll see Coca-Cola in Cuba in the next five years?
MK: No comment.
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