The author is a Reuters Breakingviews columnist. The opinions expressed are his own.  How can a company that values diversity do business in Saudi Arabia? It’s not a trick question. The opening up of the kingdom has attracted investment bankers in droves, vying for a role on mandates like the initial public offering of oil refiner Saudi Aramco. Financial groups can argue that Saudi’s direction of travel towards reform is what counts, rather than its woeful human rights record right now. Singapore has complicated matters.  The city state warned foreign companies on June 5 not to sponsor, support or influence events like the Pink Dot rally, which took place on June 4 in support of the city’s lesbian, gay, bisexual and transgender community. That’s a direct challenge to Goldman Sachs, JPMorgan, Barclays and BP, all of whom sponsored the event, and all of whom are outspoken in their support of equal treatment regardless of factors like sexual orientation.  The city’s logic – that foreigners shouldn’t meddle in domestic affairs – is risible. Almost 30 percent of Singapore’s population consists of foreigners working, studying or living there on a non-permanent basis, exports equate to almost twice GDP, and a highly globalised financial services sector provides 13 percent of national output. Yet while Singaporean society is modern and progressive, its laws aren’t. Materials concerning sexual orientation are banned; sexual relations between men are illegal. Same-sex partners aren’t covered under the country’s immigration rules.  There are two reasons not to stand up to Singapore. First, its wealth makes it a huge source of revenue. In theory it should be easier to refuse publicly to do business in a country like Saudi, since fees from deals like Aramco are likely to be minimal. Second, companies can play down the face-off by plausibly arguing that they sponsor the event’s organiser, not the event itself. Or they can funnel sponsorship through local subsidiaries.  But if companies like Goldman want to show they are a force for good as they edge towards more socially repressive places like Saudi or Iran, Singapore is exactly the place to take a decisive stand. Speak out, and it will give support to the theory that they might subtly push for change in more restrictive places over time. Keep quiet, and their claims of putting values before profit will sound hollow.
Banks covet business in Saudi Arabia despite its poor human rights. They can say it’s the direction of travel that counts. Singapore, which just told groups like Goldman Sachs to stop backing a gay and lesbian event, is going backwards. It puts corporate sincerity to the test.