Divest Now?

Posted January 3, 2007

Categories: Articles

I cut my political teeth on the anti-apartheid movement of the 1980s, working to persuade my college to divest from companies doing business in South Africa. It wasn’t easy work. What did I know about investment portfolios? We were a small group, and we didn’t have any business majors providing pro bono advice. We knew apartheid was wrong and the Reagan administration policy immoral. We knew how to hijack the board of managers meeting and take over the administration building. But we were a little hazy about investment filters and mutual funds. Follow the money, we were told. Easier said than done for a bunch of English majors who shunned the stock market.

Campus activists have certainly become more adept at following the money. The anti-sweatshop campaigns, the protests against the World Bank and International Monetary Fund (IMF), and the mobilizations against free-trade agreements have all been an education in the global economy that is rarely found in the classroom. Now students are marshalling that knowledge and experience to bring an end to the genocide in Darfur. Borrowing from the anti-apartheid movement, activists have been pushing their colleges to divest from companies doing business in Sudan. They have scored some impressive victories, including the decision last year by the University of California regents to back divestment.

FPIF contributor Dan Millenson is a student at Brandeis University and the co-founder with University of California divestment leaders Jason Miller and Adam Sterling of the Sudan Divestment Task Force. In his contribution to FPIF’s latest strategic dialogue on the Darfur divestment issue, he describes the strategy that he and his fellow activists have adopted.

“In the process of pushing the UC Regents to divest, Jason had developed a model of divestment known as ‘targeted divestment,’ which surgically focuses only on companies that substantially aid the government, do not benefit civilians outside the government, have refused to take even minimal steps (such as pressuring the government to change its behavior) to ameliorate the situation in Darfur, and have proven unresponsive to shareholder engagement on the issue,” Millenson writes in Divestment: Ending the Genocide in Darfur. “The resultant two to three dozen ‘highest offending’ firms turn out to be clustered in (surprise!) Sudan’s problematic petroleum sector.” After securing victories on campus, the activists have now turned their sights toward bigger fish: the pension funds of public employees at the state and local level.

The big difference between the anti-apartheid movement and today’s Darfur divestment campaign is that U.S. companies are prohibited from investing directly in Sudan. So the activists have been focusing on U.S. investments in foreign companies doing business with Khartoum.

This is one reason why FPIF contributors Kevin Funk and Steve Fake part tactical company with the divestment movement. “While urging individual and corporate investors in the United States to sell their holdings in foreign companies because of their links to human rights abuses in Sudan is laudable in principle, it is also, at the very least, convoluted. One issue is simply the practicality of such an aim; in light of the extended degrees of separation of influence between perpetrators and activists, it is not obvious the campaign can be effective,” Funk and Fake write in Divestment: Solution or Diversion? Instead, they urge the campaign to focus on where they might have the most leverage: the U.S. government. “Darfur activists have largely failed to pressure Washington to take basic steps—beyond ultimately meaningless rhetorical grandstanding—to improve the situation on the ground in Darfur, such as funding AU troops,” they conclude.

Follow the argument as Millenson, Funk, and Fake reply to each other’s positions in the next round of the strategic dialogue.

Faith and Conflict

Does religion on balance create conflict or heal conflict around the world?

In the second round of our Religion and Foreign Policy strategic focus, FPIF contributor Bridget Moix writes, “While many still question whether religion can play a positive role in peacemaking, there is now wide agreement on the need to better understand the impact of religion in conflict situations and to try to mitigate the potential dangers.” Moix recommends that the U.S. government stop approaching religion through the lens of its “war on terrorism” and observes that religious actors are often most effective in reconciliation work in other countries when they are not linked to government efforts.

“Efforts by the U.S. military and intelligence agencies to actively engage religious actors and influences in conflict situations,” Moix writes in Faith and Conflict, “should be viewed with particular concern. Under the current administration the lines between civilian and military roles have already been dangerously blurred. In Iraq and Afghanistan U.S. humanitarian organizations, many of which are faith-based organizations, have often found their work complicated and the people they serve endangered by the U.S. military’s efforts to incorporate reconstruction and aid into its operations.”

In The Religion of Divide and Conquer, FPIF contributor Conn Hallinan takes a dim view of how religion functions in conflict situations. “In the Middle East and Sudan, religion certainly appears to be the ‘continuation of politics by other means,’” he writes. “Whether it is President Bush invoking the threat of a world-wide Muslim caliphate or Pope Benedict XVI warning that Islam promotes violence, religion is increasingly being used to ramp up the fear factor in international politics. But as with Europe’s great religious wars, religion in foreign policy in the end is a device that allows the strong to seize the resources of the weak in the name of a higher power.”

Speaking of conflict and faith, the pope and the president are not exactly seeing eye to eye these days. Although they share certain conservative policies, the two have diverged considerably on foreign policy. On global warming and engaging “rogue” nations, the Vatican has been at loggerheads with Washington. As FPIF contributor Heather Wokusch explains, the biggest bone of contention has been the Iraq War, with pope-to-be Joseph Ratzinger staking out an anti-war position in March 2003.

“As such, it is perhaps unsurprising that Benedict failed to honor Secretary of State Condoleezza Rice’s urgent request for a private meeting last month,” Wokusch writes in Pope Versus President. “The Italian periodical Corriere della Sera reported that Rice was hoping to capitalize on the Pope’s moral authority by having a papal audience focused on the Middle East. Instead, Rice was told that Benedict was on holiday and had to settle for a telephone conversation with a lower Vatican official.”


More Arms, More Popularity?

The United States has long operated on the assumption that selling arms around the world is the equivalent of handing out candy to children: it makes the giver very popular.

Not so, argues FPIF columnist Zia Mian. Pakistan has been one of the largest purchasers of U.S. weapons, but that hasn’t made America any more popular in Pakistan. “A Pew Poll released in September 2006 found that in Pakistan, the United States is viewed less favorably even than India (with which Pakistan has fought four wars),” writes Mian in How Not to Win Friends and Influence People. “Just over 25% were favorable toward the United States, compared to one-third who felt that way toward India.”

The sad truth is that the United States is dumping so many weapons into the world market, it doesn’t really know where they are ending up, much less whether they serve any precise national security objective. As FPIF contributor Rachel Stohl points out, the 200,000 weapons that the United States has lost track of in Iraq are an apt metaphor for U.S. arms policy in general.

“It is hard to see how sending arms to unstable governments is consistent with the stated U.S. goal of spreading peace and democracy throughout the world,” she writes in The GWOT Effect of Arms for Dictators. “Once these weapons and specialized training leaves the United States, we relinquish control of how, by whom, or for what they are used. These countries’ pledges of support are limited to our war on terror. But the past actions and instability of many of them draws their future allegiance and stability into question.”

What Is To Be Done?

As globalization barrels along, more U.S. companies relocate abroad or threaten to do so “as leverage to obtain concessions from workers,” writes FPIF contributor Jerome Levinson in Globalization: What Is To Be Done? “While not a complete explanation for the relative stagnation in industrial wages and growing income inequality in the United States (and elsewhere in the world), it is perhaps the most visible, easily understandable, and therefore the most inflammable aspect of globalization for American workers.” Levinson’s proposal: include strong labor and environmental provisions in and exclude investor protections from any future trade pact, reform the tax code to eliminate preferential treatment for foreign over domestic source income, and allow countries to design their own balance between equity and efficiency considerations.

On global warming, FPIF contributor Michael Shank recommends that the European Union consider including old-growth forests as a category of offsets in its cap-and-trade policy. Old-growth forests harbor something called arbuscular mycorrhizal fungi, which in turn produces a protein called glomalin. “According to a University of Maryland study, glomalin accounts for almost a third of all the carbon stored in soil,” Shank writes in The Soil That Saves. “Factor this with scientific estimates that soil has the potential to sequester 40-80 billion metric tons of carbon over the next century and the conclusion is simple: protect old-growth forests. The soil found in old-growth forests may be one of our most valuable assets in our efforts to slow climate change.

The two Koreas have a plan. “The recent summit between Kim Jong Il and Roh Moo Hyun suggests,” I write in Summit: Post-Playground Politics, “that the two Koreas are finally groping their way toward a fundamentally new regional order. The 2000 summit broke the ice. At the 2007 summit, the two sides pledged to move toward a more integrated and self-reliant peninsula.”

Finally, on the topic of what is to be done, if you live in the Washington, DC area, you need to come to the annual Letelier-Moffitt Human Rights Award ceremony on October 17 at the National Press Club. Come hear Eve Ensler, Rep. Jan Schakowsky, and Wade Henderson present awards to Colombian Senator Gustavo Petro, the Appeal for Redress from the War in Iraq, and DC Vote. Tickets are reasonable; the inspiration will be priceless.

FPIF, October 8, 2007

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