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Activist
groups are often limited by a passionate and overzealous belief in their
cause, to the point where they may end up doing more harm to it than good.
Harvard’s Darfur Action Group (HDAG) and Students Taking Action Now:
Darfur (STAND) are surely no exception.
Though
Harvard has divested from direct holdings in two companies, Sinopec and PetroChina—both tied to business with the Sudanese
government—STAND and HDAG are now inflamed that Harvard maintains indirect
holdings in both companies, as well as in Petronas—also
with ties to Sudan—through Barclays Bank. Though a
link between the University’s stock certificates and the support of
mass murder in Darfur is easy enough to play up for
attention, it is one that is hardly direct. In PetroChina’s
case, Harvard invests in a fund through Barclays, which contains stock in PetroChina—a company spun off from, yet still
mostly owned by, the China National Petroleum Company. It is a company that
has oil concessions in Sudan and thus pays tax to the Sudanese
state, which is in turn implicated in the genocidal exploits of its own army
and the Janjaweed militias in the Darfur region.
Many
activists view this kind of connection as absolutely clear cut. “We
should not be putting our money into the hands of genocidaires,
it is that straightforward,” as two members of HDAG wrote. But the
economics of divestment are not quite as simple as college-student platitudes
let on. For example, every time you buy a product that somehow contains or
somehow involved a petroleum derivative in its production or distribution,
you are assisting genocide in Darfur by keeping oil prices higher, as it provides more revenue for Khartoum. Still, STAND and its kin maintain that
there is a higher imperative to divest from these and a few other similarly
disposed companies than, say, to disengage completely from the global
economy.
Such
groups advocate “targeted divestment.” This strategy promotes
divestment only from companies that are obstinate in maintaining Sudanese
ties and who represent, on their own, large sources of revenue for the
government. Since oil profits go mostly to the state and the state spends
most of its budget on arms instead of its people, they hold that divestment
will apply an almost painless and bloodless pressure on the locus of power.
Unfortunately,
this theory is little more than wishful thinking. Even supporters of the
model, such as Nicholas Kritof, admit that
“divestment and economic sanctions generally fail. The closest thing to
a success was the way they helped topple white rule in South Africa in the 1980s, but even there one result
was greater hardship for ordinary blacks.” Even if one were to credit the
divestment movement as a deciding factor in the end of apartheid, a
comparison still shows how ineffective a similar effort would be in Sudan. For all its repression, South Africa was, at least among the white minority,
a bourgeois, liberal state. When apartheid started to become horrendously bad
business, both internally and externally, its days were numbered. A military
despotism of the sort that reigns from Khartoum is a much different beast. If one looks
a little to the northwest, at Libya, or a little to the northeast, at Iraq, one sees despots that survived years
of international sanctions.
If these
do not convince, the Sudanese experience itself indicts divestment. Since the
United States first placed an embargo on Sudan in 1997, direct foreign investment in Sudan increased more than 15-fold. The
difference being that now, whereas few of the investors come from liberal
democracies, the biggest investors in companies tied to Sudan are from the Peoples’ Republic of
China. With well-known regard for human rights and a veto on the UN Security
Council, China is often cited as one of the biggest
obstacles to making progress in Darfur, and the first move towards divestment only served to fortify China’s influence.
With
high oil prices and investor-friendly conditions in Sudan, it is extremely likely that even a
nation-wide campaign of institutional divestment will simply lead to
increased investment by less morally discriminating investors rather than a
decline in total foreign investment in Sudan. In 2002, for example, some Darfur divestment advocates declared victory
when Canada’s Talisman Energy ended its
operations in Sudan. But this move merely involved selling
its Sudanese holdings to another company. As far as Khartoum is concerned, the change was mostly
cosmetic. The wave of institutional divestment that followed Harvard’s
move has hardly dried up anyone’s stream of funds. PetroChina
stock, which was worth around $60 when Harvard divested, now trades for about
$110 (see chart).
Yet
somehow the fatuity of STAND and HDAG is entirely in earnest. They shield
themselves with incoherent arguments. They spend so much effort adjudging
which companies to black-list, which institutions to target for divestment,
and which ways institutions are tied, that they never question the cause
itself. They are so fixated on believing in their own influence in the matter
that they eschew reasoned inaction for shows of influence that are empty, or
worse.
At most,
the Darfur divestment movement has provided a few
short-term setbacks to Sudan’s revenue collection that likely
did not aid a single Darfuri in any way. At worst,
and rather more likely, it has worked to push Sudan further into the
geopolitical orbit of countries that are even less willing to address the
Sudan’s massacres than the states were divestment was popular, thus
prolonging the suffering of Darfur.
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