Categorized | Global View

Divesting from Darfur

A five-year-old boy buys a candy bar from the convenience store and he is so excited. He cannot wait to go home and devour it when his mother isn’t looking. At the end of the day, the convenience store owner takes all of his earnings and puts it in his 401(k). He is invested in a very profitable business firm and he feels secure for the future. The business firm invests this client’s 401(k) in an even bigger, international oil company. They are happy with their stock percentage for this year.
The oil company buys oil from Sudan and keeps their company wealthy and their shareholders happy. The Sudanese government stocks their artillery and acquires weapons from the same country the oil company provides the oil to and the military continues to wage war on its civilians. In the drought-ridden region of Sudan on the eastern edge of the Saharan desert, the United Nations attempts another fruitless round of diplomacy, the politicians bicker amongst themselves and a five-year-old boy watches his mother die in front of him. He does not understand why the world is against him; his experience is completely different from the other young boy, yet their lives are connected.
A trail of guilt travels across the world, proving the power of a dollar can grant freedom and oppress at the same time. In this case, the result is a four-year conflict, up to 400,000 lives lost, 2.3 million people internally displaced and 200,000 more living in refugee camps in Chad. The United States has declared the Darfur conflict genocide; the U.N. calls it a humanitarian crisis. Whichever term is used, it is happening. And if people are looking to find one of the reasons why, all they need to do is follow the money trail.
Since 1965, when Sudan gained independence from the United Kingdom, the country has seen only 11 years of peace. The current and subsequent wars in Darfur have mainly been ethnically driven between farmers and nomadic herders. In general, most farmers are of African descent and most herders are of Arab descent. The competition for land between the herders and the farmers has been fierce and reached new heights when the current conflict began in 2003. The government has enlisted the Janjaweed, nomadic herders from the north, to fight against the African rebels, including the Sudan Liberation Army. Now, with drought and climate change fueling the already flaming fire, coupled with countries taking advantage of an area whose oil is most likely cheaper than others, the conflict continues in a cyclical pattern.
“Everything leads back to money. I mean, if it’s profitable for a country to help them, then they will probably get involved,” said Elaine Brantley, an interdisciplinary studies in health studies junior.
Today, China has come into an unlikely position of influence in the region; if played correctly, this position could instigate peace negotiations. However, this scenario would require China’s cooperation. PetroChina, a multi-billion dollar Chinese oil company, is Sudan’s biggest investor of oil, which is its largest export. One would think this would make the country very wealthy. However, the wealth is not distributed among the people. About 70 to 80 percent of the revenue goes towards funding the military. This is where the idea of divestment comes into play.
Divestment, a grassroots campaign that calls for certain targeted national and international companies to take their investments out of Darfur, is currently sweeping the nation. Companies like Calvert, Clean Yield Group and Pax World have already divested. However, many U.S. investment companies, such as JPMorgan, Chase, Franklin Templeton and Berkshire Hathaway, still hold substantial shares in PetroChina, whose shares jumped up 13 percent on Oct. 15 amid news of increased oil production. PetroChina’s parent company, China National Petroleum Corporation, funds oil drilling in Sudan, which in turn, puts money in the pockets of the government to buy weapons. Investors in these companies are generally unaware their money is going towards funding the Sudanese military.
[kulasa2]Spartans Taking Action Now: Darfur (STAND), the MSU branch of a national student anti-genocide coalition, has become an advocate of divestment. STAND holds an array of different activities on campus including peaceful protests, fundraising and promoting advocacy and education surrounding the Darfur crisis. Rachel Kulasa, STAND divestment coordinator and social relations and political theory senior, thinks divestment is definitely the way to go. “If the entire United States divested, that would be a great accomplishment, which Sudan would definitely notice, and it might force them to reform some of their policies,” Kulasa said “It is still important that every state, city, individual and university that has money invested in these socially irresponsible companies divests, even if it may seem insignificant.” But will pulling out your pension from one of these targeted companies on the list be enough to end one of the most brutal conflicts in recent history? How much of a dent can divestment really make on a multi-billion dollar company?
Dr. Malik Balla, coordinator of Arabic language program and professor of Arabic at MSU, is skeptical of the divestment campaign. “Canada pulled out of Sudan and what happened? Nothing!” Balla said. “The Chinese, Russians and Malaysians substituted Canada’s investments.” If PetroChina does miraculously pull out of Sudan, then what will stop another big oil company from taking its place?
Historically, however, divestment campaigns have been very successful in changing governmental policies – such as the anti-apartheid campaign in South Africa. Although it was first implemented in the 1960s, the anti-apartheid campaign did not gain momentum until the 1980s, when it started to take hold on college campuses. Students demanded their universities stop trading and investing in companies that operated in South Africa. In particular, the students at University of California, Berkeley were very vocal. In April 1986, 61 students were arrested for building a shanty-town in front of the chancellor’s office. That same year, the United States enacted federal legislation that spurred the South African government into negotiations that ultimately led to the break-down of the apartheid system.
In the past, Sudan has been very responsive to economic pressure. When the government was harboring Osama Bin Laden in 1997, they were compliant with providing information as well as dismantling terrorist networks after the U.S. imposed sanctions. In the current campaign, there have been many developments regarding major companies jumping on the divestment bandwagon. One major company that was highly scrutinized, Canadian firm CHC Helicopter Company, recently pulled all of their funds and activities out of Darfur after a series of inquires from investors. Previously categorized as a “Highest Offender” in the “Sudan Company Report,” CHC has ceased all activity in Darfur indefinitely.
Although divestment appears to be becoming more appealing, whether it also is economically viable is up for debate. In theory, U.S. investment companies that sell their shares in PetroChina are just transferring the burden onto someone else. To burn the shares would just keep the money in the company, so investors have no choice but to sell. Professor Luis Araujo, economics professor at Michigan State University, sees both pros and cons to divestment. “When you sell the share, the value of the share goes down. It hurts the company. It puts them in a worse position,” Araujo said. “But there is no definite answer. It could economically backfire. It all depends on how the company will react.”
Emma Rector, president of STAND and comparative cultures and politics sophomore, recognizes it could be a struggle. “I think that for some companies, it’s just about economics. I think it’s just easier and cheaper to [invest] there. Plus, it’s a hassle for companies to think of new places to invest. But if it’s going to save X number of lives, then they have to do it,” Rector said.
Because the 2008 Olympics will be in Beijing, the international community is using this time to put pressure on China to extract all their funds out of Darfur. Some are calling for an outright boycott, but most are using the opportunity to shine an even brighter spotlight on China’s economic activities. Andrea Kayne, professional writing sophomore and Outreach Coordinator for STAND, is for the latter. “I don’t think athletes should be punished for China’s economic decisions,” Kayne said. “I think if there’s enough international pressure in demand, that we will give them no other choice but to comply – peacefully of course.”
[saraq]Rector supports the potential of the upcoming Olympic games to play an important role in China’s diplomacy with the rest of the world. The Olympic dream of recognizing the best in all countries and promoting equality and human rights across all borders of the globe could be trivialized by China’s questionable economic activity and could cause the Chinese to become concerned about the rest of the world’s opinion on the legitimacy of the Beijing Olympics, Rector said.
Balla is not as optimistic. Born, raised and educated in Sudan, Balla has many personal ties to the country. “The government of Sudan deals economically with countries that are not interested whatsoever in human rights, even in their own countries. The Chinese are there for two things: profit and to meet their ever increasing demand of oil,” Balla said.
Pre-med sophomore Garrett Nelson thinks the media coverage on Africa as a whole is one-sided. “They only show you the worst of Africa: that it’s a horrible place and a lost cause,” Nelson said. “So, people just think that to help them, it won’t even matter, so why even bother?”
The U.S. has categorized the situation in Darfur as genocide, and in the three years since that recognition, little progress has been made. While bureaucracy is exhibiting its shortcomings in the case of the welfare of the Sudanese, it is up to the consumers to keep attention on the conflict and divest from socially irresponsible companies. But realistically speaking, change must come from countries supporting investment that furthers genocide in Sudan. The peace process in Darfur cannot begin until countries take a serious stance and work together in solving the conflict. And as Dr. Balla indicated, cutting corners will not accomplish this. “What I see is that the international community is hastily trying to find a solution,” he said. “They are trying to find an easy solution to a difficult problem.”

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