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Helping Darfur: Is Divestiture Really Effective?

Paul E. Gray

For more than three years the world has watched the developing horror in the Darfur region of Sudan. Militias, supported openly by the national government, have robbed, raped, brutalized and murdered the civilians of Darfur. Millions have been driven from their homes and hundreds of thousand have died. Relief efforts have been thwarted and there is widespread famine and malnourishment. The illegitimate, corrupt, duplicitous, genocidal government of Sudan continues to ignore the pleas and demands of the civilized world. The African Union peacekeeping force in Darfur is too small and too weak to inhibit the genocide. The Chinese government (which also has large investments in Sudan) continues, with characteristic insensitivity to human rights, to prevent the UN Security Council from taking stronger actions that would ameliorate the suffering.

What can be done to help the people of Darfur?

The Tech reports that both the Undergraduate Association and the Graduate Student Council have approved a joint resolution that urges the Institute to undertake “targeted divestment” of the securities of companies doing business in Sudan. Divestment in this context means selling stocks or bonds of target companies with the intent of depressing prices of those securities to such a degree that the affected companies would be forced to discontinue operations in Sudan, that is, to disinvest in that country. The comments that follow are based on my experiences with the divestment movement as it was expressed twenty years ago with reference to South Africa.

Is there any evidence that the strategy of divestment – qua divestment – works, that it produces changes in the country of focus?

The strategy was adopted in the 1980s by a majority of colleges and universities, including MIT. Also, some large pension plans and some other investment vehicles such as mutual funds participated. The securities of targeted companies trade almost 24/7 in markets accessible worldwide. I saw during those years no evidence that divestment per se on a reasonably large scale made any difference at all to the targeted companies, or to the country of South Africa.

About 200 US companies did close down operations in South Africa and leave during the 1980s. IBM, Eastman Kodak and General Motors are notable examples. The pressure of divestment did not drive these actions. The example I know best is Eastman Kodak. In the 1980s the Kodak CEO was Colby Chandler, an MIT alumnus. He met with me personally to explain their decision. Many towns and cities and some states were imposing restrictions on purchases of products made by companies with operations in South Africa. Churches and church organizations encouraged consumers to boycott the products of companies doing business there. These “people’s sanctions” had genuine power. The pressure of falling sales of commercial and consumer photographic products in the US caused Kodak to close all operations in South Africa. It is ironic that it took only a few weeks for Fuji Photo to fill the demand in South Africa created by the departure of Kodak. The net effect of Kodak’s action on that brutal government was nil.

If divestment in South Africa was an ineffective strategy for change, what led to the collapse of the government run by and for the benefit of the creators of apartheid, the release of Nelson Mandela in 1990, and the advent of democracy for all? I believe that the principal driving forces were the actions taken by the U.S. Congress (over the veto of President Reagan) and some European governments that prohibited loans to South Africa or to commercial enterprises there, as well as the “peoples sanctions” imposed in the US by local governments and by consumers.

Divestment alone is, in my view, a weak strategy for influencing a foreign government. Its value may be as an organizing idea that motivates individuals outraged by the persistent brutal, inhumane actions of that government to attempt to raise public awareness or consciousness of an insufferable situation to which many people in the US would otherwise pay little or no attention.

Are there other things to be done that might be effective in stopping the brutalization and murder? Reflect on the situation in the former Yugoslavia in the 1990s. The Serbs embarked on a program of “ethnic cleansing” in Kosovo in an effort to keep that province in the Serbian orbit. The outrage in the US and Europe over the killings in Muslim Kosovo led to a NATO campaign of airstrikes on Serbian infrastructure. Certainly many innocent Serbs died as a result, but the attacks caused the Serbian government to cease its genocide in Kosovo.

Is it possible that an unmistakable groundswell of outrage – a grass-roots insistence that the US government do something to stop the genocide – would cause our government, together with other civilized governments, perhaps under the umbrella of NATO, to take forceful action, as was done in Kosovo?

My personal view of that possibility is that the odds are against it. Nevertheless, energy expended in promoting divestment might have greater value if it were employed in a broader effort to engage the American public in support of more forceful means of ending the genocide in Darfur.

Paul E. Gray is Professor of Electrical Engineering and President Emeritus.