Sudan and South Africa:
A Tale of Two Divestment Movements

         The relationship between United States investment in South Africa and apartheid is symbiotic. Profits are higher because apartheid encourages foreign investment. Foreign investment is good for the South African economy and encourages apartheid. The circle must be broken. –Joel C. Dobris (1985)ⁱ

         The time has come for divestment from companies doing business in Sudan.

         Last July Illinois required its public pension funds to sell the securities of companies doing business in Sudan. Since then, three states have followed suit, and another five seem likely to in 2006. Meanwhile, public and private college endowments from New England to California have ordered divestment.

         Many commentators have equated the Sudan and the South Africa divestments. In fact, the cases for the two are more different than similar. But those differences – in the countries involved, their economic importance and the nature of the conflict – only make imperative the case for Sudan divestment.

The Perpetrators

         A clear difference between the two divestment movements lies in their targets: the ultimate perpetrators and the types of companies doing business with them.

        Apartheid benefited a white ruling class that was western in ancestry but separated from former colonial influence, integrated into the post WW II global economy and vulnerable to the pressures of public opinion and trade sanctions, particularly with major trade partners like the UK, Germany and the US. Between one-third and one-half of the S&P 500 in 1980 did business of some sort in South Africa.

         In contrast, the Sudan regime resembles North Korea’s in its political and social insularity. Sudan is already cut off from much of the world’s economic activity. So, trade sanctions have much less prospect for success than they did with South Africa. Only oil and gum arabic give it global resource significance.

         Less than a dozen S&P 500 companies have a presence in Sudan. Most of the 130 or so publicly-traded companies doing business there are Asian. Their governance structures offer limited opportunities for engagement of the type and scale that characterized the anti-apartheid campaigns.

        Most significantly, even with former Liberian and Rwandan leaders facing prosecution for crimes against humanity, the Sudanese junta is so unfazed by the prospect that it does little to hide its ethnic cleansing.

        Hence, engagement of any sort holds little promise.

Conflict's Duration

        One argument often heard against Sudan divestment is that it’s coming too soon. After all, it took 15 years for South Africa divestment to become a serious option in the mid-1980s. And that arose after huge efforts had gone into coalition-building, education, corporate and endowment engagement, and the like.

        The time scales are different. Apartheid took its mature form in the early 1950s. It did not attract general concern in the West until the early 1970s, despite the writing of Alan Paton and the sermons of Bishop Trevor Huddleston. In 1994 after a generation of activism, apartheid ended relatively peacefully with democratic elections and a new Bill of Rights.

        In contrast, state-sponsored killing of its own people began in Southern Sudan about 22 years ago when civil war broke out. Today its focus lies in the western province of Darfur.

        But, the difference in durations loses meaning when one thinks of the relative brevity of Rwanda and the Balkans. It means nothing when one compares the causes of the South Africa and Sudan divestment campaigns.

Apartheid vs. Genocide

        At the state level, apartheid is to genocide as, at the individual level, discrimination is to murder.

        Apartheid and discrimination demand intervention and remedies. Genocide and murder command immediate intervention and justice. Neither has been forthcoming for the people of Sudan for 22 years.

        And hence the great difference between South Africa divestment and Sudan divestment: their objectives. In the South Africa campaign, the objective was to force internal reform through external pressure – financial, social, and moral...

        In the Sudan campaign, the objective is to mobilize governments and interested companies to stop the killing. No model suggests success in Sudan without extreme pressure on its government. Divestment is a significant part of bringing that pressure to bear.

Divestment Now

        So why divest companies in Sudan? Boston Globe columnist Alex Beam once wrote:

Sudan divestment will help keep the genocide ‘above the fold,’ which is where it should be.

        With South Africa – especially until the late 1980s, some argued in good faith that apartheid was a transitional stage that would wither away in the face of the liberalizing effects of capitalism and the world economy. One can’t make the same argument for genocide.

Endnotes

ⁱ Joel C. Dobris, “Arguments in Favor of Fiduciary Divestment of South Africa’ Securities”, 65 Nebraska Law Review 209, 223 (1985).

ii Alex Beam, "Deliver Us From Faraway Evil" Boston Globe, January 4, 2005, p. E1.