Disinvestment
From Wikipedia, the free encyclopedia
- This article is about a form of political sanction. For the privatization of state assets in India see Privatization in India.
Disinvestment refers to the use of a concerted economic boycott, with specific emphasis on liquidating stock, to pressure a government towards policy or regime change. The term was first used in the 1980s, most commonly in the United States, to refer to the use of a concerted economic boycott designed to pressure the government of South Africa into abolishing its policy of apartheid. The term has also been applied to actions targeting Northern Ireland, Myanmar, and Israel.
Contents |
[edit] South Africa
The most frequently-encountered method of "disinvesting" was to persuade state, county and municipal governments to sell their stock in companies which had a presence in South Africa, such shares having been previously placed in the portfolio of the state's, county's or city's pension fund. Several states and localities did pass legislation ordering the sale of such securities, most notably the city of San Francisco. An array of celebrities, including singer Paul Simon, actively supported the cause.
Many conservatives opposed the disnvestment campaign, accusing its advocates of hypocrisy for not also proposing that the same sanctions be levelled on either the Soviet Union or the People's Republic of China. Ronald Reagan, who was the President of the United States during the time the disinvestment movement was at its peak, also opposed it, instead favoring a policy of "constructive engagement" with the Pretoria regime. Some offered as an alternative to disinvestment the so-called "Sullivan Principles," named after Reverend Leon Sullivan, an African-American clergyman who served on the Board of Directors of General Motors. These principles called for corporations doing business in South Africa to adhere to strict standards of non-discrimination in hiring and promotions, so as to set a positive example.
[edit] Northern Ireland
There was also a less well-publicized movement to apply the strategy of disinvestment to Northern Ireland, as some prominent Irish-American politicians sought to have state and local governments sell their stock in companies doing business in that part of the United Kingdom. This movement featured its own counterpart to the Sullivan Principles; known as the "MacBride Principles" (named for Nobel Peace Prize winner Sean MacBride), which called for American and other foreign companies to take the initiative in alleviating alleged discrimination against Roman Catholics by adopting policies resembling affirmative action. The effort to disnvest in Northern Ireland met with little success, but the United States Congress did pass (and then-President Bill Clinton signed) a law requiring American companies with interests there to implement most of the MacBride Principles in 1998.
[edit] Cuba
Though in place long before the term "disinvestment" was coined, the United States embargo against Cuba meets many of the criteria for designation as such — and a provision more closely parallelling the disinvestment strategy aimed at South Africa was added in 1996, when the United States Congress passed the Helms-Burton Act, which penalized owners of foreign businesses which invested in former American firms that had been nationalized by Fidel Castro's government after the Cuban revolution of 1959. The passage of this law was widely seen as a reprisal for an incident in which Cuban military aircraft shot down two private planes flown by Cuban exiles living in Florida, who were searching for Cubans attempting to escape to Miami.
[edit] Other Nations
Myanmar (formerly Burma) has also been the target of disinvestment campaigns (most notably one initiated by the state of Massachusetts), and in the mid-2000s Israel became the focus of such a movement, led by sympathizers with the Palestinian cause in the Middle East.
