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For all the hypocrisy, divestment from Israel is still possible and essential to ending apartheid

America’s unconditional allegiance to Israel and the Arab disloyalty to Palestine have stymied real progress on divestments. Good actors elsewhere can make a difference.

February 2, 2024 at 5:40 pm

Pro-Palestinian protesters gather outside Houses of Parliament to demonstrate against the anti-boycott bill on its third reading that if passed by MPs would make it unlawful for public bodies to boycott Israeli companies on the grounds of ethical and human rights issues in procurement and investment decisions in London, United Kingdom on January 10, 2024. [Wiktor Szymanowicz – Anadolu Agency]

When the United States adopted a divestment act against South Africa in 1986, the anti-apartheid movement was already in its third decade. The federal level buy-in was pivotal to expediting the demise of the system.

Unfortunately, past precedent is not encouraging in the case of apartheid Israel. In stark contrast, state level anti-boycott laws in the US have been the biggest reason for the limited success of the Palestinian campaign for boycott, divestment and sanctions (BDS). Despite the official commitment to a two-state solution, the US is the only country in the world that does not consider Israeli settlements in the Occupied Territories to be illegal.

Coincidentally, the apartheid regimes in South Africa and Israel both started around the same time after the Second World War. But, unlike the South African anti-apartheid movement — which came about following the establishment of the United Nations Special Committee against Apartheid in 1962 — BDS, in the absence of similar international support for Palestine, started much later, in 2005, after the International Court of Justice (ICJ) declared the Israeli Separation Wall to be unlawful.

Almost two decades on, BDS has gained recognition but not much momentum. In fact, it has made more foes than friends, again primarily due to the fervent anti-BDS activism in the US. The Zionist lobby has so far effected anti-boycott laws in 34 states and prevented numerous attempts at divestment by endowed universities, churches and municipalities. (Notable exceptions where exclusionary policies have nevertheless passed are the Presbyterian Church and the United Methodist Church.)

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Public funds governed by these states are required to dump the stock of any companies refusing to do business with Israel. In Illinois, one of the earliest instances, $77 billion worth of assets held by state pension funds as of 2015 were affected. Incidentally, most of the ‘offending’ companies have been of European origin, as seen in this list compiled by the state of North Carolina.

Social justice paladins

While the US has been the bane of the Palestinian struggle for freedom, on multiple fronts, other big players have been stepping up. PGGM, the manager of the Dutch pension scheme for healthcare workers, divested from Israeli banks — all of which have a history of funding Jewish settlers — as early as 2014.

In 2021, the Norwegian Government Pension Fund, the world’s largest sovereign wealth fund, dropped two Israeli property and construction companies over their business in the occupied West Bank. In the same year, Norway’s largest pension fund excluded 16 companies linked to illegal settlements.

The United Nations database of companies involved in the persecution of the Palestinian people — although incomplete and now possibly discontinued after initial publication in 2020 — has set the stage for more potential exits by European funds given their proclivity for socially responsible investing.

Plenty of the ethically-agnostic kind, of course, go the opposite way, like the Swedish private equity EQT. But at least the right to boycott and divest is protected across the European Union, not assailed like in the US. Such tolerance by itself may embolden more investment managers to move funds away from high-risk companies — as all companies that deal with the occupation are — and jurisdictions.

On the spectrum of evils

Just as Europeans progress on BDS, the Arabs to the south regress. The wealthy Gulf states among them have gone to the other extreme, quietly pumping money into Israel, under the pretext of “normalisation” since the Abraham Accords of 2020. The long-standing boycott by the Arab League is no longer effective or in force.

Israeli commentators routinely dismiss BDS (on top of their casting it anti-Semitic as per their playbook), reassured by the seemingly unending inflow of funds. The financial daily Globes names Gulf countries as ready replacements for the Norwegians, should the latter move forward with more exits.

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The UAE, which owns the biggest sovereign wealth fund in the region, is the prime candidate with an already guaranteed investment fund of $10 billion in Israeli companies. Even Qatar, which is home to Hamas’s senior leadership, is putting money in startups with Israeli origins. Saudi Arabia has been more discreet, investing in American funds with Israeli holdings. Oman, the second largest Gulf nation by area, is about to change its boycott law against Israel.

Such a dramatic U-turn in policy might have a political explanation. There is a fairly entrenched view that the Arab leaders at large quietly wish for Hamas to be obliterated in Gaza, no matter the cost. And because they refuse to take any meaningful action against Israel — be it divestment, sanctions, an oil embargo or simple severing of diplomatic ties — resorting instead to meek condemnations and after-the-fact humanitarian responses, it is hard not to believe the insinuations that they seek to gain from the ongoing genocide in Palestine.

The way forward

Although Israel tries to make light of BDS, it is actually afraid of the movement going mainstream. Not only will it delegitimise the government’s apartheid regime, it will also arrest the momentum in occupation and violent displacement. Not least, being stripped of cash will leave unscrupulous Israeli businesses disillusioned with the belligerent far-right government.

Even with the US censure and the Arab disengagement, there remain enough good actors to pick up the slack on BDS. These principally are private funds around the globe with responsible investing mandates, but also without. For one does not need to formally subscribe to social investment to refuse to sponsor a genocide. There is hope more conscious investors will defund complicit companies and bring closer a South Africa-style ending to Israel’s occupation of Palestine.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.