Sudan Boycott Impact

Buenos Aires        A couple of weeks ago I was meeting with a woman in New York, who put down the phone to explain that she was just arranging “kidnap and ransom” insurance for the actress, Mia Farrow, who was preparing to leave with a delegation to Sudan to protest the genocide there.  I was fascinated by what the cost of such insurance might be and whether or not it made sense (about $4000 a year it seemed), and she was struck that Ms. Farrow with 14 children as dependents took the position that if anything happened to her, “leave her there!” 

    With an estimated 200,000 dead and 2,000,000 displaced, the situation is so horrible, stark, and inarguable that even President Bush calls it genocide and says that it must be stopped.  When we are all on the same side, I would have thought heaven and earth could have been moved, but as always, it is harder than it seems.

    The leverage point on the Sudanese government has been China and as always oil.  Farrow and others have been calling for a boycott of the Olympics in China to go at the national prestige that the country has attached to the event. 

    Reuters reported yesterday that the Sudan Divestment Task Force, headed by Adam Sterling, is claiming that an increasing number of companies is pulling out of the country.  The government argues that the disinvestment is arbitrary and is hurting the poor.  Sterling claims that over the last three quarters foreign direct investment has dropped to $700M USD per quarter, down from more than double that a year ago.  The semi-national oil companies of China and India are in the crosshairs here because they are involved in joint ventures with the Sudanese government to pull the oil out of the desert to meet their needs.

    The second richest man in the world, Warren Buffet of Berkshire Hathaway, also has a stake in the country via the oil industry, and though his name was dropped in the article there was no sign that he is under any specific pressure.  Yet!

    The situation in Sudan is not friendly to consumer boycotts, since they produce little.  If China were the target, consumers now would be essentially giving up everything, so perhaps a Sullivan style, South Africa-model corporate boycott has promise, but oil is a rough play for the big boys, even the ones with a shred of principles, since Iraq is now more an oil spill than a significant source, Iran is dodgy, the Saudi’s are prickly, and Venezuela is unpredictable. 

    Seems hard for many of these companies to put their foot down, when that same foot is already pressing the pedal to the metal to suck up every drop of oil they can find.  Nonetheless, pressure is building worldwide, and though Warren Buffet may be able to take the heat, China is too smart a country and too aware of its world image to let this situation go unchecked for too long now that the pressure is on.

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