Mordechai Liebling: Why Divestment is Counterproductive

Divestment from Israel:
Why it is counterproductive as a strategy for peace

by Rabbi Mordechai Liebling

Within the last year, a number of Protestant denominations have committed themselves to using economic leverage to help resolve the conflict between Israelis and Palestinians. There have been scores of media headlines about "Protestants Divesting from Israel." The headlines from all points on the political spectrum are misleading and many of the efforts are misguided.

In July 2004, the Presbyterian Church USA (PCUSA) became one of the first institutional investors to consider divestment by ratifying the "phased, selective divestment" from companies profiting from Israeli policies that harm Palestinians. This process starts with shareowner dialogue with companies, escalates to a shareholder resolution if the company is unresponsive, and ultimately ends in divestment - literally, selling the shares it owns in that particular company - if the company refuses to change its policy.

One reason that this shocked the Jewish community is the relative obscurity, within the Jewish community, of the concept of "socially responsible investing." As defined by Joe Keefe of the Social Investment Forum, socially responsible investing (SRI) consists in the purchase of equity shares in corporations that meet certain baseline standards of social and environmental responsibility, and actively engaging these companies to become more responsible corporate citizens by, for example, dedicating a portion of assets to community economic development. In the mainline Protestant community nearly every institution with significant funds practices SRI - in sharp contrast to the Jewish community. The Interfaith Center for Corporate Responsibility (ICCR) is the primary faith-based organization focused on SRI, with 275 faith-based institutional members, only three of which are Jewish.

Mainline Protestant institutions routinely screen their investments. Screening typically means not investing in such industries as tobacco, weapons manufacture and gambling. Having already decided what not to invest in, they do not often engage in divestment activities. However, divestment is not unusual when a controversial issue arises in a company in which they already own stock. The preferred outcome is not divestment, it is the company changing its policies, but divestment is a last resort. A recent example of divestment efforts is the campaign against Unocal for its operations in Burma.

Protestant churches have not called for divestment from Israel, but from companies profiting from, or contributing to, the occupation. Many publications that support the Palestinian cause ran headlines about churches divesting from Israel to overstate support for their cause and to label Israel a pariah; many Jewish publications ran the same headline to instill fear in the Jewish community or to willfully misrepresent the position of these churches. Both sides chose to trumpet an exaggeration for political reasons. This does not contribute to dialogue or solutions. One problem with the nature of the divestment strategy is that it lends itself to this type of misrepresentation. The nuances are too subtle for a sound-bite culture and for a conflict in which opposing sides seek every opportunity to demonize the other.

All the Protestant churches in question are on record as supporting a two-state solution, and many have cited the Geneva Accords as a model. The question must be: does the strategy of divesting from companies profiting from the occupation bring us closer to or further from achieving this worthy goal?

Jewish Responses

It is highly significant that to date no Jewish peace group that supports a two-state solution - either in Israel or the United States - has come out in favor of divestment. Yossi Beilin is the Israeli architect of the Geneva Accords. This was his response when asked:

This is a big mistake.... What is important is not to punish Israel but to convey to Americans the alternative perspectives that exist both within Israel and within the American Jewish community: There is no substitute for efforts to find a peaceful solution. ...[Divestment] strengthens the argument of the right wingers that 'the whole world is against us' and hence that we need not listen to them.

Yariv Oppenheimer, the head of Peace Now, said:

We think divestment is not the right way to change the situation. If anything, it may have the opposite effect of the one intended. Israelis feel the entire world is against them, so the immediate response to such measures is always anger and mistrust; these will not convince Israelis that the occupation is a bad thing. For the churches to achieve their goals, they should engage in dialogue, not sanctions. Israel is a democratic country, and if the majority of people vote to leave the territories, that will be the policy.

Jewish groups in the US that support a two-state solution to the conflict mirror these views. The following are some of the reasons that pro-peace Jewish groups understand that a divestment strategy is a move away from peace:

1. Support by the Israeli political center is vital to the peace process. Divestment strategies lead to Israelis feeling more isolated and adopting a circle-the-wagons mentality; when they move to the right, peace is harder to attain.
2. If divestment succeeds in depressing the Israeli economy, it will lead to economic instability. Economic stability is a key to sustaining popular support for the peace process.
3. Trying to isolate Israel through economic means does not work. The Arab boycott, which lasted for nearly 50 years beginning in 1948, isolated Israel economically, making it impossible for Israelis to obtain everything from Pepsi to Japanese cars. It had little or no effect on the government's policies.
4. Divestment alienates the American Jewish community and moves them to the right. American Jews ask why churches call for sanctions on Israel but not on China, North Korea, Iran, Saudi Arabia, or any number of countries involved in human rights violations. American Jews see a divestment strategy as concerned with Palestinian security and lives while ignoring the lives and security of Israelis. Any US administration will need the support of the Jewish community to make strong peace initiatives. This community is already alarmed by the ferocity of the Israeli-Palestinian struggle, the unmasked, state-supported anti-Semitism of the Arab world, and the upsurge of anti-Semitism worldwide. Targeting Israel for divestment simply provides one more stumbling block to Jewish recognition of the legitimate claims of the Palestinian people for sovereignty and independence.
5. One-sided strategies like divestment have the effect of discrediting important and well-deserved criticisms of Israeli policies. They are all lumped together and dismissed.
6. The call for divestment is seriously straining relations between some churches and the Jewish community. This precludes any possibility of an interfaith peace coalition, which could be a positive factor in resolving the conflict.

In a recent column in the Washington Post, political analyst Colbert King wrote:

From where I sit, the Israel divestment debate is one of those wedge issues that the leaders of the mainline churches and the organized Jewish community need to dispose of quickly. If this divestment fight is allowed to percolate down into the pews and at the grassroots level, it could precipitate a rupture in Christian-Jewish relations that will set back the interfaith movement for years to come. Protestant Concerns

We need to ask why there is such a difference in perception about the wisdom of a divestment strategy between Protestants and Jews who support a two-state solution. One thing I have learned from this controversy is how poorly American Jews understand the Protestant connection to Israel. To begin with, more Protestants than Jews annually visit, "the Holy Land." Jews forget that Christians have a very deep tie to the land where Jesus was born, lived and died. Protestant churches routinely send missions to visit their Palestinian brethren. The denominations have churches in Palestinian territory that send regular communications about the hardships of occupation. Palestinian church leaders address national assemblies of American Protestant denominations. Personal relationships have developed that make this more than an abstract issue of justice.

This is heightened by an urgent concern about the precipitous decline in the Christian population within Palestinian areas - down to two percent. Denominational leaders publicly worry about the demise of a Christian presence in the Holy Land. They blame this drop on the continued violence and occupation. They have a deep, passionate interest in the occupation ending.

In addition, the churches are acting on the immediacy and importance of the Christian theological imperative to side with the suffering of those who are oppressed. The very visible and real suffering of the Palestinian people is heart wrenching. There is no question that this must end. It is critical, however, to acknowledge that Palestinian suffering will fully end only when there is peace.

Protestants came to advocate for divestment in response to the pleas of their Palestinian brethren and out of a feeling of complete frustration. They see that the situation of Palestinians has been deteriorating and that 30 years of resolutions by Protestant churches have changed nothing. Understandably they want to act, and the use of their investment portfolios to bring about change is, for them, a familiar form of action.

To further complicate matters, the divestment issue has become the lightning rod for deeper issues within and among Protestant denominations. Within many of the mainline denominations there has been a long simmering struggle between those who believe the church should be more activist on social issues (liberals) and those who believe the church should focused on teaching and spreading the Gospel (conservatives). To some extent this struggle is being played out in the divestment arena.

It is well known that there is a rift between the mainline and evangelical churches. The evangelical churches have been, by and large, supportive of Israel based on an ideology of Christian Zionism. They believe that God gave the land to the Jews and they support Israel's political right. The liberal Protestants don't embrace Christian Zionism and the divestment issue is another way of differentiating themselves from evangelicals. This split is even within some denominations. The net result is that politically right-wing Orthodox Jews are forming alliances with evangelical groups, while liberal Jews and Protestants are fighting each other over divestment.

The breadth of organizations in the Jewish community opposed to a divestment strategy is wide, from the far right to organizations in support of the Geneva Accords. There are a number of reasons for this:

1. The mention of the word, "divestment," immediately brings to mind the struggle against apartheid in South Africa; Jews have a deep visceral reaction to any analogy between the occupation and apartheid;
2. The progressive end of the Jewish spectrum doesn't think it will work, for the reasons cited above;
3. The right completely opposes its goals and can use it as a rallying cry;
4. Centuries of Christian anti-Semitism, coupled with the imbalance of many of the initial statements about divestment and the continued insensitivity to Israel's legitimate security concerns, leads many Jews to see this as conscious or unconscious anti-Semitism.

The divestment controversy has distanced potential allies, creating a large rift between the Protestant and Jewish communities, and diverted attention from Israelis and Palestinians. It has consumed a large amount of resources that might have gone to a more productive strategy. Arthur Waskow has suggested that a far better use of church resources would be to bring a Palestinian and an Israeli to congregations to explain the Geneva Accords and encourage lobbying Congress and the administration to support them. To date, the divestment effort has moved us further from the goal of bringing about peace.

Where To Go From Here

Christians and Jews who support a solution along the lines of the Geneva Accords must transcend this impasse and work together for a peaceful solution. Here are some suggestions:

1. Each group needs to affirm the legitimacy of the other's concerns and their commitment to two viable and secure states;
2. Churches need to make sure that their statements are balanced and reflect the need for both Israelis and Palestinians to feel safe;
3. Churches need to understand why divestment efforts will alienate the Jewish community;
4. Jews need to understand that support for church divestment efforts does not spring from deep-seated anti-Semitism, but from using a familiar tool to bring about peace and justice;
5. Jews need to understand the deep commitment on the part of many Christian institutions that their investments not profit from injustice;
6. Churches need to be willing to study and approach the current Israeli-Palestinian conflict in its long historical context, making every effort to insure that anti-Semitism is not playing a role - consciously or unconsciously - in their decisions;
7. Churches need to undertake a strategic assessment of the impact of the divestment effort;
8. Churches need to find ways to invest in peace, rather than divesting; Jews need to be allies in this effort;
9. Jews and Christians need to strategize together about how to move the peace process forward.

There is an important role for economic power in promoting peace. One of the essential principles of socially responsible investing is to use assets for positive ends. Christian and Jewish institutions need to creatively think about how to use assets to help bring about peace. We need to make investments or loans that will help create conditions for peace. Building a viable Palestinian economy is crucial for a peaceful solution.

The ongoing suffering and violence in Israel and Palestine needs to end. Actions that cause further divisiveness, mistrust and pain are not part of the solution. We can work together to develop positive policies and actions that contribute to the making of peace.

Rabbi Mordechai Liebling is the Torah of Money Director at The Shefa Fund, where he has organized the Jewish Shareholder Engagement Network. He has been active in Middle East peace work for over 25 years, and currently serves on the boards of the Interfaith Center for Corporate Responsibility and the Shalom Center.