Thursday, February 2, 2023

The state of Michigan moves to divest from Russian businesses

March 21, 2022
<p>The state of Michigan has taken several measures to divest state money from Russian businesses and banks. </p>

The state of Michigan has taken several measures to divest state money from Russian businesses and banks.

Photo by Madison Echlin | The State News

Earlier this month, state Rep. Darrin Camilleri, D-Brownstown, introduced legislation to add Russia on to the list of nations in the Divestment from Terror Act.

The Divestment from Terror Act is a state law that was signed in by former Gov. Jennifer Granholm that prevents the state from making investments into banks and businesses that are based in countries that take part in state-sponsored terrorism.

The legislation was co-sponsored by 12 other legislators. Should it pass, Russia will join Cuba, Iran, North Korea and Syria as a part of this list.

“It's important that the entire world stands united behind Ukraine, against (Russian President Vladimir) Putin and his violent invasion of a sovereign nation,” Camilleri said. “It's an important principle for us to stand strong here at Michigan to do what we can to assist those efforts. One of those ways is to divest any assets that we have here in Michigan, from any Russian businesses.”

Camilleri said that the money that would be affected by the divestment would be around .06% of the $98 billion the state has invested in businesses around the world. While this is a small percentage, the amount comes to about $5.8 million.

“That’s a significant amount of money that we should be spending in companies or investments that we feel good about and not ones that we know are supporting a Russian autocracy,” Camilleri said.

Legislation cosponsor and state Rep. Ranjeev Puri, D-Canton Township, said that the state of Michigan divesting from Russian businesses is somewhat symbolic, but believes it is important to show the state is willing to do whatever it can to stand up for the people of Ukraine.

"If every state in the country did that, that adds up to become a significant amount of money," Puri said.

So far, 15 states have either introduced legislation or directed pension boards to divest any holdings in Russian businesses

This is not the only action that the Michigan government has taken to move dollars out of Russian businesses. After being called on to divest by Gov. Gretchen Whitmer, the State of Michigan Investment Board, in a unanimous vote, divested the State of Michigan pension plans from companies in not only Russia, but Belarus, too.

“Today the board decided this action is more than the right thing to do,” Board Chair Rachel Eubanks said in a press release. “We have directed the investment team to begin the divestment process. Any state assets that could be used to support and prolong Russian’s war against Ukraine runs contrary to the purpose of providing benefits to individuals who dedicate their professional lives to public service.”

None of the money that was in the state pension assets were Belarusian holdings, meaning that no money was divested from the country.

The divestment from the state of Michigan joins a list of other sanctions, levied by the United State and other western countries. The sanctions levied so far have been one of the heaviest sanction campaigns in history and are expected to put the Russian economy into a recession. The Russian ruble has now fallen in value so low that it is worth less than one U.S. cent.

This will not only have an impact on Russian President Vladimir Putin, but it will also take a toll on the Russian people. Unemployment in Russia is expected to skyrocket, with Al Jazeera reporting the unemployment rate is expected to increase 7% before the end of the year. The shrinking value of the ruble will cause issues with inflation, likely leading to scarcity in necessities like food and medicine.

“The intent of this bill is clearly tied to Vladimir Putin and Russian oligarchs,” Puri said. “Obviously the intent of this bill is not to come after the Russian citizens.”

The legislation, after being introduced by Rep. Camilleri, was referred to the Committee on Government Operations.

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