Forward Thinking

Presbyterians: Choose Impact Investing Over BDS

By Julie Hammerman

  • Print
  • Share Share

Members of the Presbyterian Church in Ohio attend a service in 2012 / Getty Images

Since the Presbyterian Church’s General Assembly convened in Detroit on June 14, attendees have been preparing to vote on a resolution to divest from Israel-related investments. If we can assume the goal of the Presbyterian Church is to promote peace between Israelis and Palestinians, attendees should consider a better alternative: Rather than divesting from Israel, they should invest in ways that can improve the situation.

Historically, divestment has been used by socially responsible investors, but it is not effective in promoting compromise between two parties. Instead, a popular new approach called “impact investing” holds much more promise. Impact investors see a challenge in the world, such as climate change or poverty, and proactively pursue investments that attempt to remedy the problem — for example, clean energy or microfinance.

The Israeli-Palestinian conflict is an enormous challenge, but so far investors have had very little positive impact on efforts to reach a peaceful solution. The divestment resolutions sponsored by the BDS (Boycott, Divest, Sanction) campaign damage any real prospects for peace. This one-sided approach targets Israel alone, despite the fact that both sides play a role in the prolonged conflict. BDS does nothing but exacerbate tensions, and creates a new avenue for non-military warfare between the parties instead of creating new avenues for cooperation.

Many BDS proponents are not peace activists seeking a negotiated agreement, but rather anti-Israel activists seeking the elimination of the Jewish homeland. Unfortunately some investors who genuinely want peace have become beguiled by the BDS campaign’s rhetoric.

Impact investing won’t satisfy those who seek Israel’s destruction, but for the subset truly seeking peace, impact investing is a more effective strategy. Investors can help lay the foundation for a sustainable peace and improve the environment for a negotiated political agreement. The private sector, with initiatives such as Breaking the Impasse, Beyond Aid and the Center for Jewish-Arab Economic Development, realizes that Israelis and Palestinians have much more to gain from cooperation than from confrontation.

Currently, there is a great disparity between the Israeli and Palestinian economies, with Palestinians facing 25% unemployment and a slowdown in growth as a result of a decline in international aid. Prospects for peace will only advance to the extent that investors can help grow the Palestinian economy and expand the middle class.

The Portland Trust, a British nonprofit, has researched conflict regions around the world to examine the positive impact provided by business and investment. They concluded that in Northern Ireland “economic discussions became a platform for political settlement and business organizations became a key lobby for peace.” However, in the example of Bosnia and Herzegovina “economic disparities and poor financial prospects endanger a fragile peace accord” and therefore “a strong post-conflict economy is essential for keeping the peace.” Similarly, the substantially weaker Palestinian economy hurts the Palestinian people, leads to despair and radicalization and threatens any future peace deal.

Impact investing creates jobs and strengthens the economic foundation of a future Palestinian state. And there are readily available options across asset classes for investors to consider.

On the private equity side, recently launched Palestinian funds include Siraj, Sadara and Abraaj. New initiatives such as the first eZone business incubator in Ramallah, the Arabreneur angel investor event, and the Palestine StartUp Cup all encourage entrepreneurship.

For public equity investors, the small Palestinian equity market and stock exchange is gaining global credibility, according to Sahem Trading, a Palestinian investment research firm in Ramallah. While there are currently no Palestinian mutual funds, the Rasmala Palestine Equity Fund will launch soon and invest in both public and near-IPO equities.

Rawabi, the first Palestinian planned city, is a green real estate investment and an example of Palestinian-Israeli cooperation. There are many more options available and a number in development, including a fund for Palestinian women entrepreneurs, crowd-funding platforms, exchange-traded funds and solar energy financing.

With the recent growth in Palestinian investment options, investors can help build an economic environment conducive to peace. But some investors still may be uncomfortable with any investment related to conflict or human rights concerns. But if they were to stay true to their values, investors divesting from Israel should also avoid Russia, China, Iran, Turkey, the United States, as well as the entire Middle East and most of Africa. For investors who realize the impracticality of negatively screening the overwhelming majority of companies and countries, impact investing in peace offers a more strategic option.

Strengthening the Palestinian economy and encouraging economic cooperation between Israelis and Palestinians can help lay the necessary foundation for peace to ensue.

Julie Hammerman is the founder of JLens and provides guidance to institutions and foundations on impact investing through a Jewish lens.

Permalink | | Share | Email | Print | Filed under: divestment, Presbyterian, Palestinian, Israel, BDS

The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.

Find us on Facebook!
  • What Thomas Aquinas might say about #Hamas' tunnels:
  • The Jewish bachelorette has spoken.
  • "When it comes to Brenda Turtle, I ask you: What do you expect of a woman repressed all her life who suddenly finds herself free to explore? We can sit and pass judgment, especially when many of us just simply “got over” own sexual repression. But we are obliged to at least acknowledge that this problem is very, very real, and that complete gender segregation breeds sexual repression and unhealthy attitudes toward female sexuality."
  • "Everybody is proud of the resistance. No matter how many people, including myself, disapprove of or even hate Hamas and its ideology, every single person in Gaza is proud of the resistance." Part 2 of Walid Abuzaid's on-the-ground account of life in #Gaza:
  • After years in storage, Toronto’s iconic red-and-white "Sam the Record Man" sign, complete with spinning discs, will return to public view near its original downtown perch. The sign came to symbolize one of Canada’s most storied and successful Jewish family businesses.
  • Is $4,000 too much to ask for a non-member to be buried in a synagogue cemetery?
  • "Let’s not fall into the simplistic us/them dichotomy of 'we were just minding our business when they started firing rockets at us.' We were not just minding our business. We were building settlements, manning checkpoints, and filling jails." What do you think?
  • PHOTOS: 10,000 Israel supporters gathered for a solidarity rally near the United Nations in New York yesterday.
  • Step into the Iron Dome with Tuvia Tenenbom.
  • What do you think of Wonder Woman's new look?
  • "She said that Ruven Barkan, a Conservative rabbi, came into her classroom, closed the door and turned out the lights. He asked the class of fourth graders to lie on the floor and relax their bodies. Then, he asked them to pray for abused children." Read Paul Berger's compelling story about a #Savannah community in turmoil:
  • “Everything around me turns orange, then a second of silence, then a bomb goes off!" First installment of Walid Abuzaid’s account of the war in #Gaza:
  • Is boredom un-Jewish?
  • Let's face it: there's really only one Katz's Delicatessen.
  • from-cache

Would you like to receive updates about new stories?

We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.