Promises made by American states to withdraw from Russia are generally unfulfilled

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Last Updated on August 28, 2022 by Bitfinsider

Governors and other top state leaders in the United States made it plain that they wished to sever their financial links with Russia, motivated by moral outrage over Russia’s invasion of Ukraine earlier this year.

Several states swiftly adopted this strategy. Early in March, Idaho sold $300,000 worth of bonds in a Russian oil business. The Kentucky Teachers Retirement System sold its stock in the Russian bank Sberbank a day before the invasion.

But those are exceptional cases. According to an Associated Press review, state retirement administrators, and companies that manage state funds, the majority of the promises to stop investing in Russian companies — some made with great fanfare during news conferences — have not been kept six months into a war that has killed thousands of Ukrainians and forced another 12 million to flee their homes.

Russia’s economy has been largely cut off from the rest of the world as a result of quick global reaction. Due to this, divestment by state pension funds, university endowments, and other public-sector holdings, as well as private investments like those in 401(k) accounts, has become all but impossible.

The obstacles to divestment, according to Benjamin Smith, a spokesman for the Rhode Island Treasury, also demonstrate that efforts are being made on a global scale to isolate Russian President Vladimir Putin.

Any investments made in Russia before the conflict are now worthless or very nearly so. Some politicians and fund managers are now debating whether divesting is even required in light of this.

Gov. David Ige of Hawaii stated the state’s employee pension system has “very little to absolutely nothing” invested in Russia at a news conference on May 5. Hawaii is one of a small number of states whose top government officials have not pledged to divest.

Before Russia invaded in late February, many government-controlled investments only had modest interests in Russian investments, often less than 1% in all cases. However, even that might be millions of dollars.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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