After Russia invaded Ukraine last year, Minnesota lawmakers moved swiftly to divest state pension funds and other assets tied to Russia and Belarus.
Officials on Minnesota’s State Board of Investment now say the state’s holdings were worth far less than previously estimated. And while the SBI has sold off most of those assets, it’s had trouble fully divesting.
The SBI estimates that before the Russian invasion, in December of 2021, its funds with ties to Russia and Belarus were worth $240 million. Those assets included stocks, bonds and foreign currency. That was about 0.25% of combined funds at the time, a modest amount in the scope of the SBI’s work, which oversees more than $123 billion in assets, mostly money connected to pension and retirement funds for public workers.
The value of SBI’s estimated holdings dropped leading up to the invasion, but fund managers also sold a significant chunk of assets as the crisis began to build. But the value of remaining holdings dropped even further after the invasion. Legislators who supported the bill had initially expected the state’s relevant holdings to be worth $53 million. The value quickly plummeted in part because sanctions and lack of interest in Russian companies had caused their value to nosedive.
By early April, when the bipartisan law went into effect, the SBI estimated that its relevant Russian and Belarusian securities had a market value of only $3.6 million. The law did not target U.S. or Minnesota companies that simply do business or have ties with Russia.
Late last month, the SBI released a statement from Jill Schurtz, the executive director and chief investment officer, about its divestment efforts. Between April of 2022 and the end of the year, its liquidation manager sold some or all of 26 securities from its “divestment list.” But, at that point, 27 holdings remained on the divestment list, at an estimated value of $1.1 million.
[image_credit]Minnesota State Board of Investment[/image_credit][image_caption]The market values of assets on days noted by the Minnesota State Board of Investment staff[/image_caption]
Why do they have remaining assets? The SBI says its ability to sell the securities is “severely limited” because of trading restrictions that stem from economic sanctions.
“In particular, the market for Russian locally-listed equity securities remains effectively closed to U.S. investors,” Schurtz wrote. “Russian sanctions aimed at restricting foreign capital flows remain in place, and more recently, the market for most Russian government bonds has become restricted to U.S. investors.”
I am glad we have a plan to divest of these assets, but the big question that MinnPost refuses to ask is “What is the Biden plan for this war?”
The (so-far) bipartisan plan of the US government is to keep supporting Ukraine against the criminal armed forces of fascist dictator and war criminal Vladimir Putin until they are defeated. The amounts and resources dedicated to this end by the US have been quite minimal in the grand scheme of things. Only those with some level of sympathy for Putin’s Russia try to argue that the amounts spent to date are in any way consequential to the US Treasury, especially considering that defeating Putin’s militarist imperial aims is also vital to America’s national security.
Further, the “plan” for opposing Putin’s War of aggression rests not with Biden (or NATO or the EU), but with the democratically-elected Ukrainian government. Their goal is to defeat Putin’s criminal army and force it out of the territory of Ukraine. The goal is to win the war. Do you not support that “plan”? It seems clear enough.
So we fund this war by borrowing from China or printing money out of thin air?
Like most “conservatives”, you don’t understand how public finance works. And if China is such a committed adversary (as claimed by all “conservatives”), then why would they fund the government of their chief enemy? Especially a war of aggression they apparently support?