~Martin Luther King Jr.

Maladjusted: badly or unsatisfactorily adjusted, especially in relationship to one’s social circumstances, environment, etc.

~Entry from Urban Dictionary

Every society honors its living conformists, and its dead nonconformists (trouble makers). 

~Mignon McLaughlin

The year 2011 will be described in future as the year of the maladjusted nonconformist (a term coined by Martin Luther King). 2011 was the year in which a number of people who were tired of the status quo demanded freedom, justice, democracy and equality.

The flames of the protest fire, which started in Tunisia in January 2011, gradually spread to the four corners of the world, with new protest movements springing up on a monthly basis throughout the year. In February 2011, Egyptian protesters succeeded in removing Egypt’s President Mubarak from office. In March 2011, there was an intensification of the protest against Syria’s President Assad. The commencement of the Slutwalk protest march in Toronto Canada in protest against the excusing of rape against women began in April 2011. It was Spain’s turn in May 2011 as protesters started the Los Indignados march to protest against the deteriorating economic climate.

In September 2011, the Occupy Movement, which is a movement protesting against economic inequality, corporate greed and the influence of money in politics started in New York and has since spread to over a thousand cities around the world. The prevalence, intensity and focus of these protest movements culminated in the Times Magazine naming ‘The Protester’ as its 2011 Person of the Year.

I have decided to write this paper about the maladjusted nonconformist for two reasons. First, since maladjusted nonconformists are often misunderstood and disrespected, I would like to highlight the role maladjusted nonconformists play in society. Second, I am writing this paper to encourage people to become maladjusted to the status quo whenever it threatens justice, equality and freedom.

Who are the maladjusted nonconformists? What is the philosophy/motivation of maladjustment nonconformism? Why are they misunderstood and vilified? What are the myths about the maladjusted nonconformists? What role do they play in society?

The maladjusted nonconformist is a dissenter who disagrees and challenges a well-established and accepted political or social order, which though detrimental to the society is accepted by the majority population. The maladjusted nonconformists comprise of people across the gender, age and religious divide. The overriding theme of maladjustment non-conformism is to see a change in the status quo for the benefit of society. Maladjusted nonconformists adopt a range of methods to achieve their objectives including but not limited to marches, art, writing, music, hunger strikes, petitions etc. For the purpose of this paper, I am focusing on nonconformists that adopt non-violent methods of challenging the status quo, as I believe that peaceful means are the most effective way of bringing about meaningful change. The maladjusted nonconformists are individuals who refuse to be adjusted to certain things, which they perceive as unjust. Examples of themes, which they tackle include issues like racism, economic inequality, repressive political regimes, war, breach of civil and human rights, gender inequality etc.

The job of a maladjusted nonconformist is a thankless exercise, which is risky as it could result in the loss of a job or career, imprisonment, beating, ridicule and at the very extreme – death. Furthermore, the causes that the nonconformists fight for are sometimes not achieved in their lifetime. For instance, the causes that Malcolm X, Steve Biko and Martin Luther King fought for were only fulfilled after their deaths. Despite the odds of not succeeding in their struggles or the threats to their life, health or career, the nonconformists still carry on their fight. Why?

Because behind every maladjusted nonconformist is a cause that he or she strongly believes in. They visualise a future that is better than the current order and this drives them to resist the old order and make their voices heard. The Occupy Movement protesters believe in a cause that will result in economic justice and responsible government and this has made them stand their ground irrespective of the risk of arrest, pepper spray or cold from sleeping outside in winter; Sojourner Truth believed in the cause of women rights and the abolition of slavery; John Wesley, the Methodist founder believed in the cause of getting the Gospel message preached to working class people who at the time were frequently excluded from entering churches.

The maladjusted nonconformist believes that in the long run the cause that he or she fights for will prevail despite the odds. Martin Luther King summed up this feeling when he said, “when our days become dreary with low-hovering clouds of despair, and when our nights become darker than a thousand midnights, let us remember that there is a creative force in this universe, working to pull down the gigantic mountains of evil, a power that is able to make a way out of no way and transform dark yesterdays into bright tomorrows.” They are convinced that even if justice is not achieved in their lifetime, it will be achieved in the future and that the ongoing oppression will cease.

They have a good understanding of the concept of status quo. While they recognize that the existing state of affairs should not be opposed if it is working right, they know that very often people and societies get adjusted to the state of affair and complacency sets in when the status quo remains unchanged for a long time. The static nature of the status quo eventually leads to misalignment; however as maladjusted individuals, nonconformists are more likely to identify these misalignments. Upon identification, they effect the necessary protests to align the misalignment and reset the status quo.

The maladjusted nonconformists understand that the oppressor will not grant the oppressed their demand without a struggle on the part of the oppressed. They appreciate that ‘Pharaoh will not release the Moses led Israelites’ without a demand and battle. Fredrick Douglas, the civil rights leader caught it years ago when he said, “power concedes nothing without a demand. It never did and it never will.” It is for this reason that the maladjusted nonconformists are very persistent and do not give up.

Despite the sincere intentions of the maladjusted nonconformist, they are often vilified by government officials, mainstream media, the elites and some sections of the general public. Dissenters are frequently described as scumbags, troublemakers, lazy, jobless, attention-seekers, weird and communists. In other instances, they are beaten up, arrested or even killed. John the Baptist had his head cut off for rebuking King Herod for taking his brothers wife; Fela Anikulapo Kuti, the Nigerian musician was arrested and beaten several times for voicing his opposition to the military junta; a number of Occupy Movement protesters have been pepper sprayed, beaten and arrested.

The maladjusted nonconformist is often vilified by three sets of people. The first group are those that benefit from the existing order, which the dissenters are challenging. The second group of vilifiers are those who are resistant to change. Although they may not benefit from the status quo, however, they view those challenging the status quo negatively because they see the challenge as a threat to their stability.  The third set comprise of those who adopt a Social Darwinism approach towards the status quo. They believe that even if the status quo is unjust, only the ‘fittest ‘ will survive such environment. They regard nonconformist who want to change the status quo as weak and lazy. These are the people who will make remarks like “why are you resisting income inequality or racism afterall, if you work hard then you will not need to bother about these issues?”

A number of myths prevail regarding the maladjusted nonconformists. They are described as troublemakers who disturb the public peace. A critical examination of this myth would reveal that maladjusted nonconformists are not disturbers of public peace but instead are people who are working towards bringing about a more sustainable peace via the demand for justice. An examination of the winners of the Nobel Peace prize reveals that a number of the winners were maladjusted nonconformists who were once described as disturbers of peace. Nobel peace laureates such as Albert Lutuli, Martin Luther King, Desmond Tutu, Aung San Suu Kyi, Nelson Mandela, Liu Xiaobo and Tawakel Karman were tagged as troublemakers by the beneficiaries of the challenged status quo.

The maladjusted nonconformists are also described as attention seekers, selfish and demagogues. This description is unfair as dissenters are actually fighting for causes in which they bear all the risk, while the reward for victory is enjoyed by the society.

Many of the liberties we enjoy today are as a result of the efforts of a number of individuals and organisations that chose to challenge the status quo in order to make the world a better place. These people who have stood up to say ‘enough is enough’ might be the minority, but without their efforts, the world we live in would have been a different place.

The pages of history are full of stories of men and women from various fields of endeavour who chose to be maladjusted nonconformist to the prevailing status quo of injustice, oppression and discrimination.

In education we learn that Mary Tape, a Chinese immigrant was a maladjusted nonconformist to the status quo of educational segregation in America, “Is it a disgrace to be born a Chinese? Didn’t God make us all?”; in boxing, we learn that Mohammed Ali was a maladjusted nonconformist to the status quo of the support of America’s war in Vietnam when segregation prevailed in the USA, “No, I am not going 10,000 miles to help murder kill and burn other people to simply help continue the domination of white slave masters over dark people the world over.”; in religion, we learn that Martin Luther, the reformist was a maladjusted nonconformist to the status quo of the abuses of the Catholic church, “I neither can nor will retract anything for it cannot be right for a Christian to speak against his conscience.”; in international diplomacy,  we learn that Eleanor Roosevelt was a maladjusted nonconformist to the status quo of war, “I can not believe that war is the best solution. No one won the last war, and no one will win the next war.”; in music we learn that Fela Anikulapo Kuti was a maladjusted nonconformist to the status quo of military rule in Nigeria,  “Zombie no go turn unless you tell am to turn, Zombie no go think unless you tell am to think.”; in athletics, we learn that Tommie Smith was a maladjusted nonconformist to the status quo of racism, “If I win I am an American, not a black American. But if I did something bad then they would say ‘a Negro’. We are black and we are proud of being black”.

In conclusion, since we are all beneficiaries to some of the privileges in our world due to the risks taken by the maladjusted nonconformists throughout the passage of time, we have a moral responsibility to speak up when we see things in our world that are not the way it should be, even if it is against popular opinion. We also owe it to the unborn generation to ensure that they come to a world in which they would not experience the injustice that this present generation faces. Although we should be adjusted conformists to the troika of equity, peace and justice, however, we should be maladjusted nonconformists to the troika of injustice, oppression and inequality.

Selah.

Ahmed Sule

December 2011

23 November 2011: 8:50 pm

 using the following terms:

Baroness Flather Racism – 4,570 results

Luis Suarez Racism - 451,000 results

David Starkey Racism - 521,00 results

John Terry Racism – 2,950,000 results

Sepp Blatter Racism - 3,900,000 result

Introduction

With the fourth year of the global financial crisis gradually approaching, unemployment remains at elevated levels in the UK; at the same time the British government is undergoing a significant deleveraging process to cut the deficit as evidenced by the increase in VAT, cuts to government jobs and welfare benefits. With the citizens facing unprecedented hardship, England has become more inward looking. Politicians and the mainstream media have also been increasing the tone of the rhetoric’s on immigration and immigrants. These events and actions have had the unintended consequence of exacerbating racial tensions in England.

2011: A Racially Charged Year

The year 2011 was one of the most racially charged years in England, as racial controversies were openly displayed in the public arena in such domains as sports, academia, politics, media and the cyberspace. A month hardly went by without a significant racial incident occurring in the public arena.

In March 2011, at the Emirates Stadium, a banana was thrown on to the pitch shortly after the black Brazilian player Neymar scored his second goal against Scotland; in April 2011 during a Champions League football match between Real Madrid and Tottenham, which took place at White Hart Lane; some of the Tottenham fans racially abused Emmanuel Adebayor. The fans sang an offensive song directed at Emmanuel singing, “Your dad washes elephants, your mother’s a whore.” According to Lord Ouseley, the chairman of the anti-racist campaign group Kick It Out “the words were a slight on his (Adebayor’s) African heritage.” In May 2011, London School of Economics lecturer Satoshi Kanazawa published an article in ‘Psychology Today’ in which he argued that black women are significantly less attractive than women from other races. In August 2011, David Starkey said on BBC Newsnight that some white individuals have now copied the ‘destructive and nihilistic culture’ of the black race; while in September 2011, Baroness Flather, the Tory life peer argued on radio that most Nigerian men marry many wives because they are lazy.

In October 2011, Patrice Evra, the Manchester United defender accused Liverpool’s striker, Luis Suarez of making a racist remark during a football match between the two clubs. In the same month, TV footage appeared to show John Terry (Chelsea and England captain) calling Queen Park Rangers (QPR) player, Anton Ferdinand a “fucking black cunt” during a match between Chelsea and QPR. In November 2011, when FIFA President was asked for his comments on the two racial incidents involving John Terry and Luis Suarez, he argued that racism in football does not exist and that instances of racist abuse on the pitch should be settled by a ‘handshake’. Within the cyberspace, two teenagers also posted a comment on Newcastle United’s Sammy Ameobi’s Twitter account writing “Your hand is nearly the same colour (as your boots) nigger”; while Sunderland striker Fraizer Campbell was sent a racist message on Twitter with the message “big fucking nigger.”

One however needs to bear in mind that these incidents are high profile controversies involving high profile individuals and that for every one of these incidents, there are probably thousands of other incidents that go unnoticed in the classroom, offices, parks, playgrounds and entertainment venues.

Varied Reactions

A critical examination of these racial incidents would reveal that the reactions from the media, public, commentators, regulators and government officials vary from case to case. In some instances such as the incident involving Luis Suarez, the Football Association (FA) has punished him for his actions. The John Terry case though widely reported has not generated significant calls for his removal from the England squad unlike the numerous calls for Sepp Blatter’s resignation over his ‘handshake’ solution to on-the pitch racial incidents. Baroness Flather’s comments about Nigerian men went unnoticed, while her party (Conservative) is yet to call her to order for her comment. The police investigated Sammy Ameobi and Fraizer Campbell’s case, although the controversies were under-reported.

A Racial Reaction Model (RRM)

Why are some of these racial incidents under-reported while other racial controversies are widely covered? Why are there calls in some of these racial incidents for the perpetrator to be punished, while in other instances such calls are absent? Is there a model that can predict the likely response in terms of coverage, calls for punishment and emotional reaction towards these racial controversies?

In this section, I develop a model, which could help in understanding and predicting the possible reactions from the media, public, commentators, regulators and government officials in relation to racial controversies occurring in the public arena.

In his book Manufacturing Consent, Noam Chomsky introduces the term of worthy and unworthy victims in relation to the propaganda system, which he developed in his book. According to Noam Chomsky “A propaganda system will consistently portray people abused in enemy states as worthy victims, whereas those treated with equal or greater severity by its own government or clients will be unworthy.” For the purpose of this study, I will be borrowing the terms ‘worthy’ and ‘unworthy’, in relation to the major players within these racial controversies, however it would be used in a different context.

The Racial Reaction Model is based on four variables namely

• Worthy Victim(s) of racism: is an individual or group of people or institutions that have been subjected to racial abuse and who are viewed approvingly by the media or public or government due to characteristics such as fame, country of origin, beauty, influence, affiliation and authority.

• Unworthy Victim(s) of racism is an individual or group of people or institutions that have been subjected to racial abuse and who are not viewed approvingly by the media or public or government due to characteristics such as fame, country of origin, beauty, influence, affiliation and authority.

• Worthy perpetrator is an individual or group of people or institutions that commits a racial abusive act on a third party and who is/are viewed approvingly by the media or public or government due to characteristics such as fame, country of origin, beauty, influence, affiliation and authority
• Unworthy Perpetrator(s): is an individual or group of people or institutions that commits a racial abusive act on a third party and who is/are who are not viewed approvingly by the media, public, government or regulators due to characteristics such as fame, country of origin, beauty, influence, affiliation and authority.
  
  Table 1: Racial Reaction Model

  	Unworthy Victim(s) of racism	Worthy Victim(s) of racism
  Worthy Perpetrator(s)	Limited/Great media coverageLess emotional reaction Lack of calls for justice Perpetrator often goes unpunished	Greater media coverageHigh emotional reaction Increase call for justice Or Limited coverage Less emotional reaction Lack of calls for justice
  Unworthy Perpetrator(s)	Limited coverage Less emotional reaction Lack of calls for justice Perpetrator is punished	Greater media coverageHigh emotional reaction Increase call for justice Perpetrator punished

  The Racial Reaction Model (RRM) identifies four possible racial controversies that often takes place within the British public arena.

a)     A racial controversy involving a worthy perpetrator against an unworthy victim of racism: This is shown on the top left quadrant of Table 1. In this situation, the media coverage could be widely covered depending on the severity of the racial incident, in other instances, the event may not be widely covered. There would be very few calls for the worthy perpetrator to be punished for his or her actions. Very often, the worthy perpetrator would go unpunished. Examples of this type of controversy include the John Terry/Anton Ferdinand, David Starkey/Black Culture and the Baroness Flather/Nigerian men racial controversies.

b)    A racial controversy involving an unworthy perpetrator against a worthy victim of racism: This is shown on the bottom right quadrant of Table 1. This controversy generates the highest degree of reaction. The media would give significant coverage to the controversy. There will be calls from the public for the perpetrator to be punished, while very often, government officials will wade into the debate. Due to the coverage and public reaction, the perpetrator is likely to be punished for his actions. Examples of this type of controversy include the Jade Goody and Shilpa Shetty Big Brother race row and the Sepp Blatter ‘handshake’ saga.

c)     A racial controversy involving an unworthy perpetrator against an unworthy victim of racism: This is shown on the bottom left quadrant of Table 1. Since this controversy involves two ‘unworthy’ individuals, it is likely to be under-reported in the media and to generate limited public emotional reaction. It would be up to the victim to ensure that the perpetrator is punished. Examples include the Luis Suarez/Patrice Evra, Sammy Ameobi and Fraizer Campbell Twitter race row.

d)    A racial controversy involving a worthy perpetrator against a worthy victim of racism: This is shown on the top right quadrant. This case is extremely rare, but if it does happen, the reaction and coverage could be either subdued or aroused.

In the next section, I will test this model with some of the past racial controversies.

Case Studies

Worthy Perpetrator Vs Unworthy Victim of Racism

John Terry/Anton Ferdinand: As explained earlier, during a football match between Chelsea and QPR, the TV footage showed John Terry mouthing what many have described as racial obscenities at Anton. John Terry according to the RRM model would be described as a worthy perpetrator for several reasons. He is the captain of England’s football team. He is also the captain of the Chelsea football team and he plays for one of the strongest and richest clubs in the world. He is one of the most influential players in the UK and is highly remunerated and has millions of fans all over the world. Anton on the other hand, does not enjoy such prominence as John Terry. Anton plays for one of the lesser-known premiership clubs.

This controversy has been given significant coverage in the press. This is due to John Terry’s prominence and the severity of the racial abuse. John Terry is currently under investigation by the FA and the police, however he still continues to captain and play for the English and Chelsea football team. The reaction from the public has not been severe. There have been very few calls for his resignation as captain, even though he is to be charged by the Crown Prosecution Service. The general attitude is a ‘lets wait and see / innocent until proved guilty’ approach.

Baroness Flather/Nigerian men: During a BBC Radio programme on polygamy, a Nigerian caller phoned in and stated that his father had four wives and that they all lived together without arguments. Baroness Flather, responded saying, “Most of the men in Nigeria don’t do anything; their wives do all the work, that’s why they have so many. They have four wives – one to do the farming, one to look after the children, one to look after the man and one to do the housework. It is just a fact.” Her comment was not given much coverage in the media, neither was Baroness Flather called to order by the Conservative Party.

The reason for this response is because Baroness Flather fits into the description of a worthy perpetrator. She has been a life peer of the Conservative party for over twenty years. Furthermore, Nigeria is not an important trading partner of Britain, so any detrimental comment about Nigeria or its citizens would not elicit a strong reaction from the British political class. Furthermore, a Nigerian in the England is likely to be an immigrant in England. Thus the Nigerian men fit the unworthy victim of racism description.

Unworthy Perpetrator vs. Unworthy Victim of Racism

Sammy Ameobi and Fraizer Campbell Twitter race row: The racial insults directed at Sammy and Fraizer on twitter was barely reported. This is due to the fact that they play for two of the lesser-known Premiership Clubs and are not high profile footballers.

Unworthy Perpetrator Vs. Worthy Victim Of Racism

Sepp Blatters’s Handshake Comment: During an interview with Al-Jazeera, Sepp Blatter, the FIFA President was asked about his view on the alleged racial controversy in the English league involving John Terry and Luis Suarez. Sepp Blatter responded by stating that football does not have a problem with racism on the field and when such incidents occur, it should be settled by a handshake. Blatter’s comments created a backlash in England with the media, regulators, public and government officials in England condemning him. Below is a summary of the backlash in England resulting from Blatter’s comments:

• Sepp Blatter’s comment was the headline news on BBC and Sky News and his comments was relayed on television continuously for days.
• The following day all the press reported on Sepp Blatter’s comment. Here are some of the headlines: “Yes, Sepp Blatter is a clown… But he’s dangerous with it. Kick him out”- Daily Mail; “FIFA chief Sepp Blatter’s sick stunt Tokyo Sexwale”- The Sun; “Sepp Blatter is the Benny Hill of football… and the joke’s wearing thin”- Daily Mirror;
• The UK Sports minister Hugh Robertson called for Sepp Blatter’s resignation. Gordon Taylor the Professional Footballers’ Association chief executive also called for Blatter’s resignation.
• Sol Campbell, the former Arsenal defender was interviewed on BBC News night programme to air his views on Sepp Blatter’s controversial comment.
• Prime Minister David Cameron backed Hugh Robertson’s call for Sepp Blatter to resign. Cameron said, “It’s appalling to suggest that racism in any way should be accepted as part of the game. A lot of work has gone into ridding racism from all aspects of our society, including football. As many of our top sports stars have rightly pointed out, now is not the time for complacency.” Ed Miliband, the opposition leader remarked, “I think Sepp Blatter’s comments are a disgrace frankly and I think that football needs new leadership. I don’t think he has shown in the remarks he has made recently, or indeed his record, that he can provide that leadership for world football.”
• The 20 Premier League clubs also issued a statement condemning Sepp Blatter.
• The Guardian Newspaper reported “While Sepp Blatter’s suggestion that racism was not an issue in football has been met with widespread scorn in Britain, the reaction across the rest of Europe has been more understated. While various British news websites have led this morning with calls for the Fifa president to resign, in countries such as Spain and Italy his comments are reported sparingly, if at all.” The Guardian’s editorial on 18 November 2011 called for Sepp Blatter to resign.
• Neil Warnock, the Queens Park Ranger’s manager (where Anton Ferdinand plays) called for every black player to boycott the next international matches. He stated “The only way to get FIFA president Sepp Blatter to resign after his controversial comments about racism is if every black player boycotts the next round of international matches”
• Marina Hyde of the Guardian wrote an article titled “This Sepp Blatter racism row shows England’s morals are better than its football.”
• The Labour MP, David Anderson, proposed to table a motion in the House of Parliament demanding Mr. Blatter to resign over comments made on racism in football.

When one takes into consideration that Sepp Blatter’s unwise and controversial comment was made in response to the John Terry racial controversy, one wonders why the backlash against Blatter was so severe in England, while such backlash has not been directed at John Terry. Politicians such as David Cameron, Ed Miliband and other members of Parliament who were silent when black Africans were killed in Libya by the National Transition Council forces suddenly found their voices to condemn the comments made by Sepp Blatter. Within a moment, England suddenly became a champion for racial justice.

The answer to the reason for the backlash targeted against Sepp Blatter can be found in the Racial Reaction Model. According to the RRM, a racial controversy, which involves an unworthy perpetrator targeting a worthy victim, would be subject to greater media coverage, high emotional reaction and increased calls for the perpetrator to be punished. In the Sepp Blatter ‘handshake row’, Sepp Blatter is the unworthy perpetrator of racism, while English football is the worthy victim of racism.

What makes Sepp Blatter an unworthy perpetrator? In 2010, BBC relayed a documentary three days before the FIFA executive committee was to issue their final verdict on England’s 2018 World Cup bid. The documentary investigated the corruption within the top hierarchy of FIFA. There were fears that the documentary could harm England’s world cup bid. A few days after the documentary was relayed on TV, England lost the bid to host the World Cup as FIFA awarded the hosting rights to Russia despite England presenting what was described as the best bid presentation and sending a high profile delegation including Prime Minister David Cameron, Prince Williams and David Beckham. Shortly after the humiliating defeat in which England received just two votes, the England World Cup bid leadership team announced that FIFA members had reneged on commitments given in the build-up to the vote. There were also suggestions that officials from other countries bribed the FIFA officials.

Sepp Blatter, then came out accusing England of being ‘bad losers’ saying “to be honest, I was surprised by all the English complaining after the defeat. England, of all people, the motherland of fair play ideas. Now some of them are showing themselves to be bad losers. You can’t come afterwards and say so and so promised to vote for England. The results are known. The outcome came out clearly.” This response did not go well in England thereby leading to an ongoing war between Sepp Blatter versus the English press, public, politicians and football hierarchy.

Rather than address the issue that resulted in Sepp Blatter making his silly comment about the handshake, the media, politicians and football authorities have diverted attention to Sepp Blatter. John Terry continues to play and captain the English team and racism in English football and England is on the ascendency. The right thing to do should have been to strip John Terry of his captaincy until the FA has conducted its investigation and given it’s ruling. Furthermore, the FA should set up an enquiry to focus on racism in English football.

Conclusion

In conclusion, for the last vestige of racism in this society to be eradicated, the media, public, regulators and government would have to adopt a consistent approach towards tackling racism irrespective of whether the victims or perpetrators of racism are worthy or unworthy. I strongly believe that if the energy spent on attacking Sepp Blatter for his controversial comment on racism was applied to other instances of racism in this society, racism will become a thing of the past.

Selah.

24 November 2011

by Ahmed Olayinka Sule, CFA

suleaos@gmail.com

http://about.me/ahmedsule

The scroll of the prophet Isaiah was handed to him. Unrolling it, he found the place where it is written:

“The Spirit of the Lord is on me, because he has anointed me to preach good news to the poor. He has sent me to proclaim freedom for the prisoners and recovery of sight for the blind, to release the oppressed, to proclaim the year of the Lord’s favor.” Then he rolled up the scroll, gave it back to the attendant and sat down. The eyes of everyone in the synagogue were fastened on him, and he began by saying to them, “Today this scripture is fulfilled in your hearing.” – Luke 4: 17- 21.

The Federal Government of Nigeria (FGN) recently announced its intention to remove subsidy from the price of fuel from next year. The existing fuel subsidy has enabled millions of Nigerians to have access to petroleum products at a fairly reasonable price. According to the FGN, the subsidy removal would save the country billions of dollars, thereby freeing funds for investment in the oil sector. This proposal from the government has generated numerous debates, strong reactions and commentaries by labour unions, financial analysts, business communities, NGO’s etc.

The Christian Association of Nigeria (CAN), an umbrella organization of the various Christian denominations in Nigeria, has stepped into the debate. The CAN under the leadership of Pastor Ayo Oritsejafor has expressed its support for the removal of the fuel subsidy and called on Christians and Nigerians to support President Jonathan Goodluck. Pastor Oritsejafor indicated that although the removal of the subsidy will be a difficult pill to swallow, the government must convince Nigerians that the gains from the subsidy removal will be used to the benefit of the masses.

According to a Pew Research Center report, almost 80 million Nigerians are Christians.  As an umbrella organization for the Christian community, CAN is often viewed as a representative of the voices of 80 million Christians. If the CAN leadership is expressing its support for the removal of oil subsidy, can it really be said to be representing the best interest of at least 80 million Nigerians? With almost 64 per cent of the population living below the international poverty line of US$1.25 per day, one wonders how the church leadership has arrived at a conclusion that we should support the removal of the fuel subsidy in Nigeria, which is more likely to push millions further down the poverty line, as it could worsen the twin impact of inflation and unemployment currently plaguing the Nigerian masses.

In the past decades, the Nigerian Government has been gradually lifting the subsidy on oil, often citing that the subsidy removal would benefit the citizenry, however, these so-called benefits are yet to accrue to the Nigerian masses. As Nigeria does not have adequate social safety nets, the fuel subsidy is one of the very few avenues in which the masses benefit from the ‘national cake’.

In this article, I will not be addressing the economics of the proposed fuel subsidy removal, but will detail my thoughts on the attitude of the Nigerian Church leadership in the fuel subsidy debate.

The Nigerian church leadership is characterized by its apathy and silence on issues that negatively affect the vast majority of Christians and other Nigerians. With the exception of a few leaders, the church aristocracy has failed to speak up on issues such as child abuse, poverty, violence, declining health standards, corruption and government policies, which continue to push us deeper into the poverty line. With the Nigerian church leadership backing the FGN on the removal of the fuel subsidy, this now represents a new shift by the leadership from apathy to support for policies, which continue to undermine millions of Nigerians. Has the church leadership now transformed itself from being an apathetic Saul of Tarsus watching the authorities stone the Nigerian masses with the pebbles of corruption, oppression and deception, to an enthusiastic Delilah of Philistine prostituting with the authorities to shave off the locks of the Nigerian masses with the clippers of poverty and injustice?

What are the possible factors contributing to the Nigerian church leadership’s apathy towards the plight of the Nigerian masses? Why does the Nigerian church leadership support government policies, which are detrimental to the poor people of Nigerian society? Why doesn’t the Nigerian church leadership stand up for the rights of the poor and those at the margin of society? There are three possible factors namely a) closeness to the power structure b) widening wealth gap between the Clergy and the congregation c) straying away from the teachings and lifestyle of Jesus Christ.

In biblical times, there were engagements between the religious leadership and government authorities, however government officials did not often influence the religious leaders. The religious leaders spoke up when their followers were persecuted, when their beliefs were jeopardized or when God’s commandments were disobeyed. From Scriptures we learn how Moses stood up to Pharaoh when he refused to let the Israelites go free; we learn how John the Baptist rebuked King Herod for taking his brother’s wife; we learn how Samuel confronted Saul when the latter disobeyed God’s command. Unfortunately, in Nigeria as a number of church leaders have gained access to government officials, they have not used this access to fight for the cause of their congregation and the Kingdom of God. Rather, the politicians have often used the access to the Nigerian church leadership to promote their own agenda and some politicians have used the church as a platform to castigate their opponents. With this closeness, it often becomes difficult for the leaders to openly challenge government policies, which impact negatively on their congregation. As a consequence, the church leadership has become what Martin Luther King once described as a ‘tool of the state rather than a guide and critic of the state’.

Another factor contributing to the apathy of the church leadership is the growing wealth disparity between the clergy and the congregation. The Nigerian church does not operate in a vacuum and very often, the happenings in the wider society trickle down to the church. Nigeria is a society with a high degree of economic inequality, with the rich being extremely rich and the poor being extremely poor. In government, the politicians are getting richer and richer, while the governed are getting poorer and poorer. In the corporate world, the senior executives get heavily rewarded often to the detriment of the lower grade employees, customers and in some instances shareholders. The church is sometimes no different, with a number of church leaders enjoying the luxuries of life such as private jets, expensive cars and properties in choice locations; while the majority of the congregation barely survive on the necessities of life. This has often resulted in a situation whereby the church leaders and the congregation live in two different worlds, with the church leaders living ‘a life of heaven on earth’ and the congregation living ‘a life of hell on earth’. With this disparity, it becomes increasingly difficult for the church leadership to view life from the paradigm of the congregation.

The final factor is a straying away from some of the teachings of the Master. Jesus had and still has compassion for the poor and others at the margin of society. As the quote detailed at the beginning of the article suggests; a key part of Jesus ministry while he was on earth was addressing the concerns of those at the margin of society. Unfortunately, in Nigeria, the prosperity gospel has become the dominant theology in a number of our churches. This has resulted in people looking inwards and watching out for themselves rather than others. It has also resulted in the poor being labeled as unworthy in the Kingdom of God, as they are assumed to have failed to take advantage of ‘God’s purpose for their lives’. In some instances, church leaders refer to poverty as a sin. With a mindset and theology that has a disdain for the poor, one should not be surprised that the Nigerian church leadership is failing to champion the cause of the poor.

Martin Luther King once rhetorically asked the question ‘who was better suited to articulate the concerns of the congregation than the church leadership?’ Throughout history up to the present time, church leaders have always been at the vanguard of social justice and the fight for the cause of the underprivileged. During the Civil Rights Movement, church leaders such as Martin Luther King, Ralph Abernathy and Jesse Jackson played a significant role in tearing down the walls of segregation in the USA. In South Africa, religious leaders like Desmond Tutu lead the fight against Apartheid. In Poland, the priest Jerzy Popieluszko was murdered for his stance against the repressive communist regime. Mother Teresa, a Catholic nun, was a champion for the sick, the orphaned and the poor. It is time that the Nigerian church leadership follows suit and begins to stand up for the poor, the vulnerable and other Nigerians at the margin of society.

In conclusion, all around the world, the poor and marginalized are being pressed deeper and deeper into the abysses of poverty, despair and hopelessness. In this time of moral conflict, the church has to take its rightful place and stand up and be counted. This is currently being played out in the United Kingdom, where the church has been put on the spotlight in the ongoing tug of war between the protesters from the Occupy London Movement and the City of London Corporation, over the rights of the former to set up a protest campsite in front of St Paul’s Cathedral.

On one hand, a group of church leaders have opted to join the City of London Corporation in seeking a legal injunction to eject the protesters from the protest camp, while on the other hand, another group of Christian leaders have drawn up plans to protect the protesters by forming a ring of prayer around the camp outside St Paul’s Cathedral, should an attempt be made to forcibly remove the protesters. Analogous to the UK situation, the Nigerian Church leaders would have to choose whether to side with the authorities to eject the Nigerian masses from the camp of hope, comfort and rest or whether to form a ring around the Nigerian masses to prevent the poor from the blows of oppression, inflation and poverty.

Ahmed Olayinka Sule, CFA

November 2011

The views stated in this article are personal to the writer and does not represent the views or opinions of any company or organization with which the author is or was associated.

© Ahmed Sule 2011

By Ahmed Sule (China Daily)

http://www.chinadaily.com.cn/opinion/2011-09/16/content_13716831.htm

Since I penned an article titled “Time for a new credit rating lifeline” (China Daily European Weekly, Aug 19) in which I argued for the formation of a BRICS-led credit rating agency (CRA) to rival Standard & Poor’s, Moody’s Investor Service and Fitch Ratings, a number of events have taken place within the CRA universe.

It has been reported that the US Justice Department will investigate S&P for its role in improperly rating several mortgage securities in the build-up to the 2008 financial crisis. On Aug 24, Moody’s downgraded Japan’s government debt by one notch to Aa3. Furthermore, a former Moody’s executive informed the US Securities Exchange Commission that the senior management of the company put pressure on its credit analysts to issue favorable ratings in order to please clients and generate further business.

Another event that is likely to have significant ramifications on the structure of the credit rating agencies occurred earlier this month. However, this event was not widely reported in the global financial press. On Sept 6, Dagong Global Credit Rating, the Chinese credit rating agency, indicated that it aims to collaborate with a number of organizations within the BRICS (the emerging economies of Brazil, Russia, India, China and South Africa), the US, Europe and South Korea to form a super-sovereign credit rating agency, which would reduce dependence on S&P, Moody’s and Fitch (the “big three”).

Guan Jianzhong, the managing director of Dagong, expressed his optimism that the proposed agency “will gain a leading position in the global rating market within the next five years”. The formation of a super-sovereign credit rating agency is a step in the right direction, as it would contribute to the improvement of the information asymmetry between debt issuers and investors.

Why is the formation of a new emerging market-led CRA to rival the big three CRAs necessary? What challenges would the proposed agency face and how can they be overcome? What are the prospects for such an agency?

For almost a century, S&P, Moody’s and Fitch – which account for 95 percent of the market share – have dominated the global CRA space. Despite the shift in the global financial architecture toward emerging economies, it has been difficult for CRAs from the emerging markets to compete with the big three. One major factor is the lack of access to the world’s largest capital market – the US. For a CRA to be recognized as a bond-rater in the US, it is required to obtain a Nationally Recognized Statistical Rating Organization (NRSRO) status, which is granted by the US Securities and Exchange Commission (SEC). So far, only 10 CRAs have been granted the NRSRO designation of which seven are from the US and one each from Canada, France and Japan. There is currently no representative from the emerging market. The formation of a CRA to rival the big three and challenge the dominance of the advanced economies’ CRA is long overdue.

Another reason why the formation of this proposed CRA is timely is because of the ongoing reforms and debates impacting the big three CRAs. In the aftermath of the recent downgrades of the US debt and the sovereign debts of a number of European countries, there has been an unprecedented backlash against the big three rating agencies on both sides of the Atlantic. The SEC has recently asked S&P to disclose who within its ranks knew of the decision to downgrade US debt before it was announced. This is an attempt to find out if there was any form of insider dealing.

The SEC is also investigating the role played by the credit rating agencies in developing mortgage-bond deals that helped spark off the financial crisis. In Europe, stern statements have been made by a number of top European politicians. For instance, EU Justice Commissioner Viviane Reding remarked: “Europe cannot let itself be destroyed by three American private companies.” There are also plans to set up a European credit rating agency in response to earlier calls by the German chancellor, the Austrian chancellor, the Polish deputy prime minister and Luxembourg’s prime minister. European legislators are also considering the possibility of imposing “civil liability” on rating agencies for incorrect judgments on the credit worthiness of sovereign European nations.

The implications of the ongoing onslaught on the CRAs by European and US regulators and politicians are twofold: First there is likely to be a more cautious approach by the big three agencies in the rating of US and European sovereign debt. Second, it is likely to lead to the formation of a Eurocentric CRA and a heavily US and Europe influenced big three CRAs. This could widen the credit information asymmetry between the emerging markets including the BRICS and the advanced debtor economies of Europe and the US.

Since a number of large emerging economies such as China, Brazil, Russia and other oil exporting nations have sizeable exposure to the government and corporate debt in a number of these advanced economies, these emerging countries need access to reliable, transparent and independent credit analyses. With the independence of the big three rating agencies gradually being compromised, the formation of the proposed super-sovereign CRA, which should mitigate against the risk of being pressured by authorities in the advanced economies is timely.

The clampdown on the big three rating agency also presents an opportunity for the new rating agency proposed by Dagong to stamp its presence in the global financial space. As regulators in Europe and the US curtail the influence of the big three, this new agency can exploit the clampdown to gain market share. However, for the agency to gain influence, it would need to be globally recognized, especially by regulators in the developed markets.

One way of gaining this recognition would be for the new rating agency to be registered as an NRSRO by the US SEC. This would give the agency access to the world’s largest capital market, thereby increasing its influence. However, this will not be an easy task as evidenced by the fact that none of the current NRSROs have any emerging market influence. In September 2010, the SEC denied Dagong NRSRO status, citing which it claimed to be Dagong’s inability to comply with the recordkeeping production, and examination requirements of the Federal securities laws. Some analysts have attributed this rejection to US fear that its dominance in credit rating could be challenged.

To overcome this barrier, the proposed rating agency would need to first get political support from emerging and developing economies. Each of the BRICS nations should officially recognize the new rating agency as a rating organization.

Other emerging markets such as African countries, Middle East and Asian economies should also be encouraged to recognize the proposed rating agency. BRICS and other emerging economies could legislate that before its sovereign wealth funds commit additional investment into the sovereign and corporate debt of advanced economies, these borrowers achieve a target rating set by the proposed agency.

Finally, the BRICS and other emerging markets should also push for the recognition of the proposed agency as an NRSRO by the SEC.

By Ahmed Sule (China Daily European Weekly)

http://www.chinadaily.com.cn/opinion/2011-08/19/content_13151109.htm

Credit rating agencies play a significant role in the financial world. They help clear up confusion in the capital market by providing investors and lenders with information so they can make informed decisions about the credit worthiness of debt obligations and financial products.

But they can also be destructive, as evidenced by their role in failing to do anything to stop the financial crisis that exploded in 2008. With the United States experiencing yet another financial crisis and the European Union debt crisis depressing the global economy, there have been calls for greater regulation of credit rating agencies in order to reduce the influence of these agencies.

With the rise of the BRICS (the emerging economies of Brazil, Russia, India, China and South Africa) and other emerging economies and their exposure to government debt in a number of advanced economies, these emerging creditor nations need access to reliable, transparent and independent credit analyses. A new, reliable, independent and influential rating agency is needed. In short, it is time to set up a BRICS credit rating agency.

First, however, let’s talk about what these credit rating agencies do. In short, they help lower the cost of seeking information and improve transparency. They usually assign ratings to states, countries, government agencies and corporations in both domestic and foreign markets. Governments and institutional investors often review reports generated by agencies to gain assurance on the debt issuers’ ability to meet its capital and interest obligation on its debt.

There are about 72 agencies worldwide, out of which 10 are viewed as Nationally Recognized Statistical Rating Organizations (NRSRO) by the US Securities and Exchange Commission.

The NRSRO status allows these agencies to issue credit ratings in the US. The global credit rating agency sector is dominated by three players: Standard & Poor’s, Moody’s Investor Service and Fitch Ratings.

The Big Three have come under intense scrutiny in recent years due to their role in the subprime mortgage crisis and the ongoing sovereign debt crises plaguing the EU and the US.

In the build-up to the subprime mortgage crisis, the three agencies failed to outline the risks in subprime mortgage debt products and gave these mortgage-backed securities very high ratings. Global investors, relying on the ratings, invested in these dubious financial products and created a housing bubble. Eventually, when the subprime borrowers began to default on their obligations (and when it was already too late for homeowners and investors and a financial crisis was inevitable) the agencies downgraded the financial products. These downgrades pushed the crash forward in the capital market. In the aftermath of the crisis, these agencies were roundly criticized for their incompetence and their inability to issue accurate ratings.

In the aftermath of the backlash resulting from their role in the subprime crisis, the Big Three became more proactive in ratings of sovereign debt. Previously, the Big Three were silent on the deteriorating fiscal conditions of the more developed markets in the US and Europe. While the Big Three were proactive in downgrading the ratings of fiscally challenged emerging market sovereign debt, they continued to retain the investment grade ratings for large economies such as Europe and the US. Things began to change in December 2009 when Fitch cut Greece’s rating from A- to BBB+ with a negative outlook. Within the month, S&P and Moody’s also cut Greece’s credit rating. In January of this year, Fitch joined S&P and Moody’s in downgrading Greece’s bonds to junk status.

This year the Big Three have turned their attention to the US, which had never experienced a credit downgrade. On Aug 5, S&P downgraded the US credit rating from AAA to AA+ citing its doubt in the ability of the US Congress and the Obama administration to formulate an effective fiscal consolidation plan that would stabilize the government’s debt dynamics.

As a consequence of downgrading the US and European debt ratings and their role in failing to warn investors of bad loans in the subprime mortgage crisis, S&P, Moody’s and Fitch are facing an unprecedented backlash from European and American governments.

On both sides of the Atlantic, there have been calls for greater regulation of credit rating agencies in order to reduce the influence of these agencies. The EU is proposing a number of measures to reduce the influence of rating agencies and is advocating the use of two obligatory ratings in addition to the review of the current investor-pay model framework of credit rating agencies. In June, members of the European Parliament recommended that credit rating agencies should be liable in civil law for their ratings. The EU Commissioner for Internal Market and Services Michel Barnier recently suggested banning credit rating agencies from assessing and rating countries that are under the EU-IMF bailout programs. There have also been calls by a number of European political leaders, such as Jean-Claude Juncker and Angela Merkel, for the formation of a European credit ratings agency to rival the Big Three, while the European Parliament has proposed setting up a European credit rating foundation. The European Commission has also suggested forcing credit rating agencies to let countries know about rating changes three days in advance.

The potential clampdown on the rating agency sector is likely to widen the gulf in accurate credit information that passes between BRICS and advanced economies. A number of large emerging economies have sizeable exposure to government and corporate debt in a number of advanced economies. China is the largest holder of US Treasury bonds with an investment of $1.17 trillion. It is indeed time to set up a BRICS credit rating agency.

BRICS should consider forming a credit rating agency to rival the Big Three and the proposed European credit rating agency. Forming a BRICS agency would help address the oligopolistic structure of the credit rating market. It would also act as a counterbalance to the domination of the rating agency market by agencies in developed economies.

The formation of a BRICS agency would be timely. Although there are other rating agencies outside developed markets, their ratings are often discounted by investors, issuers, the media and regulators in developed markets. Dagong Global Credit Rating Company, the Chinese rating agency that lowered the US credit rating relative to China in July of last year, is an example. Investors simply did not pay attention to the rating.

But the BRICS agency would have to be independent and autonomous. This could be a challenge for the BRICS, but for a BRICS agency to be accepted by the international capital market, BRICS would have to work toward this independence.

The agency should be transparent by disclosing the model and statistics it uses in arriving at its ratings.

A major challenge for a BRICS credit rating agency is the likelihood that its ratings will be disregarded. The agency may also not have easy access to debt issuers in developed markets. To overcome this potential obstacle, the organization’s agency would need to build clout. Each of the BRICS nations should officially recognize the organization’s agency as a rating organization. They could also encourage other emerging markets such as countries in Africa, the Middle East and other oil-producing and Asian economies to recognize the BRICS agency.

By Ahmed Sule ,CFA

Published in China Daily

http://www.chinadaily.com.cn/opinion/2011-06/17/content_12723475.htm

On May 11, 2000, The Economist magazine dubbed Africa “the Hopeless Continent” due to its lackluster economic performance, in a feature article titled “Hopeless Africa”.

However, in the decade following the publication, Africa has experienced an economic revival with its combined GDP growing at an average rate of 4.5 percent per annum, thus making Africa one of the fastest-growing economic regions in the world.

Trade and investment have played an important role in Africa’s economic revival. In recent years, there has been a gradual shift away from trade between African and Western economies toward increased level of trade between Africa and the BRIC (Brazil, Russia, India and China) economies. Africa-BRIC trade is characterized by Africa supplying BRIC economies with natural and mineral resources, to fuel the latter’s rapid industrial expansion in exchange for infrastructural development in various projects including railways, roads, hydroelectric power stations and dams.

According to the Standard Bank Group, trade between BRIC nations and Africa increased almost eight times from $21.9 billion (15.2 billion euros) in 2000 to $164.6 billion in 2008, and it is expected to exceed $4 trillion by 2030. In 2010, China overtook the United States as Africa’s largest trading partner, while Brazil and India currently rank as Africa’s sixth and 10th largest trading partners, respectively. Among the BRIC countries, China dominates BRIC-Africa trade, accounting for about two-thirds of the trade.

The increased level of BRIC-Africa economic engagement has brought several benefits to both parties. This includes infrastructure development, economic expansion and developmental aid for Africa, while the BRIC nations have benefited from access to strategic mineral resources, market access and support from African states at multilateral summits.

As the BRIC countries and Africa continue to reap the benefits of bilateral trade, a number of initiatives such as the Forum on China-Africa Cooperation and the India-Africa Forum Summit have been put in place to foster friendly economic cooperation. There has also been a number of high-profile visits by officials from BRIC economies to Africa. In December 2010, the BRIC countries invited South Africa to join the grouping.

However, despite the increased level of economic engagement and various initiatives to foster harmonious economic cooperation between Africa and the BRIC nations, there have been instances of rising tension and conflict.

Having experienced the ills of colonialism and imperialism in the hands of Western economies, Africans are apprehensive of experiencing exploitation in the hands of the new emerging super powers. Consequently, the increasing economic engagement between the BRIC countries and Africa has resulted in rising tension and claims of exploitation with a number of Africans describing the BRIC economies as the new neo-colonialists. Thabo Mbeki, the former South African president, described China’s quest for mineral resources in Africa as a “new form of neo-colonialist adventure”. Others have described the BRIC countries’ incursion into Africa as the new scramble for Africa.

These conflicts have manifested in various forms. There were protests in Zambia as a result of the death of 50 mine workers in an explosion that took place at the Chinese owned copper mine in Chambishi, which occurred due to lax safety standards. In Nigeria, union members kidnapped 11 Indian steelworkers in 2007 over a pay dispute. There have also been complaints in Gabon and Ghana by environmentalists over the prospecting activities of the Chinese company Sinopec at the national parks.

What are the contributing factors to these conflicts? What factors are hindering BRIC-Africa economic cooperation? How can the Africa-BRIC relationship be improved so as to create a win-win situation for both parties?

As a result of the BRIC countries engagement with Africa, there has been a sizeable flow of foreign direct investment (FDI) into Africa, which often results in the establishment of companies in Africa by BRIC entrepreneurs. The activities of some of these companies have resulted in frictions, particularly in the area of labor relations. Even though these companies employ Africans, in some instances, these companies sometimes operate without regard to the safety and environmental laws of the land, thereby resulting in injuries and sometimes death. Another area of concern is the influx of expatriate workers from the BRIC economies. Very often African governments have signed contracts with the BRIC nations containing clauses that allow for the importation of expatriate staff, despite the availability of local skill sets to perform these roles.

Another factor that has strained cooperation between BRIC and Africa is the impact of their trade on the local industry. As a consequence of Africa opening its market to investment from the BRIC economies, a number of local industries have been unable to compete with the cheap imports coming from the grouping, which eventually results in the demise of these industries. A good example is the case of the textile industries, in which cheap textile imports from China resulted in the loss of hundreds of thousands of jobs in Nigeria, Lesotho and South Africa. The flooding of Chinese goods into a number of African countries has also stifled the development of the African manufacturing sector.

A lack of transparency in dealings between Africa and the BRIC nations also acts as a barrier to a harmonious relationship. One area where the lack of transparency is apparent is in the area of contract negotiation. Some of the contracts agreed between the BRIC nations and the African governments contain “Trojan horse” clauses, which allow for high import content and imported labor, thereby undermining local industries and employment. Furthermore, details of a number of agreements signed between African states and China are not subject to public scrutiny, thereby creating suspicion as to the real motives of these contracts. Very often, aid to African states has been used by the BRIC countries to obtain monopoly rights to the countries’ mineral resources. A number of corrupt African government officials also demand bribes before awarding contracts, thereby making it difficult for BRIC investors to operate.

The support to some African regimes by some of the BRIC economies in order to access the countries’ resources has often resulted in ill feelings toward BRIC among the citizens of a number of African states. This could backfire.

Furthermore, there appears to be information asymmetry in the dealings between African governments and BRIC. While the BRIC nations know what they want from their engagement with Africa, it is not really clear what Africa hopes to get in return. There is no coherent and holistic African program of engagement with each of the BRIC member countries. As a result of the inability of African governments in adopting a united front when dealing with BRIC, they are unable to exercise a strong bargaining power during negotiations.

In order for a harmonious Africa-BRIC economic cooperation to thrive, both parties will need to consider the following:

African member states should adopt a unified approach in their engagement with BRIC. Rather than engaging separately with each of the BRIC countries, African governments should combine as a single bloc as this will put Africa in a strong bargaining position. African governments should also discuss and develop a BRIC policy, which would spell out what it expects to get out of the Africa-BRIC economic engagement. Furthermore, African governments should set up think tanks or fund research on BRIC with a view of gaining a better understanding of BRIC engagement in Africa.

There should also be more transparency in BRIC-Africa economic engagement. China should provide more information about its foreign aid to Africa, including project costs, loan value, loan terms and repayment conditions. Furthermore, “Trojan horse” clauses contained in contracts, which are detrimental to local employment and industry, should be discouraged. However, allowances should be made for the employment of imported skilled workers where there is a paucity of the relevant skills in the local market. African governments should be more transparent in their operations by discouraging corrupt officials from demanding bribes from BRIC investors.

The BRIC economies will also have to balance their economic objectives with moral responsibility. For BRIC nations to achieve their objective in their economic engagement with Africa, it is important that the populations in countries where they have investments are treated fairly. African governments will have to monitor the activities of its trading partners to prevent instances whereby local industries and employment are undermined.

African governments, in conjunction with BRIC, should work out modalities to enable Africa businesses to access the vast BRIC market. Furthermore, as the BRIC economies continue to move up the manufacturing value chain, African governments should position their economies to exploit the vacuum left by BRIC advancement up the value chain. Africa should also learn from the development models adopted by the BRIC countries and, where feasible, collaborate with them in applying an African solution using the BRIC developmental experience.

The ever-expanding BRIC-Africa economic engagement presents a great opportunity to lift Africa out of poverty and at the same time provides BRIC with access to Africa’s strategic resource assets. Bridging the current barriers in trade between the two blocs will go a long way in making the relationship more of a two-way and win-win cooperation.

Racist and Inflammatory Comments Against Blacks In the British Media:

Why It Continues To Prevail

October 2011

by Ahmed Olayinka Sule, CFA

suleaos@gmail.com

http://about.me/ahmedsule

‘Most of the men in Nigeria don’t do anything; their wives do all the work, that’s why they have so many. They have four wives – one to do the farming, one to look after the children, one to look after the man and one to do the housework. It is just a fact”. 

Baroness Flather (BBC Radio 5 – 26 September 2011)

“The whites have become black. A particular sort of violent, destructive, nihilistic, gangster culture has become the fashion. And black and white, boy and girl, operate in this language together, this language which is wholly false, which is this Jamaican patois that’s been intruded in England, and this is why so many of us have this sense of literally a foreign country….. Listen to David Lammy an archetypal successful black man. If you turn the screen off, so you were listening to him on radio, you would think he was white”. 

David Starkey (BBC Newsnight – 12 August 2011)

“In each wave, black women are significantly less physically attractive than women of other races….black women are objectively less physically attractive than other women… Africans have more mutations in their genomes than other races. And the mutation loads significantly decrease physical attractiveness”. 

-Satoshi Kanazawa (Psychology Today – 15 May 2011)

“I think this is racism being presented as entertainment, and I think it is disgusting. My personal view is that this has caused enormous offence not only abroad but to the Indian community here”. 

UK Culture Secretary Tessa Jowell (18 January 2007)

Introduction

United Kingdom is a multicultural society where people from all parts of the world reside, while London is one of the most multicultural cities in the world playing host to Arabs, Asians, Africans and other people from the four corners of the globe. As a multicultural location, it is not unusual for one to observe instances of racism. In the United Kingdom, it is usually the minority segment of society such as Africans, Asians, Travellers, Jews or at times Eastern Europeans who often experience the worse forms of racism.

In this paper, I will narrow my discussion on racism, to a specific segment of the British society i.e. the black people resident in the United Kingdom.  I will focus on the possible factors that contribute towards the prevalence of racist and inflammatory comments against blacks in the British media. I will attempt to answer the following questions: Why do these attacks keep occurring? Are there economic factors that allow these attacks to prevail?  Is there any template case to follow to mitigate against such sustained attacks?

Four Case Studies

To get a better appreciation of the factors contributing to the prevalence of this racist attack against blacks in some sections of the British media, I will be drawing lessons, actions and attitudes from three recent cases that occurred in 2011:

-       The Baroness Flather race row in respect of her comment about Nigerian men relayed on BBC Radio 5 on 26 September 2011.

-       The David Starkey race row in respect of his comment on ‘whites becoming blacks’ relayed on the BBC Newsnight programme on 12 August 2011

-       The Dr. Satoshi Kanazawa race row in respect of his research on black women published in ‘Psychology Today’ on 15 May 2011

These three cases are all high profile events that occurred within a timeframe of nineteen weeks in 2011. The key characters were British residents/citizens, who made racially offensive comments against the black community in various outlets including radio, television and a magazine. From each of these case studies, I will discuss the principal players, the racially offensive comments made, the reaction and impact of the racially inflammatory comments.

The fourth case study used in this paper occurred in 2007. It is the race row that occurred when India’s Shilpa Shetty was racially abused by three of her fellow Big Brother housemates at the 2007 Celebrity Big Brother contest, which was shown on Channel Four TV.

The fallout from these cases could help the reader gain an understanding on the role- politicians, the media, the community and economic factors play in either reinforcing or preventing the prevalence of these racially offensive comments. Appendix 1 contains a comparative analysis between the David Starkey race row and the Shilpa Shetty race row .

Case 1: Baroness Flather’s comment about Nigerian men

On 26 September 2011, Baroness Flather, the Conservative life peer, took part in a polygamy discussion on a BBC Radio 5 breakfast show. During the discussion, a Nigerian caller phoned in and stated that his father had four wives and that they all lived together without arguments. Baroness Flather responded saying “most of the men in Nigeria don’t do anything; their wives do all the work, that’s why they have so many”. Her comment was not widely reported in the press. BBC Radio 5 released a statement saying the peer’s views were “entirely her own”.

Case 2: David Starkey’s  ‘whites have become black’ comment

Between 6 August 2011 and 10 August 2011, there were a number of riots across several cities in England including London, Liverpool, Manchester, Birmingham, Bristol, Gillingham and Nottingham. The people involved in the riots cut across all races. On 12 August 2011, David Starkey, the British historian took part in a BBC 2 Newsnight television debate programme on the riots. When asked about his views on the riot, he began by citing Enoch Powell’s infamous “Rivers of Blood” speech, which Enoch made in 1968. In explaining the role that white people played in the riot, he remarked “….the whites have become black. A particular sort of violent, destructive, nihilistic, gangster culture has become the fashion. And black and white, boy and girl, operate in this language together”.  Many viewed his comments as racist and it generated a lot of complaints. BBC and the Office of Communications (Ofcom), the media regulator received several complaints from the public. David Starkey refused to apologise and BBC defended the way the debate was conducted. Ofcom eventually decided not to investigate the complaints about David Starkey’s comments.

In October 2011, David Starkey took part in a fringe Tory event at the 2011 Conservative Party Conference. Guardian’s deputy editor Katherine Viner who attended the event indicated on twitter “David Starkey has repeated his race-based analysis of the riots, with ref to Enoch Powell. Scandalous and incendiary”

Case 3: Dr. Satoshi Kanazawa’s research on black women

On 15 May 2011, Dr Satoshi Kanazawa, the London School of Economics (LSE) lecturer published a controversial article in the USA’s – Psychology Today journal titled: “Why Black Women Are Less Physically Attractive Than Other Women”. In his article, Satoshi argued that relative to ladies from other races, black women are less attractive. This study generated outrage around the world, especially in Britain where the author works. There were calls from activists and human rights organisations for Satoshi to be sacked. LSE carried out an inquiry into his research and found out that his argument was flawed. He was barred from teaching compulsory courses in the school and from publishing in non-peer-reviewed journals for a year. Satoshi also wrote a letter of apology to the LSE Director, Professor Judith Rees, in which he expressed regret over his action and admitted the flaw in his methodology. There was not much coverage in the press over his remorse, apology and admittance of the flaws in his research.

Case 4: Celebrity Big Brother- Shilpa Shetty race row

In January 2007, Shilpa Shetty, the Bollywood superstar took part in the Celebrity Big Brother 2007 series. During the contest the late Jade Goody, Danielle Lloyd and Jo O’Meara subjected Shilpa to racial abuse, bullying and insults. Millions of viewers around the country watched Shilpa being called “a liar and a fake”; they heard Jade tell Shilpa “You need a day in the slums. Go in your community and go to all those people who look up to you and be real”; they saw Jade say “I don’t know what her surname is. What is it? Shilpa Cookamada, Shilpa whatever Rockamada, Shilpa Poppadom”. Jo O’Meara also said “ Indians were thin because they undercooked chicken”.

The reaction to the racist attack melted on Shilpa was swift and effective. Thousands of calls were made to Ofcom; there were protests in India. Complaints were made to the police and Jade was invited for questioning by the police. A British MP of Indian descent took the matter up in the House of Parliament. Due to the reaction of the Indian community, (both in India and Britain) the issue was given serious attention. Tony Blair and Gordon Brown, then the Prime Minister and Chancellor respectively both commented on the racist attack. The Archbishop of York, the UK Culture Secretary Tessa Jowell, and the Indian Minister for External Affairs all denounced the attacks.  Carphone Warehouse withdrew its sponsorship of the Big Brother programme, while The Perfume Shop dropped Jade Goody’s perfume range from its 150 UK outlets after the Big Brother controversy.

Why the racially offensive comments continue to prevail

From the above-mentioned cases, one can see that despite the fact that all events involved racist and inflammatory comments against ethnic minorities, only the Shilpa case elicited a strong reaction from the media, community, politicians, police, advertisers and regulator. In the three other cases, the only effective reaction was an apology and a one-year suspension from publishing articles. Since the Shilpa Shetty race row in 2007, there has not been any major incident in the British media in which anyone has made any racist and inflammatory comment against Indians; however blacks still continue to be subject to racist comments in some section of the British media.

Why do racially offensive comments against blacks continue to prevail in the British media? Why did the Shilpa Shetty case grab the attention of the politicians, police, advertisers etc? Why is this not the case when bigotry statements are made against blacks in the British media? Are there lessons that the black community can learn from the Indian community? The answers to these questions will be addressed in the next couple of pages.

There are eight possible reasons why racist and inflammatory comments against blacks continue to prevail in the British Media: They include:

-       Apathy of the black community towards race issues

-       The role of the black political class

-       Lack of political will by British politicians to address racism

-       Black spending power

-       The state of Africa

-       Apathy of the black middle class towards race issues

-       Media and black influence

-       General attitude towards race issues in Britain

Apathy of the black community towards race issues

Most members of the black British community are indifferent when it comes to racial issues, especially when the black community is portrayed in a negative light. There are only a few organisations and individuals that champion the rights of blacks and tackle racism in the UK. When members of the black community put on their screens, read their newspapers or turn on their radio and observe members of their race insulted by bigots, they often have the expectation that other people will complain. Very often, it has been members of other races that have taken up the cause of addressing these racial injustices.

After David Starkey made his comments on television, BBC received nearly 900 complaints from viewers, while Ofcom received just over 100 complaints. In comparison, during the Shilpa Shetty case, Ofcom received around 45,000 complaints. Due to the deluge of complaints during the Shilpa case, Ofcom’s website experienced technical problems. It should therefore not be surprising that Ofcom ruled that Celebrity Big Brother breached its code of conduct over the Shilpa race row. In contrast, the same Ofcom decided not to investigate the  complaints about David Starkey’s comments.  Perhaps when the black community learns to become more vocal on racial injustice, then the media will begin to become more sensitive to the blacks dignity.

The role of the black political class

Despite the prevalence of a number of black politicians in the UK, they are sometimes silent on the issue of race. Unlike their American counterparts who are very vocal on racial injustice, the black British political class is less vocal. Admittedly, they have been vocal in some high profile cases like the Stephen Lawrence case, but generally they opt to be silent most of the time. In all the three cases cited above, the black political class was silent. When David Starkey made his remark, there was hardly any response from the black political class. Even though David Starkey remarked that “..listen to David Lammy an archetypal successful black man. If you turn the screen off, so you were listening to him on radio, you would think he was white”- David Lammy failed to challenge him, rather, he wrote on twitter “Yes, I have now seen what he said. His views are irrelevant – he’s a tudor historian talking about contemporary urban unrest”.  As a prominent black politician, David Lammy should have exhibited strong leadership and asked Starkey to retract his statement.

Another area where the black political class is failing to show leadership is with regards to the on going attacks on innocent blacks residing in Libya by the Libyan National Transitional Council (NTC) army. Despite the cries of Africans, human rights agencies and concerned citizens in the UK on the plight of these people, the black MP’s are yet to discuss the issue in the House of Parliament (even though they have all been notified of the potential genocide and the UK government provides support to the NTC).

In contrast, during the Shilpa Shetty race row, Labour’s Asian MP, Keith Vaz played a key role in escalating the issue to the highest level. He tabled a motion in the House of Commons calling for immediate action on the race issue. He also asked the Managing Director of Channel Four to apologise to Shilpa and also called for his resignation. Keith Vaz openly challenged Tony Blair in the House of Parliament, asking him whether broadcasters should take care not to transmit such racist material. He also introduced Shilpa Shetty to Tony Blair. The black political class can learn from Keith Vaz’s actions during the Shilpa incident.

Lack of political will by British politicians

This point is similar to the above point, however it is not only black politicians that show apathy to race issues, but also most of the British political class in general. Politicians are often reluctant to speak up on race issues. During the David Starkey race row, only Ed Milliband, the Labour leader spoke out saying “it is disgusting absolutely outrageous that someone in the 21st century could be making that sort of comment”. Despite Milliband’s call on all politicians from all political parties to condemn what he called racist comments, his call went unheeded.

None of the politicians from the major political parties have responded to Baroness Flather’s racists comment about Nigerian men. Even though she is a life peer of the Conservative Party, the party hierarchy has not called her to order. So far, only one politician, Femi Solola, an independent London Mayoral candidate has condemned Baroness Flather’s comments. The whole British political class has also been silent on the issue of the ongoing killing of black people in Libya.

If British politicians are apathetic towards race issues, how come they strongly opposed the racist insults melted on Shilpa Shetty? The reason for the stern response from the political class was due to economic reasons.

India is one of the emerging global economic powers and is a major UK trading partner and export destination for British exports. At the time of the Shilpa race row, Gordon Brown was in India on an official trip. With the Indian politicians complaining about the treatment melted on Shilpa, coupled with the protest taking place in India, the British Government would have been aware that trade deals worth £3 trillion were under threat.

As a consequence, the reaction from the politicians was swift with: Gordon Brown saying “I understand that in the U.K. there have already been 10,000 complaints from viewers about these remarks, which people see, rightly, as offensive”; Tony Blair saying “We should oppose racism in all its forms”; Tessa Jowell saying “I think this is racism being presented as entertainment, and I think it is disgusting. My personal view is that this has caused enormous offence not only abroad but to the Indian community here” and David Cameron (then opposition leader) saying “All racism is “distasteful” and has to be opposed”.

Black spending power

According to a study commissioned by Multi-Cultural Communications and Weber Shandwick in 2007, it was estimated that by 2010, UK’s black, Asian and other minority ethnic communities spending power would reach £300bn. Another report by the Institute of Practitioners in Advertising (IPA) on ethnic diversity in the UK, disclosed the combined disposable income of ethnic minorities at an estimated £32bn. Details on the spending power of the black British community, as a stand alone segment of society is not readily available. Although the sums earlier mentioned appear large, when one bears in mind that ethnic minorities in the UK comprise of blacks, Indians, Pakistani, Bangladeshi, Chinese and other ethnic groups such as Travellers and Eastern Europeans; the spending power of blacks will be much lower than the amounts highlighted earlier. In comparison, the spending power of African Americans is significantly higher. According to the Selig Center for Economic Growth, black buying power in America is expected to climb to $1.1 trillion by 2014. Hence advertisers in the States tend to pay attention to the African American spending power.

Spending power is very important to companies who are always seeking means to tap into the spending power of potential consumers. Companies advertise in the media in order to gain access to the consumers. If the spending power of a particular segment of society is very strong, it is likely that companies will devote more funds to its advertising and marketing budget in order to access the segment. A sizeable amount of this budget will be channeled through the media. As a consequence, advertisers will pay close attention when the activities of the media negatively impact its core or potential customers. Furthermore, the media will be cautious in how it portrays groups with strong spending power, for fear of losing business from advertisers.

In the United Kingdom, the black community does not have strong purchasing power and this is due to several reasons such as low population size relative to the total population and economic factors. Relative to other ethnic groups in the UK, blacks are relatively poorer. The proportion of people who live in low-income households is 50 per cent for black Africans, which is lower than all other ethnic groups with the exception of the Pakistanis and Bangladeshis. Furthermore, a survey conducted by the Institute for Public Policy Research revealed that almost half of black people aged between 16 and 24 are unemployed, compared with 20 per cent of white people of the same age. According to the Office of National Statistics, between April and June 2010, 17.1 per cent and 23.3 per cent of black Caribbean’s and black Africans respectively lived in a household where nobody had a job.

This lack of economic and spending power often results in the reluctance by advertisers and the media to ensure that the black segment of society is treated fairly by the media. So when blacks are degraded, insulted and ridiculed in the media, the advertisers often turn a blind eye and do not put pressure on the media to address the racial injustice.

None of the advertisers put any pressure on the media houses to address the inflammatory racial comments melted on the black community by David Starkey and Baroness Flather. On the contrary, during the Shilpa Shetty race row, the advertisers put pressure on Channel Four to address the racial injustice. The Chief Executive Officer of Carphone Warehouse, the sponsor of the Big Brother programme said, “Our concern has rapidly mounted about the broadcast behaviour of individuals within the Big Brother house. We are totally against all forms of racism and bullying and indeed this behaviour is entirely at odds with the brand values of The Carphone Warehouse”. Eventually, Carphone Warehouse withdrew its yearly £3million sponsorship of the series and there were threats from other advertisers to pull out. Furthermore, The Perfume Shop, the UK Perfumery chain, withdrew Jade Goody’s perfume range from all of its 150 UK stores.

The State of Africa

Malcolm X, the civil rights activist once argued that as long as Africa is viewed in a bad light, it will be difficult for blacks around the world to gain the respect of others.

Black people from all over the world are either directly or indirectly linked to Africa. Africa is also home to the largest concentration of black people in the world. Unfortunately, Africa faces a number of challenges ranging from poverty, disease, poor leadership, war and famine. Most of the challenges that Africa faces is heavily reported and emphasized in the media, while the good points about Africa are under reported. The portrayal of Africa has led many individuals and institutions to have a low regard for the continent, its people and its culture. This disregard for Africa has also extended to blacks in other parts of the world, who are also viewed negatively.

There is also apathy on the part of a number of African leaders to ensure the well being of its citizens particularly those based outside of the continent. When Africans are ridiculed in other countries, majority of African government officials turn a blind eye. This is in contrast to other governments. For instance, during the Shilpa Shetty race row, key government officials in India protested. The Indian Minister for External Affairs, Anand Sharma remarked  ‘‘it has caused indignation, it is most unfortunate, and any kind of racism – or racist slur – is unacceptable in any civilised society”. He also said that the Indian Government was preparing a report on the show; the Indian Information and Broadcasting Minister, Priyaranjan Dasmunsi asked Shilpa to visit the Indian high commission in London when she came out of the Big Brother house. He also said “If there has been some racism shown against her in the show, it is not only an attack on women but also on the skin and the country”.

On the economic front, African countries are not economic powers, so they don’t have the economic and political clout in international diplomacy. Furthermore, with the exception of South Africa, there is no predominately black populated nation that is in the list of UK’s top trading partners as can be seen overleaf:

UK Top 25 Trading Partners as at July 2011

Source: HM Revenue and Customs, Overseas Trade Statistics

With no economic stake to lose, it is obvious why there has been no pressure from UK government officials on the media to address racist and inflammatory comments directed at the black community.

Apathy of the black middle class towards race issues

In September 1903, W.E.B. Du Bois, the African American civil rights activist and sociologist published his influential essay titled ‘The Talented Tenth’. In his essay, Du Bois argued that social change for the blacks in the then segregated America could be accomplished by developing the small group of college-educated blacks he called “the Talented Tenth“. He suggested that the educated and influential among the blacks should lift up the remaining blacks. He wrote, “The Talented Tenth rises and pulls all that are worth the saving up to their vantage ground”.

In the United Kingdom, the so-called black middle class could be described as a modern day equivalent of the ‘Talented Tenth’. Though they are influential, talented and in some instances extremely wealthy, the question one needs to ask is: Is the black British middle class rising up to pull its downtrodden brothers and sisters   up to their vantage ground? In modern day Britain, the bulk of the people subject to racism are the poor, the weak, the uneducated, the vulnerable and those without a voice. The downtrodden black people of Britain are often not influential enough to speak out and fight conscious and unconscious racism. In contrast, the black middle class has in some ways, been able to overcome the obstacles of racial injustice and is often fully integrated into British society.

Unfortunately, as the so-called black middle class climb up the social and economic ladder, they often forget about their brethrens at the bottom rung of the ladder. Rather than use their wealth, influence and intellect to fight racial injustice and speak up when blacks are racially insulted in the media, they prefer to use their fortune solely for their own benefits. They often look down on their less fortunate brothers and sisters who they regard as inferior people who have failed to lift themselves up by their bootstraps. When issues of race come up, the so-called black middle class are afraid to speak up for fear of losing their jobs, friends or being tagged as “using the race card”. They often believe that “ If I can make it here, why can’t my lazy brothers and sisters make it here, rather than blaming their misfortune on racism”.

One imagines, what could happen if the Talented Tenth, decided to put pressure on their MPs to call on the government to put pressure on BBC to condemn the remark made by David Starkey? What could happen if the Talented Tenth wrote an Open Letter to the Conservative Leadership condemning Baroness Flather’s racist chant about Nigerian men? What could happen if the Talented Tenth agreed to march to No. 10 Downing Street to urge Prime Minister David Cameron to tackle the prevalence of racist and inflammatory comments against blacks in the British media?

Media and black influence

There are not many black owned media outlets to voice out the concerns of the black community. Furthermore, in the mainstream media, the black community is under represented. There are very few senior personnel in many of the British media houses, although there are a few black newscasters such as Gillian Joseph and Trevor McDonald. When one looks at the Board of these mainstream media houses, there is hardly any representative from the black community. Besides The Voice, there are very few black oriented newspapers. Also The Voice is not a mainstream newspaper, so the majority of the British population does not read the views expressed in these newspapers. Because of the lack of influence in the mainstream British media, there is no black voice within the media to put pressure on the media houses to refrain from allowing racially inflammatory comments to be aired.

General attitude towards race issues in Britain

The last factor accounting for the prevalence of racially inflammatory commentaries in the British media is the societies general attitude towards race issues. Unlike the USA where racism is continuously debated and discussed, in the UK, the R- word is sort of a taboo. People feel uncomfortable when the R word is mentioned. Even among the blacks in the UK, the R word is sometimes avoided. When one raises the issue of racism, the often-quoted phrase used to silence the individual is “ you are bringing up the race card”. This fear of raising the R question has resulted in many race related issues being swept under the carpet.

Conclusion

In this paper, I have refrained from addressing the causes of racism, as a lot has already been written on this topic. The discussion on the factors contributing to the prevalence of racist and inflammatory comments against blacks in the British media, coupled with the analysis of the four case studies should help activists, policy makers, the media, the government and the black community develop strategies to address these bigoted attacks.

Tackling the projection of racist comments in the media will go a long way in reducing racism. This is because, if a high profile individual can go on TV or any other form of media and make racially offensive comments, without suffering the consequences of such statements, then this could motivate conscious and especially unconscious racists to become more vocal in expressing their racist views. After all, for every racially inflammatory comment made in the open in the British media, there is likely to be hundreds and if possible thousands of other unnoticed comments in classrooms, offices, bars and stadiums.

However, if the prevalent racist and inflammatory comments against the black community in the British media is to be a thing of the past, the black community has to take the first step.

Ahmed Olayinka Sule, CFA

The views stated in this article are personal to the writer and does not represent the views or opinions of any company or organisation with which the author is or was associated.

© Ahmed Sule 2011

by Ahmed Olayinka Sule, CFA

suleaos@gmail.com

http://about.me/ahmedsule

“He was a beloved husband, father, son and brother, and will be missed by his entire family, including aunts, uncles, cousins and many friends”

-        Obituary of Steven Cain (who died in a mining accident)

“Dear Mommy and Jenna, if anything happens to me, I will be looking down from heaven. If you take care of my baby girl, watch over her, tell her all the good things about her daddy. She was so cute and funny. She was my little peanut.”

-        Josh Napper

(content of a sealed note written by Josh and read after his death in a mining accident)

“The families and communities of the dead miners have been changed forever by today’s catastrophic blast……. They were screaming. It was absolute despair. When the news came, everyone just cracked up. People were openly weeping everywhere”

-       Tony Kokshoorn (Mayor of Grey district)

“No miner should ever have to die for a paycheck”

-Hilda Solis (US Secretary of Labor)

Two Players in the Commodity Value Chain

He hugged his wife and kissed his four-month-old son James and then rushed to his car to make the thirty-minute drive to the Sekondina Mine (where he had worked for the last fifteen years). After Jim Reid parked his car, he headed for the mine with his other colleagues. Jim got onto the lift and began the 2,670-meter descent underground.  Forty-five minutes later, Jim disembarked from the truck; work had just started.  He tied his torch on to his forehead and started to crawl inside the tunnel. He began to extract coal from the pit using his drilling machine.

Unknown to Jim and his colleagues, 183,570 cubic meters of gas had leaked out. As a result of the leak, 3,600 tons of coal dust was released, thereby leaving a high concentration of gas underground. There was a big explosion and the impact of the explosion smashed Jim’s six foot five inch frame against the wall. Jim died instantly. He was thirty-five years old. At the time of his death his total remuneration was $50,000 (comprising of a salary of $30,000 and a bonus payment of $20,000).

Sixteen thousand, two hundred and sixty eight kilometers away in New York, Alfonso Raul enters the lift and takes the two-minute ride to the eighty-fourth floor. Alfonso is a commodity trader at Hale Commodity Advisors, one of the leading global commodity trading firms. Alfonso switches on his Bloomberg and Reuters terminals and then logs on to Factiva and starts to monitor events taking place in the financial markets. He focuses on developments relating to the various commodities he trades i.e. zinc, copper and gold. He receives several calls from his clients and he advises them on the best way to position themselves within the markets. On the same day, he calls the various operators, shipping and back office teams to ensure efficient completion of contracts.  When the markets open, he executes a number of profitable trades for his client and employer, using a range of trading strategies. He later takes part in a conference call with his Chief Operating Officer to evaluate the risk and profitability on a number of commodity transactions and financial commitments. He leaves the office at 11 pm. Alfonso is thirty years old. Based on the trades made to date, Alfonso should expect a salary of $350,000 and a bonus of $1,000,000 at the end of the financial year.

Commodity value chain

The above hypothetical example illustrates a day in the life of two players in the commodity market value chain. Commodity traders and miners are key players in the chain. Other participants in the chain include the mining executives, investment bankers, transporters, insurers, storage companies etc. Without these players, it would be difficult for the natural resources buried underground to reach the end user in a processed form.

Resource Scarcity

Most products consumed today are sourced from resources buried underneath the earth’s surface. The petrol used in cars is derived from crude oil found underground, while some dietary supplements are derived from zinc.  Magnetrons, found in microwave ovens contain copper while nickel is a major component in the production of coins. Jewelries such as gold, silver and diamond are sourced from beneath the earth’s surface.

Due to growing urbanization, expanding population and improving life style in emerging markets, there has been an unprecedented increase in global demand for the earth’s natural resources. However, most of these resources are limited in supply. According to Strategy Dynamics Global Limited, by the mid 2030s, demand for many resources will substantially exceed what the planet can supply.

A major consequence of the increased consumption and limited supply of commodities is an increase in commodity prices. With commodity prices elevated, it becomes more profitable to extract the commodities from beneath the earth and sell it at these elevated prices.

Prevalence of mining disasters

Extracting minerals from under the earth has always been a risky business, often resulting in injuries and loss of lives. Due to advancement in technology and better safety practices, the injuries and deaths experienced while mining are not at the elevated levels of the early part of the twentieth century. However, in recent years, there has been an increase in mining disasters.

On 27 September 2011, a miner died at the Kellingley Colliery, a mine owned by UK Coal. A couple of days earlier, four miners died at the Gleision Colliery in Wales, when the coal mine got flooded. In October 2010, thirty-three miners were trapped in a Chilean mine for sixty-eight days. Their ordeal generated worldwide attention. Twenty-nine miners were killed at the Upper Big Branch mine owned by the Virginia based firm Massey Energy in 2010. In November 2010, twenty-nine miners died at the Pike River mine in New Zealand. Five people were killed in a mining incident in South Africa in July 2010. In Colombia a total of one hundred and seventy three miners died in various mining related disasters in 2010. In November 2009, one hundred and seven miners died at the state-run Xinxing mine in China. The miners died because the company’s ventilation system did not ventilate the mine, thereby allowing explosives to build up. Two thousand and six hundred people were killed in several coal mine accidents in China in 2009.

Risk and reward

Before I proceed with this section, I would like to lay down three declarations:

• I believe that human life is priceless and cannot be valued in monetary terms
• I believe that human beings are created equal.
• I believe in the dignity of ALL work

Mining executives, commodity traders, investment bankers and individual miners are key players in the commodity value chain. They all take risks and get rewarded for the risks they take.

Mining Executives: provide overall leadership for the mining company. They comprise of the Board of Directors and senior management. The principal duty of the Board is to create and deliver shareholder value by setting the company’s strategy and ensuring that management implements it. They determine the level of risk that the business should take and ensure that principal risks have been properly identified and are appropriately managed.

At an individual level, the executives face the risk of forfeiting their bonuses or inability to exercise their share option if the company’s share performance deteriorates significantly. They could also lose their jobs due to underperformance. On the reward side, mining executives receive various forms of compensations for their responsibilities including salaries, bonuses and share based payments, which are linked to the share performance of the company.

According to PwC, in 2010, the average annual base pay of Canadian mining Chief Executive Officers (CEO) was $480,000 and average bonus payouts were over $540,000 resulting in a total average compensation package of $1,020,000. In 2011, 56 per cent of Canadian mining CEO’s earned in excess of C$1 million. During the 2010-2011 financial year, BHP Billiton paid its executives a total of $19 million. Don Blankenship, the CEO in charge of Massey Energy, which in 2010 experienced a mining disaster where twenty-nine miners died, received $10.4 million salary in 2010 in addition to a $12 million retirement package.

Mining companies often engage in deal activities as large companies within the sector seek to acquire rivals. According to PwC,  during the first six months of 2011, there were 1,379 mining merger and acquisition deals announced worth US$71 billion. Bloomberg estimates that between January 2010 and January 2011, $30 billion worth of deals were announced in the coal-mining sector. Mergers and acquisitions often benefit mining executives as it can result in the rewriting of management compensation contracts.

Commodity traders/brokers: executes orders to buy or sell commodity contracts on behalf of clients or his/her employers account. As an employee of an institution, he does not bear personal liability for such losses. However, he faces the risk of losing his job or forfeiting his bonus due to poor performance. In extreme cases where he makes unauthorized trades on behalf of his employer, he could be termed a rogue trader and could face imprisonment.

If things go well for the trader, he would get recognition from his colleagues and bosses. She would be awarded huge bonuses, which sometimes run into millions of Dollars.

Glencore International plc, the world’s largest commodity trading firm, which controls 60 per cent of the global zinc trade, 50 per cent of the copper market, 45 per cent of lead, 28 per cent of coal, and 10 per cent of the global wheat market was worth $47bn as at September 2011. In 2010, the company paid sixty-five of its senior staff members an average bonus of $14 million each.

Investment banks: provide a very important service in the commodity value chain. They act as advisors to mining companies that engage in mergers and acquisition activities. They also underwrite debt and equity securities issued by mining companies. These transactions that the banks advise on are very complex and involve a lot of brainpower and man-hours. For these services, banks earn fees. Part of these fees is guaranteed despite the outcome of the deal, while some fees are contingent upon the deal being completed. Where a deal is not completed, the banks face the risk of not generating the contingent fee income.

The fees generated by the banks are also dependent on the economic cycle. Very often in times of commodity booms, investment banks generate additional mining fee income and the reverse is the case when there is a commodity slump.  Employees in the commodity division often benefit in form of additional bonuses when the overall business condition is positive. Employees get reduced or no bonuses if the bank’s fee income is reduced due to poor business conditions.

According to Thomson Reuters and Freeman Consulting, for the period 1 January 2011 to 28 September 2011, the combined global investment banking fee income generated from the global mining sector was $6.9bn. In 2010, the total fee generated from the mining sector was $8.02bn.

Miners: are involved in the extraction of minerals from under the earth. They either work directly for the mining companies or are employed by contractors. Their reward comes in form of salaries and bonuses. The salary component is fixed, while the bonus element is tied to productivity. Sometimes, due to the salary level and in order to claim the bonuses , miners are motivated to take excessive risks, which could endanger their lives.

The average net monthly salaries (based on 2005 USA Purchasing power) of miners in some countries are detailed below:

Source: The International Average Salary Income Database

Although the salaries earned by the miners may be enough to meet their basic needs, however, the question to ask is: are they rewarded adequately for the risk they face in carrying out their responsibilities?

Miners face a myriad of risks when performing their duties. Coal mines often produce methane gas, a toxic asphyxiating gas. This gas is highly inflammable, causing coal dust explosions, which is dangerous for miners. Miners also face danger from rock slips and inrushes of water, which could cause the walls of the underground tunnel to collapse. They also face the risk of getting trapped in the mine and getting starved of oxygen. The roof could also give in resulting in death. In some instances, miners also face the risk of dying from carbon monoxide poisoning. They also face the risk of developing elements of claustrophobia especially when trapped inside the mine. A number of miners have also been buried under crushed ore and rock.

While the above-mentioned risks usually result in immediate death for the miners, they also suffer long-term side effects due to the nature of their job. Due to working under very high temperature, they are often inflicted with heat related sicknesses such as heat stroke. They also develop respiratory related ailments such as silicosis and black lung disease due to exposure to crystalline dust, which they inhale while drilling.

Way forward

Miners just like the mining executives, commodity traders and investment bankers engage in a risky activity. It is therefore rational that miners should be adequately rewarded for the risk that they take. However, unlike other players in the commodity value chain who are handsomely rewarded for the risk they take and the services they render, the miners fall short in terms of remuneration on a risk-adjusted basis.

Contrary to other members on the commodity value chain, miners have a higher probability of dying in the cause of their work, due to the level of risk involved. Miners upside rewards are limited and small, whereas the downside risk is very severe. In a worse case scenario, the mining executive, commodity trader and investment banker could lose their jobs, face imprisonment or forfeit their bonuses; however their life is still likely to be intact. This is not the case for the miner who could lose his life in a worse case scenario. Despite the differences in the job risk profile, the mining executive, trader and bankers are adequately rewarded and often receive bonuses running into millions of Dollars.

While efforts are continuously being put in place to improve safety in the mines, miners still need to be adequately rewarded for the risks they face.

To redress this asymmetric imbalance, it is imperative for some of the upside generated by the advisors, mining executives and commodity traders to trickle down to the miners who bear the greatest risk. After all without the miners to extract the resources from underneath the earth, there would be fewer commodities to trade; fewer deal activities and lower income generated by mining companies, thereby resulting in lower remuneration for commodity traders, investment bankers in the bank’s commodity division and mining executives.

Conclusion

In conclusion, I would like to clarify what I am saying and what I am not saying regarding rewarding miners for the risk they face in carrying out their jobs.

I am not saying that capitalism is bad or that it should be scrapped. This article does not promote a leftist, socialist or communist agenda; I am not saying that the bonuses paid to commodity traders, investment bankers and mining executives should be discontinued; I am not saying that work carried out by traders, bankers and mining executives are irrelevant.

What I am saying is that miners are human beings and deserve to be treated as such, rather than as statistics and numbers. What I am saying is that those higher up the commodity value chain should allow some of the riches they extract from the commodities to flow down to the lowly paid miners . There is enough wealth from under the ground to satisfy all players in the commodity value chain. What I am saying is that miners could, should and must be adequately rewarded for the risk they take.

If any skeptic feels that the miners don’t deserve to be adequately rewarded for the risk they face when extracting minerals, I suggest that he or she should take a pay cut, work in a coal mine for a week, take the lift two thousand meters below the earth and crawl inside a tunnel to extract coal from the pit.

October 2011

© Ahmed Sule

By Ahmed Sule, CFA

suleaos@gmail.com

Introduction

Once upon a time, over twenty-eight years ago, somewhere in Mogadishu, Somalia, a woman gave birth to a healthy baby boy. The child was given the name Mohammed. Three years earlier, in 1980, somewhere in Ghana, another woman gave birth to a healthy baby boy. The child was named Kweku.

At the age of eight, Mohammed left Djibouti (where he was based after his birth) for England to join his father Mr. Farah who was based in the UK at the time. Likewise Kweku also came to England at the age of eleven in 1991.

Life in England and education

Mo (as he was later called) attended Feltham Community College in London where he struggled academically, but excelled athletically. Kweku on the other hand attended Ackworth School, a private boarding school where he excelled academically. He was appointed the Head Boy of the school in his final year. Kweku later attended the University of Nottingham, where he obtained a degree in e-commerce and digital business.

Achievements

After their education, their careers took different paths. Mo became a long distance runner specialising in the 5,000 metres and 10,000 metres races. At the commencement of his career, Mo was an average runner achieving an average placing of seventh in various races at the European and World Athletic Championships between 2005 and 2009.

Three years after graduating from University, Kweku Adoboli secured a job at the blue chip Swiss investment bank UBS. Kweku was very hardworking and extremely intelligent. Within a couple of years of joining UBS in 2006, he rose through the ranks eventually attaining a position as a Director of ETF Trading , earning a seven digit pay packet. Kweku was well loved by his colleagues and was a star trader.

What Kweku achieved in the trading room of UBS, Mo began to achieve on the racing tracks of Europe. Between 2009 and 2010, Mo Farah won three gold medals at the 3,000 metres, 5,000 metres and 10,000 metres events of the European Athletics Championships.

Worldwide fame

The year 2011 was a watershed year for these two hardworking Britons of African descent as the year brought them worldwide attention. At the 2011 World Athletics Championship, which took place in South Korea, Mo competed in the 5,000 metres and 10,000 metres events. Mo won a silver medal at the 10,000 metres event and his crowning moment came on the 4th of September 2011 when he won the 5,000 metres race beating America’s Bernard Lagat. By this feat, Mo Farah became the first British athlete to win a global gold medal at 5,000 metres and a medal over 10,000 metres.

Exactly eleven days later on 15 September 2011, Kweku Adoboli was catapulted onto the world stage as it was revealed that he was alleged to have lost his employer $2bn as a result of a rogue trade. The amount lost by Kweku was the biggest loss ever accrued by a single trader in British financial history. Kweku made headline news all over the world and his face was adorned on the front pages of the tabloids, the broadsheets and the financial newspapers. Kweku was eventually arrested and has been charged with fraud. As at the time of writing, he is yet to be convicted.

Analysis

Mo and Kweku are both British citizens who have spent 70% and 64% of their lives respectively in England. They are also products of the British sports and financial institutions respectively in addition to the British educational system. Although they are of African descent, they are British by culture, citizenry and fame.

However, at the peak of their fame, one notices an asymmetric treatment of their recognition as Britons. While most people have recognized Mo as British, the reverse is the case for Kweku who has been widely described as African.

To illustrate my point, I highlight below references in the press to both Kweku and Mo at the peak of their fame:

04 September 2011 to 05 September 2011

“Great Britain’s Mo Farah crosses the finish line to win the 5,000m title at the World Athletics Championships in Daegu” – AP

“Few British athletes have sacrificed more to win, and he was elated with what he had achieved” – Guardian

“Mo Farah claims place among British all-time greats with World title triumph”

- Daily Mirror

“Brendan Foster believes Mo Farah is Britain’s greatest ever long distance runner”

- Daily Mail

“Patience, patience, patience. Those were the last words of advice Mo Farah received from his American coach, Alberto Salazar, before he went to the start line for his 5,000 metres final. Britain must give thanks that the Londoner is a good listener”

-Daily Telegraph

“MO FARAH became the first Brit to win a global 5,000m title and then roared: ‘Bring on 2012’ “- The Sun

and here are comments from a number of blogs

“well done for all in Britain”

“Mo got the tactics just right in the 5k. Up there with the best of British distance running and a great guy.”

15 September 2011 to 16 September 2011

“From Ghana to the City: the rise of a trader who had it all”- The Telegraph

“Adoboli, British-educated and of Ghanaian descent, did not enter pleas to the charges when they were set out at the magistrates court”.- Guardian

“The Ghanaian, who was privately educated in Britain and is the son of a retired UN worker, is accused of being responsible for the biggest loss ever accrued by a single trader based in London” – Daily Mail

“Adoboli appeared before City of London Magistrates’ Court this afternoon.  During the fifteen minute hearing, the well-built Ghanaian was handed a tissue from the clerk as he wiped a tear away”.- The Sun

“Vickers, silver-haired and a knighted academic, is a far cry from the 31-year-old party-loving Adoboli of African origin. Still, they are in the spotlight this week and inextricably linked.”- Business Standard

“Educated at an exclusive school in a picturesque patch of English countryside, Ghana-born trader Kweku Adoboli was known to neighbors as a polite and well dressed young man who mixed grueling hours in London’s financial district with a lavish social life in the capital’s nightspots.” – AP

and here are comments from a number of blogs

“Thought so when I heard his name, looks Nigerian, fraud and scams are endemic to these people, I always used to tell my clients never accept payment from Nigeria except in hard cash.”

“The bank that trusts a Nigerian employee (Kweku Adoboli) with money is a bank that’s about to go out of business rapidly.”

Conclusion

As the saying goes, “success has many fathers, while  failure is an orphan”. Could this explain why Mo Farah is referred to as British while the public forgets his Somalian roots and why Kweku Adoboli is referred to as Ghanaian, Nigerian or African and his British affiliation is easily forgotten?

Would Kweku have been referred to as Ghanaian and not British if  he won the Nobel Prize for Economics? Would Kweku have been referred to as African and not British if  he found the cure for cancer? Would Kweku have been referred to as Ghanaian born and not British if  he won the Olympics 100 metres final?

Or

Would Mo have been referred to as British and not Somolian if  he was found to be a terrorist? Would Mo have been referred to as British and not African if  he failed a drug test?  Would Mo have been referred to as British and not Somolian born if  he was a serial killer?

It is time for Britons of African descent or Africans of British birth to be recognized as either Africans or Britons irrespective of success or failure, fame or notoriety, good or evil; after all Brits of Jewish descent are recognized as Brits; Brits of Australian descent are recognized as Brits and Brits of American descent are recognized as Brits.

Ahmed Sule, CFA

suleaos@gmail.com

September 2011