The rise of Rishi and the contradictions of multicultural Britain

Rishi Sunak’s spectacular rise in British politics has understandably drawn a great deal of global attention. His achievements are indeed for the history books: the first ever non-white British Prime Minister of Indian heritage who is also a practicing Hindu; the youngest in more than 200 years. His conspicuous status as one of the richest Prime Ministers in British history owes much to his marriage to Ms Akshata Murthy, the daughter of the Indian tech billionaire Narayana Murthy. Rishi Sunak, like very many British former Prime Ministers, is the beneficiary of elite education (Winchester College, Oxford, Stanford Business School).

Image 1: Rishi Sunak starts his first day as PM


In  September, it appeared that Rishi Sunak was destined to become the ‘nearly man’ having lost comprehensively to Liz Truss when the rank-and-file members of the Conservative party voted for her in droves. There was a certain irony in the ascension of Liz Truss because Rishi Sunak was blessed with a strong show of support by his fellow MPs but the plebians in the party decided to disregard the collective will of the plutocrats in Parliament. 

Fate smiled on Rishi Sunak when the Prime Ministership of Liz Truss imploded spectacularly in the wake of her pristine neoliberal agenda of using unfunded tax cuts, primarily directed towards the rich, to drive growth. The ‘markets’ rebelled at such fiscal profligacy at a time of high inflation and rising public indebtedness  spelling the end of Ms Truss and her Prime Ministership. She could only depart with the indelible label of the shortest serving Prime Minister in British history. This paved the way for Rishi Sunak’s rise facilitated by the ‘kingmakers’ of the Conservative Party (the 1922 Committee) who changed the rules of selection to give a very high degree of weight to a candidate’s popularity among MPs. The only remaining contender (Penny Mordaunt) did not stand a chance, while the disgraced former Prime Minister Boris Johnson, seeking a triumphant return, simply gave up. Rishi Sunak was duly anointed as the leader of the Conservative Party without even having to seek endorsement from rank-and-file members.

Does the rise of Rishi Sunak in British politics  herald a new era for ethnic minorities in multicultural Britain? As someone who lived in the UK for ten years during the early 1970s and early 1980s as a student (A levels and University education), I was struck by how far Britain of that period has evolved. I still recall the racist slurs (‘Paki’) that were occasionally directed at me and my family and the horrendous bashing from racist thugs that two of my friends endured. As Aamna Mohdin notes, ethnic minorities at the time were subjected to a ‘sustained campaign of terror’ by nativist agitators. Furthermore, in 1980, the year Rishi Sunak was born, there was not a single person of colour in the British Parliament. Multicultural Britain of the 21st century has thankfully moved beyond the primitive rage of the nativists of the 1970s and 1980s.

Image 2: ‘Skinheads’ in the 1980s notorious for being associated with ‘Paki-bashing’.


It is thus legitimate to ask: does the phenomenal political elevation of Rishi Sunak mean, as Indian politician Shashi Tharoor who is also a fierce critic of British colonial rule says, that Britain has ‘outgrown racism’. I am not so sure. I like to think that the British Conservative Party consists of overt racists and forward-looking realists prepared to allow for pragmatic accommodation with ethnic minorities.  Racists are captive to primordial emotions that overcome their judgements. Hence, they yearn for an insular and nativist agenda that belies current circumstances. Realists know how to hide their racial prejudices while having full faith in the superiority of Western/European civilisation. Realists know that the UK, for decades now, has embarked on an irreversible path towards a multicultural, multi-faith future. Realists realise that there are many potential Rishis in waiting. They can no longer be ignored as natives who serve ‘vindaloos’ to white clients or mind the corner store through all sorts of odd hours. Furthermore, realists feel much more at home with the ‘pucca sahibs and begums’ of colour rather than the ‘white trash’ in some forgotten part of Northern England who can’t even speak English with the right accent. More importantly, the realists are fully aware that these pucca brown sahibs and begums can be relied upon to project a ‘holier-than-thou’ attitude to demonstrate their Britishness. Hence, one has the glaring example of Suella Braverman who has returned as home secretary to continue her role as aggressive culture warrior and who is keen to pursue her anti-immigration agenda. She is also on record as saying that Britain should not feel apologetic about its colonial past. In sum, I would argue that the realists in the Conservative Party are happy to have the fig leaf of diversity reflected in Rishi Sunak and many of his colleagues who are in the frontbench.

Video insert of Suella Braverman extolling the virtues of the British Empire

There are multiple reasons to believe that Rishi Sunak is most unlikely to disrupt the status quo of an iniquitous society that cuts across class and race. Hence, the Conservative Party is in a safe pair of hands. His coronation does not connote a new era for multicultural Britain. Rishi Sunak is a self-proclaimed ‘proud Thatcherite’. He voted for Brexit. He believes in a low tax, fiscally conservative regime. He will be preoccupied with soothing the frayed nerves of the markets through fiscal consolidation regardless of its socio-economic consequences. This is a conventional Conservative way of responding to economic challenges. Hence, one might see a replay of the fiscal austerity program under David Cameron that ‘broke Britain’

Image 3: Protests against fiscal austerity in UK


Broken Britain today manifests itself in many ways, but most notably in large-scale poverty and deprivation. According to the comprehensive poverty line devised by the Social Metrics Commission, 22 percent of the population were deemed to be poor even before COVID-19. Ethnic minorities were conspicuous for very high poverty rates. Other surveys show that nearly 5 percent of the population are ‘food insecure’ with a sustained increase in the utilisation of foodbanks. With an incipient energy crisis and the lingering effects of COVID-19, poverty in the UK is likely to get worse. Do not expect Rishi Sunak to acknowledge these challenges and seek to act upon them.  It is only a matter of time before the first person of colour to become British Prime Minister shows his true ideological colours.

Image 3: A landmark report on poverty in Britain

The curious case of Mr Ahmed Fahour

As media and commentators are busy analyzing whether Mr Ahmed Fahour was pushed or he jumped, the crux of the matter is executive pay. Mr Fahour  resigned this week amid controversy over his $5.6 million pay-packet. ABC news radio  this morning (24 February 2017) dubbed him the ‘highest paid postman in the world.’  Prime Minister Malcolm Turnbull  commented that  the pay is excessive. Other political leaders such as Senator Nick Xenophon commented “that’s  a lot of postage stamps…” Senator Pauline Hanson was also disgusted with the pay-packet which consists of $4 million salary and $1.2 million bonus.

Whether Mr Fahour is a postman or not, he should be given the due credit  of turning around Australia post from last year’s $222 million loss to $36 million profit this year. This is no mean feat – an improvement of $258 million in one year!  So what went wrong with Mr Fahour?

There are always two sides of the argument. As questionable pay practices are abundant, there is also an element of jealousy when we talk about executive pay. The average citizen or the average shareholder is baffled  by CEO pay. It appears as a mystery why CEOs are paid so much. CEO pay process is highly complex. Firm size, firm profitability, firm growth, firm’s business risk,  and business complexity – all contribute to CEO pay.Besides, we need to value the talent and  the strategic leadership they bring to the corporation.

Whether we like it or not, although Australia Post is a government-owned entity, it has to make a profit, otherwise taxpayers would be subsidizing its operations. And Australia
Post has to survive in a world of  digital disruption where we are increasingly abandoning the tradition ways of communication (‘snail mail’), thus adversely affecting postal business. If Mr Fahour  had been the CEO of a public-listed company, he  would have no issue of receiving this pay-packet. Further, it  is wrong to compare his salary with other government executives or political leaders such as the Prime Minister because  company CEOs and political leaders (or government officials) have very different jobs.

While  there is legislation  such as the “two strikes” rule to  rein in questionable pay practices ( see Monem and Ng, 2013) in public-listed corporations, there is no similar regulation for government-owned entities which are expected to be self-sustained and economically viable. Hence, whether Australia Post is a government office like Centrelink  or a profit-oriented business corporation needs to be settled first.

Paul Romer at the World Bank: a re-assertion of US influence?

When Paul Romer became the Chief Economist of the World Bank last month, reactions from the media were largely positive. However, to Helmut Reisen, former head of research at the OECD Development Centre, Romer’s ascendancy reflects the unfortunate reversal of a welcome practice of appointing the World Bank’s Chief Economists from emerging economies (at least in terms of heritage if not necessarily in terms of institutional affiliation) as Justin Lin and Kaushik Basu were. It is likely, as Reisen suggests, that one is witnessing the re-assertion of US influence on a major multilateral institution. Perhaps this is a reaction to the putative influence of countries from the BRICS, most notably China, as new sources of development finance.

The IMF and fiscal consolidation: a case of business as usual ?

Three leading IMF economists (Jonathan Ostry, Prakash Lougani, Davide Furceri ,2016) offer the following refreshing thoughts on fiscal austerity as part of a general critique of neoliberalism:[1]

Austerity policies … generate substantial welfare costs …and worsen employment and unemployment. The notion that fiscal consolidations can be expansionary (that is, raise output and employment), in part by raising private sector confidence and investment, has been championed by, among others, Harvard economist Alberto Alesina in the academic world and by former European Central Bank President Jean-Claude Trichet in the policy arena. However, in practice, episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output. On average, a consolidation of 1 percent of GDP increases the long-term unemployment rate by 0.6 percentage point and raises by 1.5 percent within five years the Gini measure of income inequality … In sum, the benefits of some policies that are an important part of the neoliberal agenda appear to have been somewhat overplayed….In the case of fiscal consolidation, the short-run costs in terms of lower output and welfare and higher unemployment have been underplayed, and the desirability for countries with ample fiscal space of simply living with high debt and allowing debt ratios to decline organically through growth is underappreciated.

So far, so sound. But…what has the IMF proffered in practice through its bilateral surveillance advisory services that are typically channelled via the Article IV consultations? Brad Setser from the Council on Foreign Relations thinks that there is a disconnect between what the Fund preaches – or least some of its more progressive voices do – and what it practices in operational terms. He notes:

…the Fund is advocating a 2017 fiscal consolidation for the euro zone, as the consolidation the Fund advocates in France, Italy, and Spain would overwhelm the modest fiscal expansion the Fund proposed in the Netherlands (The IMF is recommending that Germany stay on the fiscal sidelines in 2017).

The same seems to be true in East Asia’s main surplus economies (China, Japan, Korea)…[2]

A 2016 ILO study – which I happened to supervise – found that in more than 90 out of 100 low and middle-income economies, the IMF Article IV consultations recommended fiscal consolidation. [3]








Women on Boards: The Glass Ceiling?

In the most of developed Western democracies, women and men are present  side by side in politics, government, sports and business.  Australia is far behind in terms giving equal share to women, at least in politics and business. Women comprise 46 per cent of all employees in Australia. But they hold only 14.2 per cent of board chairs, 23.6 per cent of directorships, and 15.4 per cent of CEO roles. Although  there have been recent calls for putting more women in corporate boards and  there had been at least one attempt to introduce a bill requiring more women  on corporate boards, only time will tell how far we can go. Is it the “glass ceiling”? Is it the “competency gap”? Or what?

One is a token, two is a presence, three females on a board is a voice.