As today is the official holiday celebrating Dr. Martin Luther King in the United States, I thought it would be good to re-visit a little known aspect of his work. While King was known for social justice and civil rights, he had begun another campaign for global economic justice and was headed to another large gathering in Washington, DC over poverty when he was assasinated. This part of his legacy seems to have died, but this generation of Africans, those on the continent and those in the diaspora, have it within their power to achieve what he sought.
I had the opportunity to visit the Martin Luther King (MLK) memorial a few weeks ago on a business trip to Washington, D.C. It sits in a nice, but small, alcove on the shores of the Potomac River amongst other major memorials.
Unfortunately, a lot of King’s push for economic justice for everyone is falling to the wayside because the generations that followed have lost the true purpose behind the struggle. King’s struggle was not about “me and mine” but “we.” While he was an African American, he was reaching out to all people.
Today, the African American community even with its level of poverty, particularly among our youth, is still one of the major consumer markets in the United States. Africans living in the United States also represent a strong consumer market and have the highest achievement rates in tertiary degrees of any ethnic group. African American businesses generate more revenue per year than any other minority group in the United States. There is enough know-how, spirit, and money in these groups alone to put a major dent in poverty in the U.S. and across the ocean in Africa, but it’s only a few who see the potential or venture out.
There are enumerable ways to change this tide through investment. First, many Africans already send money back to the continent to help family and friends. In some countries, remittances, as they are called, make up a significant portion of a country’s GDP. The amazing thing is that the amounts sent per year are nominal compared to the average middle class income in the United States, which stands in the mid-$30,000 range. If families in Africa receive more than $5,000 per year, they automatically become a part of the growing African middle class. This demonstrates that there is power in small packages.
However, most of this money is distributed for living considerations, so only a small amount gets applied to investment in local businesses that would help develop not only the families involved but the communities in which they live. More recently, there has been a lot of research and discussion about diaspora bonds. The idea is that Africans in the diaspora can invest money in bonds developed by African countries to help their development. After a period of time, African investors would get back their principal with interest. So, people of African descent could diversify their remittance and investment strategy to incorporate diaspora bonds.
I laud the concept, but as with any major governmental and institutional framework, it takes a long time for it to work. Today, with the advent of the Internet and successes in crowdfunding, I think the right mix in this space will far surpass the concept of diaspora bonds. I also think there is greater appeal in crowdfunding as people are more connected to the process and this is a major characteristic of the global youth profile. They want to feel connected and to have their voices heard.
What I expect to see is the activation of the African American, and other African, diaspora take off in the next year or two, but in dynamic, organic waves. As governments will not be able to solve the economic crises alone, people and organizations will start to seek out ways to do it themselves. We are seeing increased social discord around the world with groups like “Occupy Wall Street” cropping up. While I think these groups are great for mobilizing, they will end up of little value if they cannot help solve the issues. They are great sounding boards, but someone has to come behind them with the real solutions.
Just as communities have come together to rebuild around natural disasters, they will come together to rebuild local economies across the globe devastated by crises or the enduring problem of poverty. We can count on it because it is part of our human DNA.
Featured image is of Obama family at MLK memorial in Washington, DC.
This article was first posted as “New Investment Models for Transatlantic Trade in Africa” in October 2011 elsewhere.