A wake-up call

Published : Feb 11, 2011 00:00 IST

In Amman, Jordan, women protesting against price rise hold placards with bread taped on them, on January 14. - MUHAMMAD HAMED/REUTERS

In Amman, Jordan, women protesting against price rise hold placards with bread taped on them, on January 14. - MUHAMMAD HAMED/REUTERS

The uprising in Tunisia that brought down the 23-year-old government of President Ben Ali may be a sign of things to come.

THE regime change brought about in Tunisia, where the people spontaneously took to the streets to protest against rising prices and unemployment, is a wake-up call for governments around the world. It was the first time that a popular uprising in the Arab world brought an end to an authoritarian regime. The main reasons for the revolt were food inflation and unemployment.

Tunisia was considered by the West and international banking institutions as one of the best run states in the Arab world. The month-long jasmine revolution (named after the country's national flower) of the Tunisian people started after an unemployed graduate set himself on fire in protest against the confiscation of his food cart, the sole means of survival for him and his family. The young man's desperate act ignited public opinion in a country where the security apparatus was omnipresent. A 150,000-strong internal security force kept a close watch over a population of 10.6 million.

Even as the protests were going on, large private agricultural monopolies in the country increased the prices of fruits and vegetables, further stoking the fires of popular anger. The protests had started with people demanding jobs and affordable food. But after a brutal crackdown by the security forces, the people's wrath turned against their long-serving President, Zine El Abidine Ben Ali. The President, a close ally of the West, had ruled unchallenged since the mid-1980s. His unceremonious departure from the country on January 14 has sent alarm bells ringing in presidential palaces round the region.

Meanwhile, inspired by the events in Tunisia, anti-government demonstrations have begun in other countries in the region. The main reason is rising food prices and unemployment. In neighbouring Algeria, protests started immediately after the self-immolation in Tunisia. The high prices of basic necessities are once again driving people to the barricades. In the wake of the protests, the government in Algiers reduced the price of bread and some other essential food items.

In the early 1960s, governments in the region had bought peace with their subjects by subsidising the prices of basic food items, especially bread and milk. But the social compact collapsed after the governments were pressured into embracing International Monetary Fund (IMF)-inspired market policies in the late 1980s. The decontrol of prices that followed led to bread riots in Algeria and Jordan. The riots forced the Algerian government to introduce multiparty democracy in 1988, which saw the mildly Islamist Islamic Salvation Front (FIS) getting voted to power in 1991. That election was annulled but now, after 20 years, things seem to be going back to square one.

Incidents of self-immolation have been reported in Algeria, Mauritania and Egypt. Media reports have said that the situation is explosive in the Maghreb and the poorer Arab states of West Asia. Soaring food prices, extensive joblessness and a widening gap between the rich and the poor are the main complaints, Financial Times reported recently. Egypt particularly seems to have a serious problem. It is the Arab country with the biggest population. Sixty per cent of its 80-million-strong population is below the age of 30. Nine out of 10 in this age group are unemployed. The structural adjustment programme the government implemented resulted in 40 per cent of the population living on less than $2 a day. As in India, the prices of basic necessities have increased substantially in recent months. The government in Cairo has taken emergency measures to import corn. Egypt's close relations with the United States have let it temporarily weather the storm. A senior Jordanian editor once told this correspondent that if the supply of wheat from the U.S. stopped, there would be food riots in Egypt.

In recent weeks Libya has reduced the taxes on wheat-based products, Morocco has increased subsidies on wheat, and Jordan has cut taxes on fuel and basic food items. There was a demonstration in the comparatively well-off Oman too. In the third week of January, around 2,000 Omanis demanded that the government do more to tackle the high cost of living. Banners held by the demonstrators said No to high prices and No to merchant's greed. Meanwhile, the ruler of Kuwait announced the distribution of $4 billion and free food to all citizens for 14 months.

The rest of the world is also facing similar challenges. Russia and China are planning to import massive amounts of grain this year to meet domestic shortfall. Massive flooding in Pakistan and Australia and a heat wave in Russia have seriously affected the global wheat and rice output. Scientists are predicting more floods and droughts. The price of staple foods and vegetables are at their highest in two years. Global wheat and maize prices jumped 30 per cent in three weeks by early January.

Opinion is still divided over whether the current situation is comparable to that of 2008, when there were serious food riots in 25 countries, most of them in Africa. In September 2010, serious food riots in Mozambique claimed the lives of 13 people. The riots took place after the government increased bread prices by 30 per cent. This time, according to experts, sub-Saharan Africa is much better off as even many drought-prone countries such as Niger had bountiful harvests of foodgrain.

The governments of Kenya, Uganda, Nigeria, Indonesia, Brazil and the Philippines have issued warnings of food shortages this year. Many governments are not taking any chances. The global surge in commodity prices has pushed food prices up all over Latin America. In the region, food typically accounts for one-fifth of a family's budget. The Mexican government is buying corn futures to prevent an unmanageable price rise. In Mexico City, members of the middle class are selling their precious personal items so that they can put food on the table. Late last year in Bolivia, rioting mobs forced the government to go back on its plans for a steep hike in fuel prices. In January, there were protests by workers in Chile against price rise.

Venezuela is among the countries worst hit by inflation, with a rate that has reached 27 per cent. But with oil prices hovering around $100 a barrel and a public distribution system in place, the government is expected to rise to the challenge. Venezuela is among the world's leading oil exporters. Because of rising food costs, inflation in Argentina is around 27 per cent. Rising prices threaten serious turmoil in Argentina and the rest of the region in the coming months as labour unions have started demanding a rise in wages in response to the soaring cost of living. Brazil, like India, is grappling with double-digit food inflation.

In China, food inflation has jumped to double digits and the government has imposed price controls. South Korea took measures in early January to increase the supply of food to help control prices. The United Nation's Food and Agricultural Organisation (FAO) announced in early January that the food price index had hit an all-time high in December 2010.

The FAO said that sugar and meat prices were at their highest levels since documentation of the prices began in 1990 and that the price of wheat, corn, rice and other cereals were at their highest levels since the 2008 crisis. Abdolreza Abbassian, an economist with the FAO, has warned that the international community is entering dangerous territory.

Food inflation has become an issue of concern in many developed countries too. French President Nicolas Sarkozy has asked the World Bank to conduct urgent research on the impact of food prices. France, which currently holds the chairmanship of the G20 grouping of countries, wants a collective response to the excessive volatility in food prices. In the U.S., where income disparity is growing along with unemployment, the government is taking steps to tackle emergency situations that could arise.

The Pentagon's Unified Quest 2011 is a training programme in which soldiers are prepared to handle evacuation and detainment as a response to rioting related to economic disaster. There have been reports in the European media that the U.S. and France have reached a preliminary agreement following the events in Tunisia to create a U.S.-European Union armed force tasked to counter a worldwide uprising that could erupt in the face of a global food crisis. World Bank chief Robert Zoellick recently warned that the world was just one poor harvest away from chaos.

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