A wake-up call
JOHN CHERIAN
The uprising in Tunisia that brought down the 23-year-old government
of President Ben Ali may be a sign of things to come.
People protesting on the streets |
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.
High prices
Meanwhile, inspired by the events in Tunisia, anti-government
demonstrations have begun in other countries in the region. The main
reason is increasing 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 subsidizing 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.
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Carrying the national flag |
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People spontaneously took to the streets to protest against
rising prices and unemployment |
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.
Widening gap
“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 percent of its
80-million-strong population is below the age of 30. Nine out of 10 in
this age group are unemployed.
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Protests still continuing |
The structural adjustment program the Government implemented resulted
in 40 percent 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 has 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 percent 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 percent. 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 percent. 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
percent. 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 Organization (FAO) announced in
early January that the food price index had hit an all-time high in
December 2010.
Food inflation
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 US, where income disparity is growing along with
unemployment, the government is taking steps to tackle emergency
situations that could arise.
The Frontline |