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Soaring food and fuel prices are destabilizing countries on the brink

Published

3 years ago

April 9, 2022

Soaring food and fuel prices are destabilizing countries on the brink

Now, greater than a decade after the Arab Spring, world meals costs are hovering once more. That they had already reached their highest degree on report earlier this yr because the pandemic, poor climate and the local weather disaster upended agriculture and threatened meals safety for hundreds of thousands of individuals. Then got here Russia’s battle in Ukraine, making the scenario a lot worse — whereas additionally triggering a spike in the price of the opposite each day important, gas.

The mixture may generate a wave of political instability, as individuals who have been already pissed off with authorities leaders are pushed over the sting by rising prices.

“This can be very worrisome,” mentioned Rabah Arezki, a senior fellow at Harvard’s Kennedy Faculty of Authorities and former chief economist on the African Growth Financial institution.

“I do not suppose folks have felt the complete impression of rising costs simply but,” mentioned Hamish Kinnear, a Center East and North Africa analyst at Verisk Maplecroft, a world danger consultancy.

Classes from the Arab Spring

Within the run-up to the anti-government protests that grew to become often known as the Arab Spring — which started in Tunisia in late 2010 and unfold by the Center East and North Africa in 2011 — meals costs have been climbing sharply. The Meals Worth Index from the United Nations’ Meals and Agriculture Group reached 106.7 in 2010 and jumped to 131.9 in 2011, then a report.

“Mohamed Bouazizi did not set himself on hearth as a result of he could not weblog or vote,” an Emirati commentator wrote in January 2011, referring to the road vendor whose protest act helped launch the revolution in Tunisia and, in the end, the Arab world. “Individuals set themselves on hearth as a result of they can not stand seeing their household wither away slowly, not of sorrow, however of chilly stark starvation.”

Circumstances in particular person nations differed, however the greater image was clear. Surging wheat costs have been a serious a part of the issue.

The scenario now could be even worse than it was then. World meals costs have simply hit a brand new report excessive. The FAO Meals Worth Index printed Friday hit 159.3 in March, up virtually 13% from February. The battle in Ukraine, a serious exporter of wheat, corn and vegetable oils, in addition to harsh sanctions on Russia — a key producer of wheat and fertilizer — is predicted to spur additional value will increase within the coming months.

“Forty p.c of wheat and corn exports from Ukraine go to the Center East and Africa, that are already grappling with starvation points, and the place additional meals shortages or value will increase may stoke social unrest,” Gilbert Houngbo, head of the Worldwide Fund for Agricultural Growth, mentioned final month.

Including to the ache is the surge in power costs. World oil costs are virtually 60% greater than they have been a yr in the past. The price of coal and pure fuel has spiked, too.

Many governments are struggling to guard their residents, however fragile economies that borrowed closely to make it by the 2008 monetary disaster and the pandemic are most weak. As development slows, hurting their currencies and making it tougher to maintain up with debt funds, sustaining subsidies for meals and gas will probably be troublesome, particularly if costs maintain climbing.

“We are actually in a scenario the place nations are indebted,” Arezki mentioned. “In consequence, they haven’t any buffers to attempt to comprise the tensions that can emerge from such excessive costs.”

In line with the World Financial institution, near 60% of the poorest nations have been “already in debt misery or at excessive danger of it” on the eve of the invasion of Ukraine.

The place tensions are simmering

Asia: In Sri Lanka, an island nation of twenty-two million, an financial and political disaster is already boiling over, with protesters taking to the streets in defiance of curfews and authorities ministers stepping down en masse.

Grappling with excessive debt ranges and a weak financial system reliant on tourism, Sri Lanka was pressured to run down its reserves of international foreign money. That prevented the federal government from making funds for key imports akin to power, creating devastating shortages and forcing folks to spend hours lining up for gas.

Sri Lanka is facing an economic and political crisis. Here's what you need to know

Its leaders have additionally devalued its foreign money, the Sri Lankan rupee, as they attempt to safe a bailout from the Worldwide Financial Fund. However that simply made inflation worse at residence. In January, it reached 14%, virtually double the speed of value will increase in the US.

In the meantime, Pakistan’s Khan faces a vote of no confidence on Saturday within the nation’s parliament. Whereas his political issues date again years, he is now battling claims of financial mismanagement as the price of meals and gas leaps and the federal government depletes its international trade reserves.

“The extent of financial chaos has united opposition to Imran Khan,” Kinnear of Verisk Maplecroft mentioned.

Center East and Africa: Specialists are additionally expecting indicators of political misery in different nations within the Center East which are closely depending on meals imports from the Black Sea area, and infrequently present beneficiant subsidies to the general public.

In Lebanon, the place almost three-quarters of the inhabitants was residing in poverty final yr as the results of a political and financial collapse, between 70% and 80% of imported wheat comes from Russia and Ukraine. Key grain silos have been additionally destroyed throughout the 2020 explosion on the Beirut port.

And Egypt, the world’s largest purchaser of wheat, is already seeing huge stress on its enormous subsidy program for bread. The nation not too long ago set a hard and fast value for unsubsidized bread after costs spiked, and is making an attempt to safe wheat imports from nations like India and Argentina as a substitute.

With an estimated 70% of the world’s poor residing in Africa, the continent may also be “very uncovered” to rising meals and power costs, Arezki mentioned.

Droughts and battle in nations like Ethiopia, Somalia, South Sudan and Burkina Faso have created a meals safety disaster for greater than 1 / 4 of the continent’s inhabitants, the Worldwide Committee of the Purple Cross mentioned this week. The scenario dangers getting worse within the coming months, it continued.

Political instability has already been constructing in components of the continent. A sequence of coups have taken place in West and Central Africa because the begin of 2021.

Europe: Even nations with extra developed economies, which have larger buffers to protect residents from painful value will increase, will not have the instruments to completely cushion the blow.

1000’s of protesters gathered in cities throughout Greece this week to demand greater wages to counter inflation, whereas France’s presidential election is narrowing as far-right candidate Marine Le Pen performs up her plans to scale back the price of residing. President Emmanuel Macron’s authorities mentioned final month it was contemplating issuing meals vouchers in order that center and low-income households may afford to eat.

— Jessie Yeung, Rhea Mogul and Sophia Saifi contributed reporting.

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Joe Biden says ‘oligarchy’ emerging in US in final White House address

Published

1 hour ago

January 16, 2025

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Joe Biden says ‘oligarchy’ emerging in US in final White House address

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US President Joe Biden has warned that an “oligarchy is taking shape in America” that risks damaging democracy, as he blasted an emerging “tech industrial complex” for delivering a dangerous concentration of wealth and power in the country.

Biden’s comments during a farewell address to Americans from the Oval Office on Wednesday night amount to a veiled attack on Donald Trump’s closest allies in corporate America, including tech billionaire Elon Musk, just five days before he transfers power to the Republican.

Biden said he wanted to warn the country of the “dangerous concentration of power in the hands of a very few ultra-wealthy people” and the danger that their “abuse of power is left unchecked”.

He cited late president Dwight Eisenhower’s warning in his 1961 farewell address of a military-industrial complex and said the interaction between government and technology risked being similarly pernicious.

“I’m equally concerned about the potential rise of a tech-industrial complex that could pose real dangers for our country as well. Americans are being buried under an avalanche of misinformation and disinformation, enabling the abuse of power. The free press is crumbling. Editors are disappearing. Social media is giving up on fact checking,” Biden said.

Biden’s words were a reference to the world’s richest man, Musk, the owner of social media platform X and the founder of electric-vehicle maker Tesla, who gave massive financial backing to Trump’s campaign and has become one of his closest allies during the transition to Trump’s new administration.

Some of Silicon Valley’s top executives, from Jeff Bezos of Amazon to Mark Zuckerberg of Meta, have also embraced Trump since his electoral victory and are expected to have prime spots at the inauguration ceremony in Washington on Monday.

Biden also used his remarks to cast a positive light on his one-term presidency, which ended with the big political failure of him dropping his re-election bid belatedly in late July, passing the torch of the campaign against Trump to vice-president Kamala Harris — an effort that ended in a bitter defeat.

Biden’s approval ratings have hit new lows as he bows out from the presidency and a political career in Washington that has spanned more than five decades. Just 36.7 per cent of Americans approve of his performance on the job, and 55.8 per cent disapprove, according to the FiveThirtyEight polling average.

Biden said he hoped his accomplishments would be judged more favourably in the future.

“It will take time to feel the full impact of all we’ve done together, but the seeds are planted, and they’ll grow and they’ll bloom for decades to come,” he said.

Biden has not only faced seething criticism from Republicans, but also rebukes from Democrats who blame him for seeking re-election despite his advanced age. He is now 82.

Biden’s presidency was defined by a record-breaking jobs market and a robust recovery from the Covid-19 pandemic, as well as a series of legislative accomplishments on the economy. But the pain of high inflation became a massive political vulnerability for him.

In foreign affairs, he took credit for western support for Ukraine after Russia’s full-scale invasion of the country in 2022, but his response to conflict in the Middle East, including staunch support for Israel’s war in Gaza, drew a strong backlash from progressive Democrats, undermining the unity of his political coalition.

It was not until Wednesday, with five days to go before he left office, that Biden — with help from Trump aides — was able to broker a ceasefire deal to free hostages held by Hamas.

“This plan was developed and negotiated by my team and will be largely implemented by the incoming administration. That’s why I told my team to keep the incoming administration fully informed, because that’s how it should be, working together as Americans,” he said at the start of his address.

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Biden touts major wins in farewell address

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1 hour ago

January 15, 2025

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Biden touts major wins in farewell address – CBS Texas

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In his farewell address, President Biden warned an “oligarch” of “ultrarich” threatens America’s future.

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Takeaways From Marco Rubio’s Senate Hearing

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8 hours ago

January 15, 2025

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Takeaways From Marco Rubio’s Senate Hearing

Marco Rubio, the Republican senator from Florida named by Donald J. Trump to be the next secretary of state, was warmly welcomed by senators from both parties at his confirmation hearing on Wednesday. He has served for years on the Foreign Relations and Intelligence Committees in the Senate, and is known as a lawmaker devoted to the details of foreign policy.

“I believe you have the skills and are well qualified to serve as secretary of state,” Senator Jeanne Shaheen, Democrat of Hampshire, said in her opening remarks.

The notable lack of tension at the hearing indicated that Mr. Rubio would almost certainly be confirmed quickly.

Republican and Democratic senators agree on the biggest U.S. challenges.

From the lines of questioning, it was clear what senators want Mr. Rubio and the Trump administration to focus on: China, Russia, North Korea and Iran. Mr. Rubio himself pointed to those four powers — what some call an “axis” — in his opening remarks.

They “sow chaos and instability and align with and fund radical terror groups, then hide behind their veto power at the United Nations and the threat of nuclear war,” he said. As permanent members of the U.N. Security Council, China and Russia have veto power over U.N. resolutions.

Mr. Rubio repeatedly singled out the Chinese Communist Party for criticism, and, unlike Mr. Trump, he had no praise for any of the autocrats running those nations.

He did say the administration’s official policy on Ukraine would be to try to end the war that President Vladimir V. Putin of Russia started, and that leaders in both Kyiv and Moscow would need to make concessions. U.S. officials say Russia has drawn its allies and partners into the war, relying on North Korea for troops and arms, Iran for weapons and training, and China for a rebuilding of the Russian defense industrial base.

Rubio’s stance on Israel and Gaza is firmly within a foreign policy consensus in Washington.

Mr. Rubio defended Israel’s conduct in the war in Gaza, blaming Hamas for using civilians as human shields and calling the deaths of tens of thousands of Palestinians in Gaza, most of them non-combatants, “one of the terrible things about war.”

He expressed concern about threats to Israel’s security. “You cannot coexist with armed elements at your border who seek your destruction and evisceration, as a state. You just can’t,” he said.

When asked whether he believed Israel’s annexing Palestinian territory would be contrary to peace and security in the Middle East, Mr. Rubio did not give a direct answer, calling it “a very complex issue.”

Mr. Rubio’s hearing was about two hours in when the committee’s chairman announced that Israel and Hamas had sealed an agreement to begin a temporary cease-fire and partial hostage release in Gaza. An initial hostage and cease-fire agreement, reached in November 2023, fell apart after a week.

Rubio supports U.S. alliances, despite Trump’s persistent attacks on them.

Mr. Rubio called the North Atlantic Treaty Organization, which Mr. Trump has repeatedly criticized, “a very important alliance” and insisted that Mr. Trump was a NATO supporter. But he also backed Mr. Trump’s argument that a strong NATO requires Europe to spend more money on its collective defense.

The United States, he said, must choose whether it will serve “a primary defense role or a backstop” to a self-reliant Europe.

Though many Senate colleagues praised him, Rubio has detractors.

Some prominent Trump supporters remain distrustful of Mr. Rubio. They recall his vote to certify the 2020 election results despite Mr. Trump’s false claims of election fraud. And they consider Mr. Rubio’s foreign policy record dangerously interventionist.

Mr. Rubio has long been a hawkish voice on national security issues, often in ways that clash with Mr. Trump’s views, even if the ideas are conventional ones among centrist Republican and Democratic politicians.

In the past, Senator Rand Paul, Republican of Kentucky, has criticized Mr. Rubio for advocating aggressive American intervention overseas. Mr. Paul has been outspoken in pushing for less use of U.S. troops abroad and is skeptical about whether economic sanctions can lead to positive outcomes.

On Wednesday, Mr. Paul pointedly asked Mr. Rubio whether he saw any way to work with China rather then persisting in attacks on Beijing, and he also questioned the wisdom of many American and European policymakers who insisted that Ukraine must be admitted to NATO.