The sharp rise in commodity prices, coupled with budget austerity due to debt to deal with the CVIV-19 pandemic, weakens authoritarian regimes.
By
Analysis. Recent demonstrations in Kazakhstan, Ecuador, Malawi, Iran or Turkey coincide with a soaring energy prices and food. In 2021, inflation accelerated in poor and emerging countries, reaching 50.9% in Argentina, 10% in Brazil and 36% in Turkey, where it has significantly reduced purchasing power and weakened governments.
In 2007 and 2008, the brutal rise in food prices had provoked “hunger riots” in some thirty countries. In 2011, she had fueled the movements of the “Arab Spring”. In the summer of 2021, the United Nations Food and Agriculture Organization warned against potential social disorders.
In developing countries, households spend an average of their budget on food, while food prices, according to the United Nations, increased by 28% in 2021. The inhabitants can not rely on The help of the states, which have already heavily indebted during the Pandemic of Covid-19 and are constrained at the same time to reduce their social spending. The combination of both factors – rising prices and fiscal austerity – is particularly explosive.
This is the withdrawal of a subsidy that, often, has brought out the protesters into the street. In Kazakhstan, the troubles started, in early January, when the government decided to abandon the liquefied petroleum gas ceiling price, a fuel widely used in the country. In Ecuador, the government also faced a large mobilization in the fall of 2021 when it wanted to adjust gasoline prices on the rise in the oil barrel. The imposition of a VAT starting 2021 on certain basic commodities such as cooking oil, Malawi, to reduce the budget deficit, aloud the rise in prices and fueled anger.
Vulnerability / H2>
Gold inflation, powered by bottlenecks in supply chains and massive liquidity injections of central banks in Europe and the United States since the beginning of the pandemic, should remain high at Less until the end of 2022, according to the forecast of the International Monetary Fund. Net importing savings of food, or oil, are the most vulnerable. “The banditry could increase in regions such as the center and northern Kenya, while in Ethiopia, armed groups could take for targets of humanitarian convoys, which would aggravate the situation”, warns the Circle of Institute for Security Studies, based in South Africa.
You have 53.52% of this article to read. The rest is reserved for subscribers.