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The food price crisis and the Egyptian revolution

Since 2008, rising food prices have resulted in 40 mass riots throughout the globe and the United Nations reports that 37 countries currently face a food crisis.

By Billy Wharton

February 14, 2011 -- Socialist Webzine -- Hidden beneath the spectacular street battles that forced the Egyptian dictator Hosni Mubarak out of office was a trigger that exists in dozens of countries throughout the world – food. Or, more specifically, the lack of it. While commentators focus on the corruption of the dictatorship, or the viral effects of the Tunisian moment or the something akin to an Arab political awakening, the inability of the Egyptian regime to ensure a steady flow of food staples should be viewed as a critical factor driving this seemingly spontaneous movement for freedom.

Egypt is far from an isolated case when it comes to food shortages. Since 2008, rising food prices have resulted in 40 mass riots throughout the globe and the United Nations reports that 37 countries currently face a food crisis. World prices for basic food commodities such as corn, sugar and beef have all spiked in the last 12 months resulting, in many regions, in sharp reductions in food intake. The governments of Kenya, Uganda, Nigeria, Indonesia, Brazil and the Philippines all issued warnings in 2010 about impending food shortages (Guardian, October 26, 2010).

What makes Egypt special in regards to food shortages is the triple convergence of ecological devastation-induced harvest reductions, government corruption and ineptitude, and a resulting reliance on a global food market that is being inflated by global environmental degradation and capitalist speculation.

The Nile River, the great provider of civilisation, sits at the core of the severe environmental decline in the region. An over-reliance on its resources combined with long-term negative effects from damming projects have resulted in water scarcities and yield declines in arable land. The resulting crisis has produced skyrocketing prices for potable water – soft drink is now cheaper than water in many parts of Egypt – and reductions in the planting of necessary crops (BBC Worldwide Monitoring, May 30, 2010).

In November 2010, just a few months before the revolt, the Mubarak government announced severe restrictions in the production of staple crops such as rice. The reduced rice production had spiralling effects. Prices rose sharply, a key nutritional staple was removed from the poor and, because rice is also a key export crop, agricultural labourers were left jobless. All this was done via the usual autocratic decree from Cairo (The Citizen, Dar es Salaam, November 24, 2010.)

The Mubarak government has, for many years, chosen to manage the food crisis with an old combination succinctly summarised by the turn of the 20th century Mexican dictator Porfirio Diaz’s slogan "pan o palo” (bread or the stick). Instead of allowing workers to bargain for wages that might meet the increased food costs, Mubarak repressed the labour movement through a reliance on a police apparatus that had swelled to an estimated one police operative for every 37 citizens. This, while refusing for the last 26 years to raise the minimum wage (AfricaNews, June 23, 2010). Simultaneously, he attempted to create a state monopoly on the production and distribution of low-cost bread. When black market activity threatened this monopoly, he had the military take over the enterprise (USAToday, April 30, 2008).

All of this created a dual food dependency for the country. Egypt remained a main recipient of US aid, about US$1.8 billion annually, and developed a dangerous linkage to global food markets. This link can be seen most clearly in the wheat market, where the Egyptian state was forced to make mass purchases of wheat in order to satisfy rising food demands and maintain social order.

This system seemed to work until Russia, the third-largest exporter of wheat, experienced its worst drought in 50 years in 2010. Prices skyrocketed on the global market and the Egyptian government, the largest importer of Russian wheat, was forced, in August 2010, to pay $270 a ton for wheat that had cost $238 in July (National Post's Financial Post & FP Investing, Canada, August 5, 2010).

Although the government claimed, as late as the middle of 2010, that wheat self-sufficiency was its goal, the country now relies on foreign markets for 40% of its consumption. And the environmental limits imposed by the above-mentioned water scarcity on the Nile ensure that the lack of food self-sufficiency will rise in the future (UN Integrated Regional Information Networks, Nairobi, October 11, 2010).

Though it was a critical strategy to maintain political order, Egyptians do not live on wheat alone. Soaring bread prices, lack of rice and water scarcity intersected with sharp increases in the costs of other basic foodstuffs. This year, vegetable prices soared 50% and meat and poultry increased by 28.6%. The tomato crop was particularly poor this season with harvests declining as much as 75% in some areas (Reuters, October 19, 2010).

Consider then that the revolt in Egypt is more than just a movement for political freedom. It may be one of the first instances of a political movement that exposes the sharp limitations of current global system of food production. The lack of food was a trigger for this uprising, the severing of a final link with a deeply authoritarian regime operating within limits imposed by its own corruption and repression, the natural world and an exceedingly unnatural global market for food.

One lesson that can be drawn from this moment is that it is vitally necessary to create another kind of global system for the production and distribution of food. No amount of democracy in Egypt will solve its food crisis since, for the foreseeable future, the country will be dependent on the global marketplace for critical food supplies. Capitalist values built into these markets ensure that they serve the profit interests of the big food conglomerates. Ecological damage pushes further reliance on these same markets. A new system anchored around socialist notions of global equity and ecological sustainability would serve as a better companion to the demands for political freedom being presented in Egypt and held by people living in many other places in the world.

[Billy Wharton is co-chair of the Socialist Party USA and the editor of the Socialist WebZine. His articles have appeared in the Washington Post, the NYC Indypendent, Spectrezine, MRZine and Links International Journal of Socialist Renewal.]

Comments

Egypt's debt must fall with Mubarak's regime

The debts of Egypt and Tunisia must be cancelled if the people on the streets are to take control of their economy and hold Western countries to account.
Egyptian pound

Photo: Winter Sorbeck.

By Nick Dearden, director, Jubilee Debt Campaign

February 16, 2011 -- In the best tradition of dictators, Hosni Mubarak pillaged Egypt’s economy, and leaves office with as much as US$70 billion in his family’s bank account while he bequeaths $30 billion in debt to the Egyptian people. Zine el Abidine Ben Ali leaves $15 billion to the people of Tunisia, taking a more modest $3 billion for himself. As more regimes come tumbling down, so these injustices will multiply.

The true creditors of Egypt, Tunisia and elsewhere are not the Western states who used loans to prop up their tough guys across the Arab world – they are the people of these countries who suffered under this rule. The West must now repay those debts by opening up their lending to public scrutiny, returning the assets of Mubarak and his cronies that have been banked in Europe and the US, and cancelling unjust debts across the Arab world. The Egyptian people must not continue to pay the bill for Western complicity through large debt repayments.

It is too easy for US and British leaders to issue warm words to the people of these police states who have endured corruption, torture and violations of human rights for decades. In fact Tony Blair has been the most honest appraiser of the situation. While most Western leaders dropped Mubarak so fast that you wonder how his desperately unpopular regime clung onto power for so long, Britain's former Prime Minister called his one time ally "immensely courageous and a force for good".

For the US and Europe, Mubarak was indeed an excellent client. Egypt repays its loans, many of which were undoubtedly run up in the interests of the regime rather than the people, at a rate of around $3 billion a year. This money has diverted what could otherwise have been used to improve the lives of ordinary Egyptians. Since 1981, Egypt has paid the equivalent of $80 billion dollars in debt and interest repayments, helping redistribute money from Egypt's poor to the global rich.

Some of the country's debt is undoubtedly military in nature. Egypt receives more US military support than any country in the world apart from Israel – well over $1 billion a year since Mubarak came to power in 1981. The British Government has allowed UK companies to supply Egypt with as much as £23 million ($37 million) of military equipment in 2008, £16 million ($26 million) in 2009. No doubt this came in useful when Egypt became a major centre for the US’s “war on terror” programme of kidnapping, secret flights and illegal detention and torture.

Egypt currently owes nearly £100 million ($160 million) to the UK. Although the Government refuses to say what Egypt's debt is based on, we know that it relates to British exports through the controversial Export Credits Guarantee Department, largely based on sales which took place early in Mubarak's rule. This shadowy Government department insures British business working in ‘risky’ parts of the world – usually supporting arms, aerospace and fossil fuel industries.

Tunisia faces a similar situation – under Zine el Abidine Ben Ali, the country made repayments well in excess of $40 billion. Again, Ben Ali served Western interests while suppressing his people who finally rose up against his rule in January.

When people have begun to take control of their countries in the past – from apartheid South Africa to Bolivia, from Argentina to Poland – debt has been used as a key means of forcing undemocratic economic policies on those countries. These policies have caused great pain and suffering to the poorest in those societies, and put a block on democracy extending in anyway into the economic sphere. If the revolutions in Tunisia and Egypt genuinely usher in a new era of independence for the people of those countries and if, as seems likely, the spark which has been lit in North Africa spreads across the Arab world, the next step will be holding to account those responsible for decades of kleptocratic and brutal rule.

As well as trying to recover money stolen by their former rulers, this means questioning the legitimacy of the debt that kept those rulers in power. It is time for the people's of North Africa to break their chains of debts which have already helped suppress freedom and development for a generation.

US & UK Weapon Sales Aid Repression In Gulf

US & UK Weapons Sales To Gulf StatesFebruary 19th, 2011 There is not much to say about this. The regime in Bahrain is murdering its citizens with weapons from the USA and the UK. The British are blocking sales, what is the USA doing? We are sending our companies to a trade show to sell even more weapons to these countries so they can repress their populations. Business as usual. No wonder the people of those countries hate the USA.

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From Antiwar.com
The Arsenal Against Democracy: US Arms Fuel Bahraini Crackdown US Made Tanks Roll in Streets of Bahrain

by Jason Ditz, February 18, 2011 A tiny nation with no real security threats, one would have likely been puzzled up until this week at the massive military spending of Bahrain, and its stockpiling of US-made weapons. The crackdowns of the past few days make it clear: these arms were meant to target the public, not some foreign enemy. Over the years the US has sold Bahrain an enormous collection of weapons, including the F5 Freedom Fighter warplanes that are in the skies now, literally fighting freedom. The tanks that roll through the streets of Manama are M60A3 tanks, made in Detroit in the 1990s, with an historical market out front lauding the plant as the Arsenal of Democracy. The arsenal, it seems, turned on democracy at some point. Indeed much as the violent crackdowns in Egypt did during their uprising, much of the brutality in Bahrain is also clearly marked "made in America," where the Obama Administration, determined to see its status as world's largest weapons maker, has only grown the sales to brutal regimes. And really, it should have been obvious from the start. Why would Bahrain, an island nation, need scores of heavily armored tanks, if not to turn them on the public? Is not the privilege of being an island nation that you don't have to worry about heavy armor? Who exactly did American arms dealers believe these tanks would target, and if they knew all along they would be used to crush dissent, how can Congress not be planning massive investigations?

http://news.antiwar.com/2011/02/18/the-arsenal-against-democracy-us-arms...

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From UPI Security Industry

Gulf expo could boost Mideast arms sales Published: Feb. 18, 2011 at 11:57 AM ABU DHABI, United Arab Emirates, Feb. 18 (UPI) — The Middle East's premier arms exhibition opens Sunday in Abu Dhabi amid forecasts that the region's military spending is set to grow by 14 percent over five years. The biannual International Defense Exhibition and Conference, known as IDEX, is also being held Sunday-Thursday as oil prices have once more risen through the $100 level, driven in part by the regional pro-democracy turmoil that has reached the Arab producers of the Persian Gulf. Escalating tensions between Iran on the one hand and the United States and Israel on the other have led to a major drive by the Arab states in the gulf, particularly Saudi Arabia and the United Arab Emirates, to acquire more advanced and powerful weapons systems. High oil prices provide the gulf states with vast amounts of petrodollars to fund ambitious military procurement programs. Recent analyses predict that the gulf Arab monarchies will spend $122 billion on advanced combat jets, integrated missile defense systems, main battle tanks, attack helicopters and warships over the next decade or two. The combination of the rising oil prices — the current level is around $103 per barrel, the highest mark since September 2008 — and growing concerns in the gulf that they, too, will be infected by the political turmoil sweeping the region is a heady mix. Whether, as some industry analysts suggest, this will trigger further arms purchases isn't clear. But with strategic arms procurement seemingly already in hand, any fresh spending is likely to be directed at strengthening internal security forces to counter any threat against the regimes in place. However, this turmoil could be exploited by Tehran, as may be the case with the current unrest in Bahrain, the only Arab state in the six-member Gulf Cooperation Council alliance to have a Shiite majority. IDEX officials say 1,060 companies will exhibit at the show in Abu Dhabi, the emirates' capital. That's a record since the expo was launched in 1993 and more than 100 higher than IDEX 2009. This year's exhibitors include the Lockheed Martin Corp. of Maryland, the Boeing Co. of Chicago, France's Dassault Aviation, Finmeccanica of Italy which supplies warships to the gulf states, Germany's Rheinmetall AG, and Russia's state arms exporter Rosoboronexport, which notched sales of $10 billion in 2010. The arms show will run simultaneously with a naval defense exhibition, NAVDEX
2011, with 81 companies participating. Warships from the emirates' navy, Britain, Italy and France will be on display.

http://www.upi.com/Business_News/Security-Industry/2011/02/18/Gulf-expo-...

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From AOL News
Probe: US Arms Sales to Persian Gulf Lack Oversight
Sep 29, 2010 – 5:46 PM. Joseph Schuman Senior Correspondent

(Sept. 29) — The U.S. State and Defense departments have authorized billions of dollars in arms sales to countries in the Persian Gulf without documenting how transferring Patriot missile defense systems, F-16 fighter jets and the like advances the national interest, a government investigation found. The Government Accountability Office, the nonpartisan investigative arm of Congress, said a State Department licensing program for commercial arms sales and a Defense agency handling government-to-government sales failed to comply with controls aimed at verifying how such weapons deals further U.S. interests in the region. "State and DOD did not consistently document how arms transfers to gulf countries advanced U.S. foreign policy and national security goals for cases we selected," the GAO said. In The Huffington Post, Jonathan Tasini, a Democratic candidate for Congress in New York, wrote that under both the Bush and Obama administrations, the U.S. "is dispensing weapons like candy without even making sure that the sales of the weapons advances anything but the bottom lines of the weapons industry." The national-interest criteria for weapons sales to Saudi Arabia, Oman, Qatar, Kuwait, Bahrain and the United Arab Emirates — the six allied countries examined — are key because, as the GAO noted, "the Persian Gulf remains a volatile region for the United States as it continues to withdraw U.S. forces from Iraq and confronts Iran's attempts to develop nuclear weapons." Such concerns have also been widely cited as grounds for a spate of recent nuclear power assistance deals with Arab countries. The GAO investigation also found that the State Department database responsible for tracking weapons-sales authorizations has difficulty keeping track of all deals in the region and their monetary totals because it doesn't distinguish weapons sales to foreign countries with transfers of weapons systems to U.S. forces in the region. In contrast, the DOD's Foreign Military Sales agency was able to provide investigators with financial details on the $22 billion in arms transfers it authorized to the six gulf countries. The deals examined by the GAO took place between 2005 and 2009, were worth around $40 billion in total and dealt with systems that ranged in scale from the Patriot missile defense to Javelin and Hellfire anti-tank missiles and C-17 transport aircraft. The biggest recipients of U.S. arms in the region by far were Saudi Arabia and the UAE. Among the lapses, the State Department's Direct Commercial Sales agency documented its regional security review for only two out of 15 arms deals it condoned for the region and that were analyzed by the GAO. Another example: The DOD could not document its review of the effects of sharing highly secret military technology in the region for seven of the 13 authorizations examined. Still, "while documentation was incomplete, U.S. officials stated that arms transfers to gulf countries are an effective tool to advance U.S. foreign policy and national security goals," the GAO said. "For example, U.S. officials noted that gulf countries support the United States by providing basing rights for the U.S. military in the region and supporting operations in Afghanistan." The agencies also justified the arms deals with economic reasons. The GAO notes the arms deals "support the U.S. defense industrial base," and that with the exception of Bahrain and Oman, the countries in question have large oil or gas reserves. The GAO recommended that the State and Defense departments provide more details on arms transfer authorizations to Congress, adding clarity on both the financial values of the approved deals and their national security ramifications, "especially for sales of significant military equipment." It also called on State to improve its database, improving the capability to identify and separate licenses for arms headed to U.S. government entities and those going to foreign governments. While the DOD largely concurred with the GAO findings and said it will work to meet them, the State Department said it needed additional resources to makes the fixes. The Financial Times has tallied up "recent and pending" U.S. arms sales to gulf countries at more than $120 billion.

http://www.aolnews.com/2010/09/29/probe-us-arms-sales-to-persian-gulf-la...

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From The Independent
Britain has no business arming repressive regimes
Saturday, 19 February 2011

Asked yesterday whether he was embarrassed that British weapons had been sold to the Bahrain regime, which this week violently suppressed a peaceful protest, the Foreign Secretary, William Hague, sought safety in evasion, saying: "We have no evidence they have used that equipment." This sums up perfectly the moral blindness of Britain's official attitude towards arms exports. Early on Thursday, Bahraini security forces fired on unarmed protesters in the capital, Manama. The ferocious assault – with tear gas, rubber bullets and shotgun pellets – killed four people and injured hundreds. It is true we have no evidence that the arms they used in this particular operation were provided by Britain. But given that British firms were granted licences last year to export a plethora of crowd-control weapons to the Gulf state, that is a reasonable assumption. "We do not sell material to other countries that are likely to be used for internal repression," Mr Hague asserted yesterday. But given the nature of the Bahraini regime, what else would these weapons be used for? Bahrain is an autocracy. A Sunni minority represses a Shia majority. Political reform enacted a decade ago was a sham. The Coalition knew all this when it waved through these exports. British-manufactured military equipment and crowd-control hardware have also been sold to Libya, Algeria and Saudi Arabia since the Coalition took power at the last election. This Government apparently regards private profits at home as more valuable than human rights abroad. In fairness, the previous Labour government was just as bad. Labour came to power in 1997 promising an "ethical" foreign policy after years of cynical realpolitik from the Conservatives. But Tony Blair, too, ended up putting the interest of British arms manufacturers before the interest of repressed people across the Middle East. The former prime minister blocked an investigation by the Serious Fraud Office into BAE's dealings with the Saudi Arabian government in 2006. The excuse given by Mr Blair for this interference in the rule of law was that the investigation would have jeopardised UK-Saudi counter-terrorism co-operation. Yet one of the calculations made by Mr Blair was that the investigation would have damaged the British defence industry, with the Saudi regime threatening to withdraw its custom from Britain's largest arms manufacturer. And still the unethical policy continues. While Mr Hague mouths platitudes about encouraging greater freedom in the Middle East, scores of British companies are expected to converge on the Idex arms fair which opens in Abu Dhabi tomorrow. The pattern of business has been established for decades: the West buys oil from Gulf regimes; Gulf regimes use the funds to buy arms from Western manufacturers. This arrangement keeps the Gulf autocrats feeling secure and boosts employment and profits in Western nations. But the democratic stirrings in the Arab world in recent weeks have thrown a spotlight on this corrupt relationship. Britain needs to wake up to the reality that arming repressive autocrats abroad is, in the end, a bad business all round.

http://www.independent.co.uk/opinion/leading-articles/leading-article-br...

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