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.]

Submitted by Terry Townsend on Sun, 02/20/2011 - 17:21


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.