Thursday, September 2, 2010

Economics underpins ALL conflict---Food Inflation causes rioting--is this just the beginning?

    The subject of the article below is something we discussed in class today.  Increasing food prices, while a nuisance, are easily absorbed by rich countries but disproportionately effect poor people in poor countries in a negative way.  It emphasizes the point of my lecture:  If you look at the history of conflict/revolution/war and strip away all the rhetoric, you will find an economic problem as the root cause.  In this case, it is rising wheat prices.  Wheat is a vital input into making many basic food staples.  While rising food prices may not be an ultimate reason for over-throwing a government, it may certainly be the catalyst.
Seven die in Mozambique food rioting
""The first food riots since the 2007-08 crisis have left seven people dead and at least 280 injured in Maputo, the Mozambican government said on Thursday. The unrest in the country’s capital followed the government’s decision to raise bread prices by 30 per cent.  The riots have prompted concerns that food protests could spread across poor African countries that rely heavily on agricultural commodities imports. Discontent about rising prices for staples has already emerged in countries from Egypt to South Africa.
Further violence in Maputo was possible, he added""
Another graph showing world meat prices relative to food prices world-wide:

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