Tuesday, March 29, 2011

Bread and Oil

A couple items I read which are informative and interesting.

Vikash Yadav of Hobart and William Smith Colleges. writing at the International Realtions blog The Duck of Minerva describes The Rebels and Forign Supporters in Libya. After discussing disputes between the coverage of Libya by the Qatar based Al Jazeera news network he comments

My hunch is that bitterness over the Al Jazeera allegations is not the underlying reason for Qatar's aggressive posture so much as joint economic and (particularly petroleum) interests based in Doha which were formed through MOUs after the rapprochement in 2002. These economic and financial interest groups seek a more stable and palatable Libyan government. While Al Jazeera's coverage of the revolution in Egypt may have inspired youth in Tripoli to rebel, this could hardly have been the desire of the joint economic interests which had worked for years to rehabilitate Libya's international reputation. After Tripoli's brutal response to the February 17th movement, those interests may have simply decided (like many other external actors) to work to replace the current regime rather than attempting to sit through another decade of sanctions and diplomatic isolation. (Of course, that's all just a hunch and I would be interested to hear how experts on the region analyze the underlying sources of tension/cooperation between these two states.)

I suspect his hunch is a very good point. One has to deal with the government that is there not the government you want, which means sometimes holding ones nose and dealing with a Gaddafi. A genuine rebellion creates the possibility of a different government. It seems that one of the causes of the war is that Gaddafi crossed some invisible line between tolerance and unacceptable.

It is always assumed that oil has something to do with Middle Eastern conflicts, however Annia Ciezadlo in Foreign Affairs suggests a more basic commodity is involved - Bread.

Change is sweeping through the Middle East today, but one thing remains the same: the region once known as the Fertile Crescent is now the world's most dependent on imported grain. Of the top 20 wheat importers for 2010, almost half are Middle Eastern countries. The list reads like a playbook of toppled and teetering regimes: Egypt (1), Algeria (4), Iraq (7), Morocco (8), Yemen (13), Saudi Arabia (15), Libya (16), Tunisia (17).

For decades, many of these regimes relied on food subsidies to ensure stability -- a social contract so pervasive that the Tunisian scholar Larbi Sadiki described it as dimuqratiyyat al-khubz, or "democracy of bread." But over the past several years, grain prices reached record levels, and these appeasement policies lost their luster. In Tunisia, pro-democracy demonstrations began in late December 2010 with protesters brandishing baguettes. In just a few months, a wave of uprisings rippled across the region, toppling Tunisian President Zine el-Abidine Ben Ali and Egypt's longtime ruler, Hosni Mubarak.
snip Mubarak and Ben Ali are history, but it is worth taking a hard look at some of the other wheat importers on that list -- particularly Yemen, a corrupt, U.S.-backed dictatorship where one in three citizens suffers from acute hunger. Even if strong democratic institutions emerge from the current upheaval, the region's dependence on wheat from abroad will continue to create crises for years to come. The solutions are simple: the United States and the international banking community should encourage its Middle Eastern allies to develop their own agricultural sectors, where economic growth is far more effective at lifting people out of poverty than in other sectors. The United States should also stop sending agricultural surplus abroad as foreign aid, which depresses prices in the countries that receive it and drives farmers further into poverty (the Obama administration has taken steps toward ending this practice).

Perhaps the United States, and the Middle Eastern regimes it supports, can learn something from Mubarak's demise. It seems obvious that countries such as Egypt, Iraq, and Yemen cannot stop their bread subsidies overnight. But it seems equally obvious that propping up dictatorships with cheap bread is a shortsighted policy: in the near term, it helps keep global prices high, and in the long run it does not even guarantee stability.

While subsidies of anything are always tempting as a short term solution, in the long term they depend on items that are beyond the control of whoever is granting them. For the recipents they become expected if not a right, creating possible conflict between the proverbial irresistible force and an immovable object, except that real live people are caught in between. Subsidies also distort the economy ususally with undesiarble results, in this case marginalizing local food production making the coutries dependent on imports. Best to avoid subsidies to begin with and where they can’t be avoided remove them as fast as possible. If she is right the Middle East is in for major problems even if there were no other issues.

These are both worth your time to have a better understanding of the events we are seeing.


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