Over the past several days the media has covered massive protests in Yemen, Algeria, Egypt, Morocco, Lebanon, and Jordan. The situation in each country is unique, but one of the common issues people are protesting over is the rapidly rising cost of food, which takes up a much more significant portion of people’s household budgets in these countries than in the U.S.
- The rising cost of food is an issue to monitor because people need to eat in order to survive; a person can’t live without eating food for a sustained period of time like a person can live without listening to their iPod for a sustained period of time. As seen in many of the ongoing protests around the world, if people are having difficulty obtaining food they’ll put significant pressure on their government to do something about it.
Today I want to highlight a recent report from Nomura Global Economics and Strategy about which countries may be the most vulnerable if food prices continue to rise.
Nomura utilized three indicators to determine which countries might be the most vulnerable to rising food prices.
- GDP Per Capita: gauges how much money the typical person has to spend on food
- Share of Total Household Consumption Spent on Food: gauges how much of what households spend goes towards buying food. Rising food prices most adversely impact households that spend a significant portion their disposable money on food.
- Net Food Exports as a Percentage of GDP: gauges how much food a country is exporting to other countries. Higher the percentage the better since it means that there is potentially a surplus of food available for the domestic population if it is needed.
The following table are the top 25 countries most vulnerable to rising food prices according to Nomura (link to the table in case you are unable to see it on your screen):
Several countries on Nomura’s list currently have protests where people are demanding relief from rising food prices, including: Tunisia, Algeria, Egypt, Morocco, and Lebanon. Other countries on the list may see protests soon if food prices continue to rise.
Nomura’s ranking identifies what countries may be at most risk if food prices continue to rise. If/when the people living in these countries demand reform or for something to be done about food prices it will be up to the governments in these countries to respond effectively.
The Center for Systematic Peace (CSP) has an indicator which tracks the degree that each government can effectively respond to various demands and crises (i.e. high food prices). The measure is known as “state fragility”. This is how the CSP explains the useful of its state fragility measure:
“A country’s fragility is closely associated with its state capacity to manage conflict; make and implement public policy; and deliver essential services and its systemic resilience in maintaining system coherence, cohesion, and quality of life; responding effectively to challenges and crises, and continuing progressive development”.[1]
Unfortunately, the CSP only has state fragility data through 2009. Nevertheless, the data is recent enough for us to still get a good feel of how fragile the government of each country mentioned in Nomura’s rankings is. The next table ranks each state by how fragile it is (link to the table in case you are unable to see it on your screen)
- The "Fragility Explained" column translates the meaning of the fragility score. For instance, Pakistan’s government is highly fragile while China’s government is moderately fragile. Higher the fragility score the more fragile a country is vis-à-vis a country with a lower fragility score.
- Countries with the highest fragility scores may struggle the most to deal with the pressure and demands of unhappy people.
What stands out in the table above is that the Tunisian government was overwhelmed even though it was estimated to have only a relatively low level of fragility by the CSP. This does not bode well for other governments on this list with higher fragility scores than Tunisian’s old government if/when the rapidly rising cost of food becomes a factor that motivates people to protest.
Thirty countries experienced food protests and food riots in the 2007-2008 global food crisis. Some experts have recently expressed concern that a new crisis worse than 2007-2008 may arise from record food prices soon and may lead to the toppling of regimes that struggle to handle with the pressure to respond.
We should not be surprised by any instability caused from rising food prices or surprised by reports of famines because these events are consistent with what we should see in the birth pangs period.
- Mat 24:6 And ye shall hear of wars and rumours of wars: see that ye be not troubled: for all these things must come to pass, but the end is not yet.
- Mat 24:7 For nation shall rise against nation, and kingdom against kingdom: and there shall be famines, and pestilences, and earthquakes, in divers places.
- Mat 24:8 All these are the beginning of sorrows.
- Luk 21:9 But when ye shall hear of wars and commotions, be not terrified: for these things must first come to pass; but the end is not by and by.
Remember that God is in control of the entire situation. There is a reason these events and others are happening.
Reference
[1] Marshall, Monty and Benjamin R. Cole. State Fragility Index and Matrix 2009. Fairfax: Center for Systematic Peace and Center for Global Policy. August 28, 2010. http://www.systemicpeace.org/SFImatrix2009c.pdf Pg 7
