Prices and Demographics

I have always been convinced that the best way to look ahead to the future is not found in high-minded philosophizing or tea-leave reading – the fact is numbers usually don’t lie. So I found this article predicting greater global turmoil next year (2013) pretty convincing:

The drought has ruined key crops. The corn harvest is expected to drop to the lowest level since 1995. In just July, prices for corn and wheat jumped about 25% each, prices for soybeans about 17%.

These higher grain prices will flow through to higher food prices. For consumers in developed countries, higher food prices are a burden — but in almost all cases, a manageable burden…..

But step outside the developed world, and the price of food suddenly becomes the single most important fact of human economic life. In poor countries, people typically spend half their incomes on food — and by “food,” they mean first and foremost bread.

When grain prices spiked in 2007-2008, bread riotsshook 30 countries across the developing world, from Haiti to Bangladesh, according to the Financial Times.   A drought in Russia in 2010 forced suspension of Russian grain exports that year and set in motion the so-called Arab spring.

Since the days of Gamal Abdel Nasser, the Egyptian government has provided subsidized bread to the population. A disk of round flat bread costs about a penny. In the later 2000s, however, the Mubarak government found it could not keep pace with surging grain costs.

So don’t listen to election year (or post-election) rhetoric that claims that this or that global issue is caused by “sending the wrong message” or “leading from behind.” Food is really, really important to people – when there’s all of a sudden less of it, they’re going to react. If their politicians aren’t ready to deal with it, they’re going to react violently.

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About thinklikeafox

I'm a Naval Officer living in Southern California. I hope to be attending law school in the next year or two, and I started writing this blog out of a desire to improve my writing and critical thinking skills after a couple years outside of academia.
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