The global economic meltdown has already caused bank failures, bankruptcies,
plant closings, and foreclosures and will, in the coming year, leave many tens
of millions unemployed across the planet. But another perilous consequence of
the crash of 2008 has only recently made its appearance: increased civil unrest
and ethnic strife. Someday, perhaps, war may follow.
As people lose confidence in the ability of markets and governments to solve
the global crisis, they are likely to erupt into violent protests or to assault
others they deem responsible for their plight, including government officials,
plant managers,
landlords, immigrants, and ethnic minorities. (The list could, in the future,
prove long and unnerving.) If the present economic disaster turns into what
President Barack Obama has referred to as a "lost decade", the result could be
a global landscape filled with economically-fueled upheavals.
Indeed, if you want to be grimly impressed, hang a world map on your wall and
start inserting red pins where violent episodes have already occurred. Athens
(Greece), Longnan (China), Port-au-Prince (Haiti), Riga (Latvia), Santa Cruz
(Bolivia), Sofia (Bulgaria), Vilnius (Lithuania), and Vladivostok (Russia)
would be a start. Many other cities from Reykjavik, Paris, Rome, and Zaragoza
to Moscow and Dublin have witnessed huge protests over rising unemployment and
falling wages that remained orderly thanks in part to the presence of vast
numbers of riot police. If you inserted orange pins at these locations - none
as yet in the United States - your map would already look aflame with activity.
And if you're a gambling man or woman, it's a safe bet that this map will soon
be far better populated with red and orange pins.
For the most part, such upheavals, even when violent, are likely to remain
localized in nature, and disorganized enough that government forces will be
able to bring them under control within days or weeks, even if - as with Athens
for six days last December - urban paralysis sets in due to rioting, tear gas,
and police cordons. That, at least, has been the case so far. It is entirely
possible, however, that, as the economic crisis worsens, some of these
incidents will metastasize into far more intense and long-lasting events: armed
rebellions, military takeovers, civil conflicts, even economically fueled wars
between states.
Every outbreak of violence has its own distinctive origins and characteristics.
All, however, are driven by a similar combination of anxiety about the future
and lack of confidence in the ability of established institutions to deal with
the problems at hand. And just as the economic crisis has proven global in ways
not seen before, so local incidents - especially given the almost instantaneous
nature of modern communications - have a potential to spark others in far-off
places, linked only in a virtual sense.
A pandemic of economically driven violence
The riots that erupted in the spring of 2008 in response to rising food prices
suggested the speed with which economically-related violence can spread. It is
unlikely that Western news sources captured all such incidents, but among those
recorded in the New York Times and the Wall Street Journal were riots in
Cameroon, Egypt, Ethiopia, Haiti, India, Indonesia, Ivory Coast, and Senegal.
In Haiti, for example, thousands of protesters stormed the presidential palace
in Port-au-Prince and demanded food handouts, only to be repelled by government
troops and United Nation (UN) peacekeepers. Other countries, including Pakistan
and Thailand, quickly sought to deter such assaults by deploying troops at
farms and warehouses throughout the country.
The riots only abated at summer's end when falling energy costs brought food
prices crashing down as well. (The cost of food is now closely tied to the
price of oil and natural gas because petrochemicals are so widely and heavily
used in the cultivation of grains.) Ominously, however, this is sure to prove
but a temporary respite, given the epic droughts now gripping breadbasket
regions of the United States, Argentina, Australia, China, the Middle East, and
Africa. Look for the prices of wheat, soybeans, and possibly rice to rise in
the coming months - just when billions of people in the developing world are
sure to see their already marginal incomes plunging due to the global economic
collapse.
Food riots were but one form of economic violence that made its bloody
appearance in 2008. As economic conditions worsened, protests against rising
unemployment, government ineptitude, and the unaddressed needs of the poor
erupted as well. In India, for example, violent protests threatened stability
in many key areas. Although usually described as ethnic, religious, or caste
disputes, these outbursts were typically driven by economic anxiety and a
pervasive feeling that someone else's group was faring better than yours - and
at your expense.
In April, for example, six days of intense rioting in Indian-controlled Kashmir
were largely blamed on religious animosity between the majority Muslim
population and the Hindu-dominated Indian government; equally important,
however, was a deep resentment over what many Kashmiri Muslims experienced as
discrimination in jobs, housing, and land use. Then, in May, thousands of
nomadic shepherds known as Gujjars shut down roads and trains leading to the
city of Agra, home of the Taj Mahal, in a drive to be awarded special economic
rights; more than 30 people were killed when the police fired into crowds. In
October, economically-related violence erupted in Assam in the country's far
northeast, where impoverished locals are resisting an influx of even poorer,
mostly illegal immigrants from nearby Bangladesh.
Economically driven clashes also erupted across much of eastern China in 2008.
Such events, labeled "mass incidents" by Chinese authorities, usually involve
protests by workers over sudden plant shutdowns, lost pay, or illegal land
seizures. More often than not, protestors demanded compensation from company
managers or government authorities, only to be greeted by club-wielding police.
Needless to say, the leaders of China's Communist Party have been reluctant to
acknowledge such incidents. This January, however, the magazine Liaowang
(Outlook Weekly) reported that layoffs and wage disputes had triggered a sharp
increase in such "mass incidents," particularly along the country's eastern
seaboard, where much of its manufacturing capacity is located.
By December, the epicenter of such sporadic incidents of violence had moved
from the developing world to Western Europe and the former Soviet Union. Here,
the protests have largely been driven by fears of prolonged unemployment,
disgust at government malfeasance and ineptitude, and a sense that "the
system," however defined, is incapable of satisfying the future aspirations of
large groups of citizens.
One of the earliest of this new wave of upheavals occurred in Athens, Greece,
on December 6, 2008, after police shot and killed a 15-year-old schoolboy
during an altercation in a crowded downtown neighborhood. As news of the
killing spread throughout the city, hundreds of students and young people
surged into the city center and engaged in pitched battles with riot police,
throwing stones and firebombs.
Although government officials later apologized for the killing and charged the
police officer involved with manslaughter, riots broke out repeatedly in the
following days in Athens and other Greek cities. Angry youths attacked the
police - widely viewed as agents of the establishment - as well as luxury shops
and hotels, some of which were set on fire. By one estimate, the six days of
riots caused $1.3 billion in damage to businesses at the height of the
Christmas shopping season.
Russia also experienced a spate of violent protests in December, triggered by
the imposition of high tariffs on imported automobiles. Instituted by Prime
Minister Vladimir Putin to protect an endangered domestic auto industry (whose
sales were expected to shrink by up to 50% in 2009), the tariffs were a blow to
merchants in the Far Eastern port of Vladivostok who benefited from a
nationwide commerce in used Japanese vehicles. When local police refused to
crack down on anti-tariff protests, the authorities were evidently worried
enough to fly in units of special forces from Moscow, 3,700 miles away.
In January, incidents of this sort seemed to be spreading through Eastern
Europe. Between January 13th and 16th, anti-government protests involving
violent clashes with the police erupted in the Latvian capital of Riga, the
Bulgarian capital of Sofia, and the Lithuanian capital of Vilnius. It is
already essentially impossible to keep track of all such episodes, suggesting
that we are on the verge of a global pandemic of economically driven violence.
A perfect recipe for instability
While most such incidents are triggered by an immediate event - a tariff, the
closure of local factory, the announcement of government austerity measures -
there are systemic factors at work as well. While economists now agree that we
are in the midst of a recession deeper than any since the Great Depression of
the 1930s, they generally assume that this downturn - like all others since
World War II - will be followed in a year, or two, or three, by the beginning
of a typical recovery.
There are good reasons to suspect that this might not be the case - that poorer
countries (along with many people in the richer countries) will have to wait
far longer for such a recovery, or may see none at all. Even in the United
States, 54% of Americans now believe that "the worst" is "yet to come" and only
7% that the economy has "turned the corner", according to a recent
Ipsos/McClatchy poll. A quarter of the population also think the crisis will
last more than four years. Whether in the US, Russia, China, or Bangladesh, it
is this underlying anxiety - this suspicion that things are far worse than just
about anyone is saying - which is helping to fuel the global epidemic of
violence.
The World Bank's most recent status report, Global Economic Prospects 2009,
fulfills those anxieties in two ways. It refuses to state the worst, even while
managing to hint, in terms too clear to be ignored, at the prospect of a
long-term, or even permanent, decline in economic conditions for many in the
world. Nominally upbeat - as are so many media pundits - regarding the
likelihood of an economic recovery in the not-too-distant future, the report
remains full of warnings about the potential for lasting damage in the
developing world if things don't go exactly right.
Two worries, in particular, dominate Global Economic Prospects 2009: that banks
and corporations in the wealthier countries will cease making investments in
the developing world, choking off whatever growth possibilities remain; and
that food costs will rise uncomfortably, while the use of farmlands for
increased biofuels production will result in diminished food availability to
hundreds of millions.
Despite its Pollyanna-ish passages on an economic rebound, the report does not
mince words when discussing what the almost certain coming decline in First
World investment in Third World countries would mean:
Should credit
markets fail to respond to the robust policy interventions taken so far, the
consequences for developing countries could be very serious. Such a scenario
would be characterized by ... substantial disruption and turmoil, including
bank failures and currency crises, in a wide range of developing countries.
Sharply negative growth in a number of developing countries and all of the
attendant repercussions, including increased poverty and unemployment, would be
inevitable.
In the autumn of 2008, when the report was written,
this was considered a "worst-case scenario." Since then, the situation has
obviously worsened radically, with financial analysts reporting a virtual
freeze in worldwide investment. Equally troubling, newly industrialized
countries that rely on exporting manufactured goods to richer countries for
much of their national income have reported stomach-wrenching plunges in sales,
producing massive plant closings and layoffs.
The World Bank's 2008 survey also contains troubling data about the future
availability of food. Although insisting that the planet is capable of
producing enough foodstuffs to meet the needs of a growing world population,
its analysts were far less confident that sufficient food would be available at
prices people could afford, especially once hydrocarbon prices begin to rise
again. With ever more farmland being set aside for biofuels production and
efforts to increase crop yields through the use of "miracle seeds" losing
steam, the Bank's analysts balanced their generally hopeful outlook with a
caveat: "If biofuels-related demand for crops is much stronger or productivity
performance disappoints, future food supplies may be much more expensive than
in the past."
Combine these two World Bank findings - zero economic growth in the developing
world and rising food prices - and you have a perfect recipe for unrelenting
civil unrest and violence. The eruptions seen in 2008 and early 2009 will then
be mere harbingers of a grim future in which, in a given week, any number of
cities reel from riots and civil disturbances which could spread like multiple
brushfires in a drought.
Mapping a world at the brink
Survey the present world, and it's all too easy to spot a plethora of potential
sites for such multiple eruptions - or far worse. Take China. So far, the
authorities have managed to control individual "mass incidents", preventing
them from coalescing into something larger. But in a country with a more than
2,000 history of vast millenarian uprisings, the risk of such escalation has to
be on the minds of every Chinese leader.
On February 2, a top Chinese Party official, Chen Xiwen, announced that, in the
last few months of 2008 alone, a staggering 20 million migrant workers, who
left rural areas for the country's booming cities in recent years, had lost
their jobs. Worse yet, they had little prospect of regaining them in 2009. If
many of these workers return to the countryside, they may find nothing there
either, not even land to work.
Under such circumstances, and with further millions likely to be shut out of
coastal factories in the coming year, the prospect of mass unrest is high. No
wonder the government announced a $585 billion stimulus plan aimed at
generating rural employment and, at the same time, called on security forces to
exercise discipline and restraint when dealing with protesters. Many analysts
now believe that, as exports continue to dry up, rising unemployment could lead
to nationwide strikes and protests that might overwhelm ordinary police
capabilities and require full-scale intervention by the military (as occurred
in Beijing during the Tiananmen Square demonstrations of 1989).
Or take many of the Third World petro-states that experienced heady boosts in
income when oil prices were high, allowing governments to buy off dissident
groups or finance powerful internal security forces. With oil prices plunging
from $147 per barrel of crude oil to less than $40 dollars, such countries,
from Angola to shaky Iraq, now face severe instability.
Nigeria is a typical case in point: When oil prices were high, the central
government in Abuja raked in billions every year, enough to enrich elites in
key parts of the country and subsidize a large military establishment; now that
prices are low, the government will have a hard time satisfying all these
previously well-fed competing obligations, which means the risk of internal
disequilibrium will escalate. An insurgency in the oil-producing Niger Delta
region, fueled by popular discontent with the failure of oil wealth to trickle
down from the capital, is already gaining momentum and is likely to grow
stronger as government revenues shrivel; other regions, equally disadvantaged
by national revenue-sharing policies, will be open to disruptions of all sorts,
including heightened levels of internecine warfare.
Bolivia is another energy producer that seems poised at the brink of an
escalation in economic violence. One of the poorest countries in the Western
Hemisphere, it harbors substantial oil and natural gas reserves in its eastern,
lowland regions. A majority of the population - many of Indian descent -
supports President Evo Morales, who seeks to exercise strong state control over
the reserves and use the proceeds to uplift the nation's poor. But a majority
of those in the eastern part of the country, largely controlled by a
European-descended elite, resent central government interference and seek to
control the reserves themselves. Their efforts to achieve greater autonomy have
led to repeated clashes with government troops and, in deteriorating times,
could set the stage for a full-scale civil war.
Given a global situation in which one startling, often unexpected development
follows another, prediction is perilous. At a popular level, however, the basic
picture is clear enough: continued economic decline combined with a pervasive
sense that existing systems and institutions are incapable of setting things
right is already producing a potentially lethal brew of anxiety, fear, and
rage. Popular explosions of one sort or another are inevitable.
Some sense of this new reality appears to have percolated up to the highest
reaches of the US intelligence community. In testimony before the Senate Select
Committee on Intelligence on February 12th, Admiral Dennis C Blair, the new
Director of National Intelligence, declared, "The primary near-term security
concern of the United States is the global economic crisis and its geopolitical
implications ... Statistical modeling shows that economic crises increase the
risk of regime-threatening instability if they persist over a one to two year
period" - certain to be the case in the present situation.
Blair did not specify which countries he had in mind when he spoke of
"regime-threatening instability" - a new term in the American intelligence
lexicon, at least when associated with economic crises - but it is clear from
his testimony that US officials are closely watching dozens of shaky nations in
Africa, the Middle East, Latin America, and Central Asia.
Now go back to that map on your wall with all those red and orange pins in it
and proceed to color in appropriate countries in various shades of red and
orange to indicate recent striking declines in gross national product and rises
in unemployment rates. Without 16 intelligence agencies under you, you'll still
have a pretty good idea of the places that Blair and his associates are eyeing
in terms of instability as the future darkens on a planet at the brink.
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