Growing Unrest in Arabia and Maghreb: Reappearance of the Black Swan?
by Ramtanu Maitra on 03 Mar 2011 4 Comments

According to Lebanese philosopher Nassim Taleh, most great social and political events and discoveries cannot be predicted. Like the black swan, they are not expected and their sighting is an extremely rare event that has a great impact. As Taleh explains: “First, [the event] is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.” 


In recent times, the events of September 11, 2001 - widely known as 9/11- could be said to be akin to the sighting of a black swan. The events of 9/11 match all three requirements cited by philosopher Taleh. (Of course, whoever planned those shocking events, if they are still alive, may strongly reject this assertion).


Maghreb and Arabia


The events now unfolding in the Maghreb nations and in the Arabian Peninsula have also been described by some as the sighting of that rare bird. But is that a valid assessment? This author thinks not. There was no reason to believe that such uprisings would not take place sometime (even though one could not know the week, month or year it would finally break open). At the same time, there was evidence that a series of developments worldwide were, in fact, setting the stage for such uprisings to take place.


These developments included a global financial collapse and a flood of trillions of dollars of bail-out money, which sparked inflation all around; a steep rise in food prices affecting millions of families who can no longer feed their children; the absence of any nation, or group of nations willing to address the issue effectively; and a total disregard of the poor and underprivileged, and basic realities, by a section of people who are making money. These were among the causes behind the uprisings we find breaking out in some parts of this world. One may ask why the uprisings are taking place in specific countries; but one must note that when an extreme level of stress is applied on any object, the weakest links collapse first.


The first uprising appeared in a relatively small form in Tunisia, a country situated in North Africa and part of the Maghreb, when its ruler Zine al-Abidine Ben Ali was forced to flee the country on Jan.15, following a few weeks of uprisings. Ben Ali, who took over in November 1987 after announcing that a team of doctors had declared the then-President Habib Bourguiba mentally unfit to govern and that, as the recently appointed prime minister, he was assuming power.


Degradation of Youth


During the 24 years that Ben Ali was in power undisturbed, he and his family robbed Tunisia blind and implemented mafia-style laws to stay in power. In the meantime, unemployment among university graduates in Tunisia reached 43 percent, according to some estimates. Tourism became the country’s chief source of foreign currency earning. A vast majority of educated youth were engaged in squandering their creativity and productivity catering to the needs of European tourists who thronged Tunisia, buying knick-knacks and services cheaply with their powerful currency. The other 43 percent of the youth, who could not find employment, were trying to get into this demeaning service sector function. But to Ben Ali and his gang of mafia robbers, money was all that mattered.


“Unemployment rates for the illiterate in most Arab countries are the lowest. The rates rise among high school and university graduates, to reach 10 times the rate among illiterates in Egypt, and five times the rate in Morocco,” notes an Arab Labor Organization (ALO) report. “That’s what created the anger in Tunisia,” Lahcan Achy, senior economist at Carnegie Middle East argues. 


Converting this nation to a tourists’ haven and not allowing the youth to make Tunisia a nation that would make them proud was itself a prescription for disaster. But, that was not all. Tunisia is a food-short nation. It imports cereals every year. Last year, it imported about 2 million tons of wheat and barley; this year, it could be even more, but only if Tunisia can afford to buy the amount at the current speculative prices. It is likely that there will not be enough surplus wheat and barley around the world this year considering the shortfall in production expected in Russia, China and some other countries. The single most devastating criminal act of the money-greedy Ben Ali, and his cohorts, was to refuse to utilize Tunisian youth to plan and execute a program that could ensure long-term food security to his people.


What triggered the uprising in Tunisia was reproduced in Egypt, Morocco, Algeria, Libya and elsewhere, where the protests and demonstrations continue to date. Because of societal differences and variations in the characteristics of each dictator, the cross-section of people joining the protests was different in each country. For instance, in Egypt, millions of youth seeking democracy and freedom of speech were joined in Cairo by blue-collar workers leaving their workplaces in large numbers. With a very powerful coalition thus formed, the religious groups, who have their differences with the youth seeking freedom and democracy, were left no choice but to become a part of the protest. 


In Bahrain, the sectarian differences that kept the animosities between the majority Shias and the ruling Sunnis bottled up for decades, grabbed the spotlight. But that was always there. In fact, it was issues such as the food shortages and the financial collapse - in addition to the success attained in the Maghreb through mass demonstration and protests - that put the people on the streets.


The Financial Collapse and the Food Crisis


The global financial collapse that began in 2008 was denied by the powers-that-be. As a result, after seeing one bubble burst, the gnomes of Wall Street and the City of London, riding on the back of the perfectly accommodating Washington and London, have begun to create new market bubbles and give the impression that things are getting better. This bubble was facilitated by the release of at least two trillion dollars (between the United States and Brussels) to bail out the institutions that looted people’s money and were the principle culprits in bringing the financial system to its knees. This bail-out money was then repackaged and invested in the bourses around the world to generate profit. That not only created inflation all over the world, but it also drove up the price of food and real estate.


Back in 2008, three economists - Philip C. Abbott, Christopher Hurt, and Wallace E. Tyner - from Purdue University, one of the preeminent agriculture institutions of the United States, presented data and charts that speak for themselves of the urgent need for international collaboration to reverse what will otherwise result in mass famine. This evidence appeared in the appendix to their review of 25 recommendations from other agencies ranging from The Economist of London to the US Congressional Research Service.


The Purdue Report points out that leaving aside the critical questions of food price hyperinflation from speculation, cartel looting practices, and so on, there is absolute and severe underproduction of food. Indicative is today’s ultra-low level of grain carryover (year to year) stocks, taken as a ratio of the volume of grain used in a year. Wheat carryover, for example, is the lowest it’s ever been since 1960, when the data series began. Moreover, the ratio of stocks-to-use understates the shortages, because the “use” side of grains, oils, and oilseed meals is itself way below what it would be if all nations and peoples had sufficient food. 


The report states: “There is a point at which ending stocks are so small that they reach minimum or ‘pipeline’ levels. This means total stocks will be used up at the time the new crop is ready to harvest. The line between surplus stocks and shortages can be very thin... It has become narrower in the last decade as governments got out of the storage business and private end-users developed the philosophy of just-in-time delivery, and thus held minimum stocks in inventory.


“The transition from surplus stocks or ‘too much’, in WTO market terms, to ‘too little’ came quickly for most agricultural commodities from 2006 to 2008. Once that thin line was crossed, prices were ‘unbolted’ as everyone asked what the value of food should be in a world of ‘too little.’ Ending stocks for many commodities are near record lows. . . ”


It Could Happen in India, Too


In India, for instance, decades of neglect by World Bank-trained economists such as Prime Minister Manmohan Singh and Planning Commission Deputy Chairman Montek Singh Ahluwalia of the agricultural sector has had a serious effect. In particular, the failure to provide the required inputs, such as increasing the irrigated area through improved water management, providing enhanced power, and boosting the overall productivity of the land cultivated, has not only perpetuated poverty for hundreds of millions of Indians in the agriculture sector, but also caused productivity in India’s agricultural sector to stagnate. The rising price of food in India, now in its third year, has created a volatile mix that is somewhat similar to what led to the uprisings in the Maghreb and Arabia.


Can such uprisings happen in India? According to a senior Indian analyst, “We in India cannot afford to be over-confident that it can’t affect us. It can. If it does, due to our insensitivity and self-complacency, it will not have a pan-Indian impact. It will be an impact felt in some pockets where there is already people’s anger, as in the North-East or Jammu & Kashmir or in the tribal areas of central India. We have to be alert. Being alert does not mean more security forces. It means actions to monitor the grievances and anger of the people and timely steps to address them.” 


The ingredients to trigger an uprising exist in India. It could be triggered by one factor, with other factors coming into play to make it more powerful. India’s hundreds of millions of poor, who spend 80-90 percent of their income to buy food, and who continue to face a steep rise in food prices month after month, may not stay at home under such conditions.


This also means that what we are observing at this point in time in the Maghreb and Arabia cannot be called the sighting of a black swan, because what is happening is not an “outlier” or, in other words, it does not lie outside the realm of regular expectation. What is happening was very much expected to happen under prevailing circumstances.



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