High food prices seen leading to strikes, protests in Asia

This article belongs to the Global food crisis story arc.

channelnewsasia.com :

Asia's governments face strikes, protests and hoarding in response to the spiralling cost of food and other essentials that threatens to damage them at the polls, observers say. Asia's political leaders are on guard, wary of the potential for social unrest as people across the region struggle to cope with steeper prices for staple goods - particularly rice. "There will be unrest and the poorer countries will experience that much more than rich countries like Malaysia and Singapore," said Ooi Kee Beng, a fellow at the Institute of Southeast Asian Studies in Singapore.

Poverty-stricken Bangladesh and the Philippines have been particularly hard hit by higher food prices. Bangladeshis and poor Indonesians are estimated to spend close to 70% or more of their income on food. In the Philippines, one of the world's biggest importers of rice, the government deployed troops last week to deliver grain to poor areas of the capital Manila amid worries about shortages.

In China, inflation is of particular concern because it threatens to lead to social unrest and fuel anger at the government, as it did ahead of 1989 democracy protests that the military crushed. The price of China's staple meat, pork, has risen by more than 60% year-on-year. Rising prices have already emerged as a key issue in Asian elections. Malaysia's ruling coalition in elections last month ceded five states and a third of parliamentary seats to the opposition, which campaigned heavily on high inflation.

- This is an important and disturbing development. With the ongoing Asian rice crisis threatening to spill over into chaos, governments are hard pressed to tell their citizens to switch to substitutes as potential substitutes are also rising in price. If everything is rising in price, what can you switch to?

Meanwhile, news updates from around the world are pouring in regarding the rising tide of food inflation, in fast-and-furious style :

a. Hong Kong residents stock up on rice in panic-buying

Hong Kong residents have been flocking to supermarkets to stock up on rice in sporadic panic-buying. The move comes as wholesale prices of Thai rice surge, along with other staple food. One wholesaler said prices in Hong Kong might go up by 30% in the next two months. Shoppers have been clearing supermarket shelves of rice as they worry about upcoming price hikes.

b. No simple solutions to food price hikes

In theory, importing food from many sources sounds like a good way to keep rising prices in check. But reality is rarely so simple. With food prices going up around the world, economists point out - diversification will not be enough to avoid inflation in Singapore, which imports about 90% of its edibles.

c. Bangladesh workers riot over soaring food prices

About 10,000 garment workers rioted on Saturday [12 Apr 2008] close to the Bangladeshi capital Dhaka, smashing cars and buses and vandalising factories in anger at high food prices and low wages. Police sub-inspector Shafiqul Islam said, "They became unruly demanding higher wages, saying their current wages don't even meet basic food needs." At least five people have died in similar protests over high food and fuel prices in Haiti, while disturbances have rocked Egypt, Cameroon, Ethiopia, the Philippines, Indonesia and other countries in the past month.

d. Egypt's rising food prices swell bread lines, deficit

Bread is just about the only affordable food these days in Egypt, where rising commodity and energy prices have sent unsubsidized food prices up 20% or more in the past year. The rising cost of subsidies is damaging the government's efforts to reduce its budget deficit. Egyptian inflation accelerated to 12.1% in February, the fastest pace in 11 months. 7 people have died since the beginning of the year in brawls in bread lines. Record high grain prices have led to strikes in Argentina, riots in Cameroon, Burkina Faso, Morocco and the Ivory Coast.

- The Egypt case is particularly poignant, as the Egyptians were the pioneers of bread-making. 3000 years after inventing the techniques to make bread from wheat, their citizens are now queuing up for government subsidized bread and their people are fighting and dying in these queues.