Food, Disposable Income, and Rising Political Violence

02.13.13
Tim McKulka
World News /13 Feb 2013
02.13.13

Food, Disposable Income, and Rising Political Violence

Much of the focus of rising political violence in the world today has been linked to the process of political change, particularly in the Middle East and North Africa. There is ample reason to establish such a link, and it remains highly relevant, however the preoccupation with political change in MENA over the past two years has shifted focus from other equally important precursors of political violence throughout the world. Of all the other factors contributing to political violence, and there are many – including natural resource acquisition, refugee flows, and boundary disputes – perhaps the most pressing and growing challenge is posed by simply getting enough food to eat on a daily basis.

In 2009 statistics were compiled by the U.S. Department of Agriculture showing what percentage of disposable income the average person spends on food around the world. As noted in the following charts, as little as 4% was spent in Malaysia and as much as 46% was spent in Pakistan – that’s 46% of disposable income, just to eat. By contrast, the average person in the U.S. spends just 7% of disposable income for food. In the BRIC countries the average person spends between 25% and 35% of his/her disposable income to eat. Given the rise in the cost of food since then, the problem has only gotten worse in the past 4 years.

Not surprisingly, the most highly developed countries come out on top in terms of food affordability, while the very poorest countries in Africa (i.e. where the people can least afford food) are the least affordable, according to the EIU.

The countries with the worst overall score for food affordability, availability, quality and safety are many of the same countries which either currently have, or have had, some of the worst civil conflicts in recent history. On this list are Angola, the DRC (ranked the worst of all), Mali, Sierra Leone, Sudan and Yemen.

Of course, all resources are more generally limited in the poorest countries, and in some countries with the worst record on food affordability and availability, there tends to be a higher likelihood that political violence will occur. But even in countries with ‘moderate’ overall scores, significant political violence is present, such as in Algeria, Ivory Coast, Kenya, Myanmar, Pakistan and Syria. Very few countries rated ‘good’ by the EIU are currently experiencing, or have in recent history experienced, significant political violence, with the exception of Egypt (which is right on the cusp of being rated ‘moderate’) and Mexico. In the ‘best environment’ category, only Israel is on the list.

(Click to enlarge)

(Click to enlarge)

As noted above, food price-inspired riots are common in many parts of the world and correspond in frequency and severity with peaks in the cost of food, with particular sensitivity once food costs reach approximately 200% of the FAO Food Price Index. As of January 2013, world food costs have risen more than 230% since 2000, based on that Index, and continue to rise. As such, it is reasonable to assume that food cost-inspired riots will recur with some frequency in the near term – particularly given the ongoing stresses in the global economy and pace of political change in MENA.

In Pakistan (or Indonesia or Mali), where poor people spend such a disproportionate amount of their disposable income on food, they are not out in the streets demanding change – because they know that their politicians are powerless to do anything about it. In failed, failing, or weak states, with an absence of meaningful regulatory and/or enforcement power, and with limited financial resources, governments are powerless to do anything about it. This is the most alarming thing about this phenomenon – in spite of the widespread pain and dislocation that it causes, only the markets ultimately control the price.

In a report released by Rabobank in September last year, the FAO projects a 15% rise in the Food Price Index by June. Rabobank expects prices of grains and oil seeds to remain high for most of the rest of this year. Particularly in countries with limited indigenous food growing ability, high population growth rates, and weak governments, the near term future appears highly risky for enhanced or renewed political violence. Going forward, expect food price-inspired riots to become more widespread, with increasing impacts on the trade and investment climate in affected countries.

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