http://www.atimes.com/atimes/Global_Economy/KB26Dj02.html

Feb 26, 2009 


A planet at the brink? 
By Michael T Klare 


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. 

Michael T Klare is a professor of peace and world security studies at Hampshire 
College and the author, most recently, of Rising Powers, Shrinking Planet: The 
New Geopolitics of Energy (Metropolitan Books). 

(Copyright 2009 Michael T Klare)

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