Archives for posts with tag: Egypt

here we can read an analysis of Portuguese Communist Party on the situation in Portugal (in Portuguese)

 Prediction: 2013 will be a year of serious global crisis. That crisis is predictable, and in fact has already begun. It will inescapably confront the next president of the United States. Yet this emerging crisis got not a mention at the Republican National Convention in Tampa. We’ll see if the Democrats do better.

The crisis originates in this summer’s extreme weather. Almost 80% of the continental United States experienced drought conditions. Russia and Australia experienced drought as well.

The drought has ruined key crops. The corn harvest is expected to drop to the lowest level since 1995. In just July, prices for corn and wheat jumped about 25% each, prices for soybeans about 17%.

These higher grain prices will flow through to higher food prices. For consumers in developed countries, higher food prices are a burden — but in almost all cases, a manageable burden.

Americans spend only about 10% of their after-tax incomes on food of all kinds, including restaurant meals and prepackaged foods. Surveys for Gallup find that the typical American family is spending one-third less on food today, adjusting for inflation, than in 1969.

But step outside the developed world, and the price of food suddenly becomes the single most important fact of human economic life. In poor countries, people typically spend half their incomes on food — and by “food,” they mean first and foremost bread. When grain prices spiked in 2007-2008, bread riotsshook 30 countries across the developing world, from Haiti to Bangladesh, according to the Financial Times.   A drought in Russia in 2010 forced suspension of Russian grain exports that year and set in motion the so-called Arab spring.

Since the days of Gamal Abdel Nasser, the Egyptian government has provided subsidized bread to the population. A disk of round flat bread costs about a penny. In the later 2000s, however, the Mubarak government found it could not keep pace with surging grain costs. As Egypt’s population doubled from 20 million in 1950 to 40 million in 1980 and now more than 80 million, Egypt has gained first place as the world’s largest wheat importer. The price rises of 2007-2010 exceeded the Mubarak government’s resources. Cheap bread vanished from the stores. Discontent gathered. In the August 18 issue of the British magazine The Spectator, John R. Bradley, an Arabic-speaking journalist long resident in Egypt, described what happened next:

“The conversations of tiny groups of Cairo’s English-speaking elites, and their Western drinking companions, were a world apart from talk among the Egyptian masses. … The main hope of those who poured into Tahrir Square was shared by the revolutionaries in Tunisia: that sudden and radical change would miraculously mean affordable food.”

And if food prices surge again? China is especially vulnerable to food cost inflation. In just one month, July 2011, the cost of living jumped 6.5%. Inflation happily subsided over the course of 2012. Springtime hopes for a bumper U.S. grain crop in 2012 enabled the Chinese central bank to ease credit in the earlier part of the summer. Now the Chinese authorities will face some tough choices over what to do next.

Labour unrest spreads in Egypt, says Al Jazeera.

The textile strikes are an early test for newly elected Islamist president Mohamed Mursi as he strives to form a cabinet to replace the army-backed interim administration so he can start tackling the faltering economy.

“The coming revolution will correct the path of the first one. It will be a labour revolution. Workers sparked the
first revolution, then it was stolen from them,” said Hussein, referring to how left-wing groups have been crowded out by Islamists and the army since Mubarak was ousted. He estimated that Egypt had around 300,000 textile workers, including 100,000 in the state sector.

Misr Spinning and Weaving employees told Reuters they had been expecting delegations from the ministries of industry and labour to head to Mahalla to negotiate, but none had arrived.

Between 3,000 and 4,000 have staged an open-ended sit-in at the factory to call for a rise in basic wages, a purge of corrupt officials and better conditions at the firm’s hospital.

They want an increase in their share of company profits and basic pay of at least 1,500 Egyptian pounds ($250) per month. They say their pay currently ranges from 700 to 1,000 pounds.

They set up tents on Wednesday to ward off sweltering summer heat and put up posters listing demands, complaining of a slide into poverty and poor health and demanding the government bring social justice for the sector.

Labour unrest has also hit the country’s ceramics sector. Disputes between workers and management at Ceramica Cleopatra, one of Egypt’s biggest privately owned ceramics firms, led to clashes between police and workers in Suez city on Tuesday.