Starving Billionaires

Hard to decide if I should rant about Zimbabwe, or just democracy in general. They both don't work, both had a lot of promise and both need some kind of revolution. Today marks three weeks since elections were held on the southern African state and we're no closer to knowing the results than we were then. Well, actually, we can be pretty sure of the results that will be reported, but it seems like we'll probably never know who was the real winner. More proof that democracy doesn't work, another stolen election that the world will ignore as soon as the story falls from the headlines.

1980 brought hope to the troubled land known as different variations of names including Rhodesia through the colonial power as the free nation of Zimbabwe emerged with a strong, vibrant former guerrilla leader at the head of government. One has to remember that he was seen as a hero and brought a lot of good to Zimbabwe in the first decade of his rule which I think explains much of the reluctance of neighbouring leaders to step in and try to stop him from driving his country into oblivion. Infant mortality fell from 86 to 49 per 1000 live births, under five mortality cut by more than 50% and child malnutrition fell from 22% to 12%, allowing life expectancy to increase from 56 to 64. Zimbabwe was known as "the breadbasket of Africa". It didn't take long for these gains to be lost, how did it happen?

Starting from Mugabe's point of view, it's the fault of the west and of course part of the blame is to be found here. Of course it's not only a western plot, hatched by the British to cripple the economy, but the left overs from colonialism didn't leave the best starting point for a nation. It is true that Zimbabwean whites who made up less than 1% of the population owned more than 70% of the arable land, a situation that was far from equitable. The 80's saw the failure of a program known as "willing seller, willing buyer", which led to a movement to speed up the process. The Land Acquisitions Act of 1992 set the stage for tragedy as the government gave itself the right to set the price for land purchased and then allocated this land where it wished; with most of it going from capable farmers to senior government officials or wealthy indigenous businessmen with no knowledge of farming techniques. Today there are 60 white farmers estimated to be left, all faced with a massive intimidation campaign.

There is also the IMF, arguably the most evil, insidious organization on Earth. Money poured into the country upon independence from the IMF and it's partner henchman, the World Bank to help develop infrastructure and grow the economy. Of course this money comes with a hitch; friendly advice on how to run your finances. It's not for me to decide here which was worse for Zimbabwe, this new found wealth and advice or the lack of follow through on following all of it's guidelines, but the result has clearly been devastating as Zimbabwe is now a virtual pariah on the credit market.

Other reasons sited for Mugabe's growing insanity are as simple as women and disease. His first wife, Sally, died in 1992 and the president replaced her with a woman 40 years his junior with a taste for the high life. But my favourite has to be the syphilis theory. The poor man has been infected with the disease and is in fact slowly going insane, perhaps explaining his violent anti-homosexuality campaign of the past 10 years. Whatever the reasons, there is no question that things are spiralling out of control. Inflation is now running over 165,000% which makes it impossible for the population to obtain the most basic of goods. Now, we have the latest election fiasco. It is widely believed that Mugabe and his men stole the previous elections in 2004, so entering the latest vote, there was an understandable air of mistrust. Before the first vote had been cast, the opposition was already calling foul, and we had to know we were in for another circus.

The almost complete media ban within the country makes knowing what's happening almost impossible. But it's not hard to guess that the recount order was issued to lay the groundwork for either a claim that the results of the election are null and void, or a surprise Mugabe victory. Reports are leaking out of the country of preparations by the government to clamp down on the population, with torture camps being set up and opposition members being beaten. Meanwhile, the world stands by with their hands in their pockets. About the only good story I've read recently was from South Africa where the docker's union refused to unload a Chinese ship full of arms destined for Zimbabwe. Apparently it was a much larger shipment than usual and the workers feared they would be used against the people of Zimbabwe. Of course who should be credited for this small victory (which will be a moot one anyway when the ship gets to Luanda in Angola) depends on whether you read the IHT story or the CNN story (unions are communist inventions in Georgia).

The lack of response to the developing situation in Zimbabwe is shocking. About all we'll get is another round of sanctions and carefully worded condemnations. The sanctions will lead to more suffering for the poor as the elite scramble to find sources of foreign exchange. African leaders will meet to discuss events, the UN will hold an emergency meeting in Ghana to discuss events, the US will issue more travel warnings, but nothing will happen. The government will keep the rich and powerful happy by giving them land and printing larger and larger denomination notes making everyone billionaires with nothing to buy. And eventually, the world's attention will be drawn away from south-east Africa until the next crisis. Even the elephants seem angrier than the rest of the world.

Panem et Circenses

Bread and Circus Games. Formula, political strategy? Whatever it was, the Romans used it to keep the population happy for hundreds of years. So what happens to a system that relies on two basic principles to keep the populace pacified when one of them fails? The Romans gave the people the pleasures of food, gladiators, exotic animals, public baths, chariot races, sports competitions and theatre. Today's equivalent of this empire, a complicated system of inter-relationships between nations who share the ideals of capitalism as a means of distributing wealth and well-being with the USA as its figurehead has maintained a similar system to keep us all happy. But could it all be coming apart at the seams? Could the system that has been created literally snatch the bread from our mouths?

In case you haven't noticed, the world economic system is turmoil. OK, China, India and Russia have become financial powerhouses, the US has lost some clout as the dollar slides into irrelevance, oil is selling for over $100 a barrel and gold has also tripled in value in the last few years, actually breaking the $1000/ounce barrier awhile back. But people don't live on oil, or dollars or gold. We need food and water. So what happens when the price of food gets too high to afford? An economist would argue that this simply couldn't happen. The forces of supply and demand will ensure that prices will remain within a range where people will be able to buy and sell. However, this system seems to be breaking down as new money is pouring into the futures market for grains as investment banks search for new sources of high returns. Interestingly this has lead to a situation where somehow the cash price of certain grains isn't always matching the future contract prices on expiry. (It's a little complicated, NY Times story here). Other factors in the rising prices include, droughts in a few grain exporting nations (Australia), political unrest (Zimbabwe), biofuels being produced from maize, soybeans and palm oil (US, Brazil) and even a massive strike in Argentina. So, the supply side is screwed. The picture looks even starker on the demand side, at least easier to understand, as the world's population spirals out of control. We're also seeing demand for a higher-protein diet in growing economies like China an India. Finally, another wildcard that has to be mentioned, but will not be explored here, climate change.

So, what's the bottom line? When people start to feel nervous about having enough to eat, anything can happen. The same can be said of countries. Food riots caused a change in government in Haiti just this weekend. Investigators in Manila caught profiteers last month who were repackaging 20,000 fifty-kilogram bags of rice from subsidized government supplies for sale as higher-grade grain. The Phillipines, the world's largest rice importer, can't find anyone to sell them rice as China, Egypt, Vietnam and India, representing more than a third of global rice exports, curbed sales this year, and Indonesia says it may do the same. Violent demonstrations against the rising cost of living have been staged in several West African countries, including Cameroon, Burkina Faso and Senegal. Meanwhile, the government of the Ivory Coast was forced to cut taxes on basic household goods as food rioting threatened to spiral out of control. Here's Thai farmers guarding their crops.

So the price of bread has more than doubled in the past year while rice has skyrocketed 75% in just the last two months. What can be done about it? World Bank president Robert Zoellick called on rich countries including the United States, Japan and European Union to immediately fill a $500 million funding gap at the United Nations World Food Programme to offer food aid to the world's poorest as he warned that soaring food and energy prices were a serious concern that threatened to foster social unrest in an estimated 33 countries. Meanwhile US Treasury Secretary Henry Paulson warned on Sunday that governments should resist the temptation to try to control soaring food costs through price controls, which he said would likely make the situation worse. Hmmm, I wonder if there's anyway to provide this funding to save human lives...

I guess this is where the circus part of the equation comes into play. Not that I would ever equate war to a circus, or heaven forbid a US presidential election, but just a quick look at the numbers reveals what is fundamentally wrong with the world today. At a cost of $5,000 per second, the price tag for what is the quagmire that America has gotten into Iraq would fill the food gap in 100,000 seconds, or a little more than a day (a day, 3 hours and about 45 minutes). OK, yes, those figures on based on the estimated long term cost of the war, but remember that you have to pay the interest on your mortgage too! Barack Obama used the same figures in a recent speech when he said the war was costing each American family $100 a month (In fact the price is a little higher). This is costing the same people who are crying about paying $4 per gallon for gasoline to drive their SUV's to Blockbuster. Staying with the home of the brave and free, the candidates for president later this year have raised a total of over $800 million, so far. Now, whether or not you view any of these two events as a circus, you must admit there are better ways to "entertain" the people.