Rising Food and Energy Prices Fueling Unrest in Latin AmericaMarch 6, 2011
By Oscar Montealegre
Recently, the World Bank announced that rising food prices throughout the world have reached ‘dangerous levels.’ According to the World Bank, international food prices have increased by 30 percent since February 2009. Even more alarmingly is that it is estimated that oil and metal prices have skyrocketed 100 percent compared to a year ago.
In certain parts of Latin America, citizens have passionately voiced their concerns with rising prices. For instance, in Southern Chile, protestors assembled in opposition against the Chilean government intentions to increase gas prices. Eventually, the Chilean government reached a compromise, agreeing to only increase prices 3 percent, instead of a whopping 16 percent.
Bolivia’s president, Evo Morales, had planned to increase gas prices by 73 percent and diesel fuel by 83 percent. This announcement did not go well with the Bolivian people. A five-day national protest resulted, causing a dent to Bolivian commerce, business and daily operations. No resolution or compromise has been reached as of yet.
In Venezuela, food prices are getting out of control, increasing at the tune of almost 40 percent. In Argentina, independent economists and analysts reported that Argentine wage increases are being diluted with the rapid rise of food prices. To make matters worse, inflation in Argentina reached anywhere between 25 to 30 percent in 2010, with no stabilization in sight for the near future.
The unrest with higher food prices can be seen in other continents. Algeria suffered numerous fatalities due to protests that quickly evolved into violent riots. Just last year Mozambique was jolted with angry protestors fighting against the increase of bread prices, leaving more than ten deaths. In fact, food inflation was one of the many factors that sparked the Egyptian revolution this year.
The lesson for governments in Latin America and others is that food inflation cannot be taken lightly. Obviously, food is a basic necessity, and the humanitarian spirit in me adheres to the notion that food should be a basic right for all of humanity. However if food becomes unaffordable and unattainable, societal unrest is to be expected. For the purpose of Latin America, which is experiencing a positive outlook, it’s economic momentum can easily be derailed if food and energy prices continue to increase without governments making an effort to tame its’ inflation. Just look at what happened to Mubarak and his reign on Egypt.