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Op-Ed: Oil price rises causing poverty in the Middle East

By Paul Wallis     Feb 25, 2008 in World
Everyone’s favorite planet-killing commodity is at it again. It doesn’t just start wars, it also causes poverty in really poor countries. It’s now driving up food prices in places like Jordan. The world just wouldn’t be the same without it.
Really try, and you can smash up the local fuel subsidies too. If they keep this up, we won’t need the World Trade Organization, the UN, IMF and World Bank to enforce world poverty. Oil could save a lot of money wasted on useless bureaucracies. The sheer genius of the oil market will cover all of it.
From the New York Times:
Here in Jordan, the cost of maintaining fuel subsidies amid the surge in prices forced the government to remove almost all the subsidies this month, sending the price of some fuels up 76 percent overnight. In a devastating domino effect, the cost of basic foods like eggs, potatoes and cucumbers doubled or more.
In Saudi Arabia, where inflation had been virtually zero for a decade, it recently reached an official level of 6.5 percent, though unofficial estimates put it much higher. Public protests and boycotts have followed, and 19 prominent clerics posted an unusual statement on the Internet in December warning of a crisis that would cause “theft, cheating, armed robbery and resentment between rich and poor.”
So even theologians can get the idea… Just not global economists.
Nothing like mindless greed to run a planet
Food riots are another rare gift:
In a few places the price increases have led to violence. In Yemen, prices for bread and other foods have nearly doubled in the past four months, setting off a string of demonstrations and riots in which at least a dozen people were killed. In Morocco, 34 people were sentenced to prison on Wednesday for participating in riots over food prices, the Moroccan state news service reported. Even tightly controlled Jordan has had nonviolent demonstrations and strikes.
Inflation was also a factor — often overlooked — in some recent clashes that were seen as political or sectarian. A confrontation in Beirut between Lebanese Army soldiers and a group of Shiite protesters that left seven people dead started with demonstrations over power cuts and rising bread prices.
Add some local monopolies, a bit of corruption, and a market culture based on price fixing, and the Earthly Paradise is firing on both cylinders.
Some countries are trying to help their people, with government spending, but that’s having the effect of adding to inflation as some more cash hits the siphons of private interests across the consumer market.
There’s a lot of human stories in the NYT article, and they’re grim enough. Actually, for the Middle East, any interest in human well being is almost miraculous.
The rest of the world can expect to see its own version of this.
(Adopts vocal style of 1950s newsreel)
Wherever there’s some economy with the alphanumeric skills of a dead cockroach, or some barely literate government, the oil price will do its usual good work of assassinating prosperity.
If you happen to have a government which has no concept of technology, you’ve hit the motherlode of the forces keeping oil a going concern.
(Play national anthem of oil market, which I think is the Horst Wessel.)
Much worse is the 30 year old pattern of humanity being abused by a filthy, obsolescent, regressive, almost entirely fraudulent, economic model which should have been buried in the late 70s.
Not so much as a single cornflake can move on this planet without being held hostage to some sleaze with oil futures. Oil dependency has never been anything but a liability.
Markets work on price rises. The commercial machine doesn’t have a real reverse gear.
Prices go down on a daily basis, but up on a yearly basis.
The only genuinely amusing thing about this is the likely response.
Standard format excuses for oil price movements:
· Barbie Doll supplies are getting low.
· US fuel supplies need to be increased on weekdays.
· Vaseline addicts are causing oil shortages.
· Self denial is good for you.
· Having money makes people act strange.
· Gaga market investors need more billions.
· Oil fuels democracy in the Middle East.
· Cars which can get more than three inches to the gallon are immoral.
· Public transport causes sex, so it has to be made more expensive.
· Due to so many people irresponsibly allowing themselves to be born, oil prices must rise.
· Famines support media networks.
· Food price rises will prevent obesity
And my personal favorite: “Market forces will solve everything.”
Sure they will, and Virgin Airlines is training pigs to replace the aircraft to keep fares down.
More about Oil prices, Middle East, Inflation