Tuesday, January 25, 2011

Egypt's Hunger

The nation of Egypt is the Arab world's largest nation population wise, with 83 million souls. In 1980, it's population was only 45 million.. and herein lies a good part of Egypt's problem.. population growth colliding with the limits of agriculture. Food prices are rising fast in Egypt, where the vast majority of the population has to spend a large (and sharply increasing) percentage of their incomes on basic food. As I explained last week, declining food production this year in combination with Big Ben's printing presses and increased demand from newly wealthy China and India have put the world's food situation in a precarious position, especially for poor nations like Egypt.

Like Tunisia, part to the problem is the corruption and nepotism of President Hosni Mubarak's government, which used heavy handed security forces to intimidate anyone brave enough to speak out. Hundreds of activists have "disappeared" over the last couple of decades. Corruption is at every level of government. Egypt also spends lavishly on it's military, supposedly as a defense against Israel. Mubarak's government has recieves about $3 billion in US aid each year, about half of which is military aid.. mostly paid as a ransom to keep the peace with Israel. To our credit, the US has helped the Egyptian people as well through US and UN aid agencies and trade treaties. The lifestyles of most Egyptians is acceptable; those with the right connections have it much better. Most Egyptians want what we all want.. a better life, education and peace. Mubarak's sham elections, corruption, heavy handed police and the setting up of his son, Gamal Mubarak, as heir apparent nauseated most, but life was still OK for most Egyptians. Full bellies and hope for a better future make for happy people. There was some semblance of economic growth, hope and justice for most.

As food prices began to rise last year however, those full bellies began growling for those at the bottom of Egypt's economic food chain. Riots and protests in several nations emboldened those who were hungry to begin their own protests last month. Mubarak's tough police units moved in swiftly and little was ever heard of the matter here in the outside world or on Egypt's media outlets. But when food price protests turned into violent mobs in Tunisia and forced out that nation's corrupt leadership, the Egyptian leadership began to get scared.

Sure enough, ever more bold and violent protests have taken hold in Egypt, culminating in today's bloody mayhem, when police opened fire on protesters, killing two protestors and a policeman. Earlier this week, ZeroHedge reported that large shipments of gold were leaving the nation. Today we saw tens of thousands violently protesting, throwing rocks and bottles at police in an event organized by protesters via Twitter and other social network sites. Today the Egyptian government blocked Twitter in Egypt. The police, obviously feeling threatened by flying debris, opened fire on protesters in Suez, killing one. Tonite we have confirmation that the heir apparent Gamal Mubarak and his family have fled to London with 97 suitcases. This is huge news.. it will show the Egyptian people that their corrupt government is crumbling. Members of Mubarak's political party were burning their membership cards. It looks like the rats are fleeing the rotten ship of state. I look for Gamal's departure to embolden the protesters tomorrow and unless something drastic is done I think Mubarak himself will join Tunisia's Ben Ali in exile before the weekend is out.

Tunisia was a small, insignificant nation not noticed in the grand scheme of the Great Powers. Egypt is a very different animal.. it has a very large military establishment and is a stone's throw from both Israel and Saudi Arabia. For US interests in the region, this could be a huge blow depending on what follows Mubarak. The peace treaty with Israel hangs in the balance. Egypt's army is infinitely stronger than Saudi Arabia's. The nightmare scenario for the US is that an Islamist government takes over in Egypt if Mubarak does fall. My guess here is something different.. I think Mubarak will go, but the Army will keep order and arrange new.. and free.. elections. This might actually work out well for the people of Egypt.. but I do think that any new government will be far less friendly to the US. The Army will not allow sweeping cuts to it's budget, and so while they'll have a new government, little of importance will change.

As with Tunisia, overthrowing corrupt, despotic regimes is the easy part. Delivering on things like food prices and stability is a whole other matter; the protests continue around the clock in Tunis days after the President fled the nation. Indeed when instability rears it's ugly head, the common people do the exact thing they should'nt.. hoard food, thus exacerbating the problems. The instability will deeply affect Egyptian financial institutions; bank runs are one likely event, as is a stock market massacre. Those who do empty their bank accounts will begin hoarding food, petrol and other basics. Solving the people's hunger for democracy will be the easy part. With a rapidly growing population and declining global harvests, solving their hunger will prove a mighty task indeed, especially if the ending here gets quite ugly.


  1. I would imagine that the world will outgrow it's food supply and we will be much more upheaval in the near future. Bankrupt and corrupt regimes will be seen for what they are rather than what they want to appear to be. The communication age makes it hard to hide the truth for long. Good article Mr. K.

  2. Amazing how this stuff never makes the main stream press....

  3. Dear Mr. Kowalski,

    Let me first state that I love your blog. I check for new posts at least once a week and think both you and Jesse can be most prescient.

    Would you consider a private question or two from me via e-mail? Please let me know through this comments page, and/or I can post an contact e-mail address.

  4. Hi Anonymous: my e-mail addr is jimmy55313@yahoo.com