Monthly Archives: February 2011

Democratization and Popular Protest in the Middle East

Libyan Protestors in Benghazi city.

Libyan Protestors in Benghazi city.

For several weeks I’ve resisted the temptation to blog on groundswell of popular protest rocketing across the Middle East. In part, my hesitation was driven by the expansive coverage already offered by some of the best bloggers on the internet: Daniel Drezner, David Rothkopf, Duncan GreenGideon Rachman, and Stephen Walt have all blogged on events in recent days. In part, my hesitation was also driven by the excellent coverage offered by the Daily Show  in recent days as well. But recent events in Libya, where Moammar Gadhafi, who has been in power for more than 40 years, has been engaged in a desperate struggle to put down popular protests by ordinary Libyans demanding democratization—and more specifically a recent blog post by political scientist Benjamin Barber—sparked my curiosity.

Benjamin Barber is probably already well-known to most readers of this blog. His work on democratic politics (strong vs. thin democracy) as well as his work on globalization (Jihad vs. McWorld) make him a staple in most comparative politics and international relations programs. Writing at the Huffington Post last week, Barber made the case that whether or not Gadhafi is able to hold on to power Libya will likely face ongoing domestic turmoil—if not outright civil war—rather than the establishment of a democratic polis.

In Egypt, despite the success of popular protests in forcing the resignation of President Hosni Mubarak, there is similar reason to suspect that the democratic hopes of the masses will be dashed. Remember that it was the military that assumed control of the Egyptian government following Mubarak’s resignation, despite constitutional provisions that his successor should have been the head of the Egyptian parliament. The military is promising elections in September, but that remains months away.

And even if democratic elections are held in countries like Egypt, we still have to be aware of the limits of elections as a proxy for democracy. Real democracy—strong democracy, in Barber’s terms—requires more than elections. As Barber notes, the notion of radical individualism that lies at the heart of liberal political theory produces a limited form of democracy which negates the idea of community central to real (or strong) democracy. For Barber, then, it is the excess of liberalism that undermines democratic structures in the west and facilities cynicism and alienation.

The popular protests taking place across the Middle East in recent weeks is a sign of the strength of civil society in these countries. Despite decades of suppression, civil society in these countries is proving its vitality. Translating the strength of the popular protests into a democratic polis will clearly be a major challenge for the countries of the Middle East in the near future. Clearly there is reason for doubt. But there’s also reason for hope.

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What’s Driving Food Prices?

Women farmers on a sugar plantation in Mozambique.

Women farmers on a sugar plantation in Mozambique.

Global food prices continue to increase. According to the UN Food and Agriculture Organizasiton, global food prices reached the highest level on record in January, surpassing the mark previously set during the 2007-08 global food crisis. Last week, the European Union took the dramatic step of loosening longstanding import restrictions intended to protect European farmers from international competition. The move, which clearly hints that European markets are tighter than most observers believed, came on the heels of announcements by the US government that its corn harvest will likely be smaller than originally forecast. Meanwhile, international protests over higher food prices continue to rock governments around the world, most recently in Yemen.

What’s driving food prices higher? Obviously, production shortfalls and increasing demand in emerging economies are a part of the explanation. The diversion of food into ethanol fuel production, most notably for US corn production, is also an element.

But last week, Fed Chairman Ben Bernanke was forced on to the defensive. According to some critics, the decision of the US Federal Reserve to engage in a policy of quantitative easing, intended to increase the supply of money in the US economy in order to fuel economic growth, has driven investors into commodity markets, including food commodity markets, driving prices up. 

Although Bernanke strenuously denied the charges, the world’s top sugar traders last week echoed a similar concern. In a letter to the ICE Futures US exchange, the World Sugar Committee condemned “parasitic” computer traders who engage in high-frequency speculative trades which “only serve to enrich themselves at the expense of traditional market users.”  Sugar prices last week hit their highest levels in more than 30 years.

The Challenge of a Two-Speed Europe

German Chancellor Angela Merkel and French President Nicolas Sarkozy at the Summit of EU Heads of State.

German Chancellor Angela Merkel and French President Nicolas Sarkozy at the Summit of EU Heads of State.

The recent spate of crises in the European Union has once again raised questions about the future of the European Union. As Greece and Ireland struggle to rebuild their economies, the debate over the future of the European Union is once again on the stage. At one extreme, Germany and France continue to push for further integration, particularly within the eurozone, the group of seventeen countries using the euro as their unified currency. At the other end, euroskeptics in the European Parliament continue to debate the need for the EU in the first place. Governments in the United Kingdom and many of the former Soviet-bloc countries appear to be hesitant about further economic integration.

This tension, which has long been known as the problem of a two-speed Europe, has become more pronounced in light of recent economic crises and the pressure placed on the euro by the collapse of the Greek and Irish economies. Blogging at the Finanical Times, Philip Stephens points out  that the euro has to date been maintained largely by the sheer will of the German government and its willingness to devote considerable resources (not to mention foreign policy clout) to support the euro and prop up several of the weaker European economies.  Euroskepticism, in other words, has not reached the German Länder. This is not to suggest that German magnanimity is the basis of the euro…Germany clearly benefits as well, as its exports to the rest of the eurozone indicate. But what happens if Germany decides that the euro is no longer a core part of its foreign policy vision?

Or more to the point, is the euro in danger? There is good reason to believe that future crises are in store for the eurozone. The economies of Portugal, Italy, and Spain leave considerable room for concern.

A far more likely scenario, however, would be the continued development of a two speed Europe, with France and Germany leading the charge for a more integrated economic policy within the eurozone, while Britain, the Scandinavian states, and many of the former Soviet-bloc countries, standing on the sidelines of economic integration while moving forward with political union. Certainly some interesting things to consider.

Rising Global Food Prices

Algerians protest cuts in government subsidies amid food price increases.

Algerians protest cuts in government subsidies amid food price increases.

There’s been a great deal of discussion about the impact of the recent spike in global food prices. From Oxfam to the UN Food and Agriculture Organization to the World Economic Forum, there’s been considerable concern expressed that global food prices are threatening political and economic stability around the world. David Bosco, blogging at Foreign Policy, suggested that the recent surge in political protests across the Arab world, from Algeria to Egypt, may be in part connected to increases in global food prices. Recent Gallup polling  found that respondents across 18 Sub-Saharan African countries ranked food security and hunger as the primary concern.

The spike in food prices is a concern for governments around the world. But few clearly understand the causes, and there remains considerable debate about both what is driving the price increases and what should be done about them. In a recent column for the Financial Times, Javier Blas argued that,

The current spike in food prices has followed the chain of events of the crisis of 2007-08 in almost every aspect, a worrisome prospect. First the crop failures; second the export restrictions; and third the initial food riots followed by governments taking emergency measures to control rising food costs, including price caps and cuts to import tariffs. And now the fourth element of the 2007-08 food crisis is emerging: panic buying.

And now, Paul Krugman has chimed in on the debate. According to Krugman, the recent spike is due primarily to production shortfalls linked to erratic weather patterns, which in turn are likely connected to global climate change. While I generally find Krugman’s analyses compelling, I think here he’s too quick to dismiss the impact of speculative investment in food commodities. Speculation clearly has an important role to play in smoothing out market fluctuations. But, as Timothy Wise argues on the Triple Crisis blog,

Some $9 trillion in trades take place in commodity derivatives, with 80-90% in over the counter (OTC) trading, outside of public scrutiny. Five banks control 96% of derivatives activity, giving a few players decisive market power. The ratio of non-commercial speculators to commercial hedgers (those with a commercial interest in the traded commodity) is by some estimates 4:1, roughly a reverse of the shares ten years ago when speculators accounted for 20% of the activity. Then, such speculators indeed provided liquidity to the markets without overwhelming them. That is no longer the case.

The problem, in other words, is not the existence of speculators, but the dramatic increase in the scope of speculative investment. And given the size of the trade, there’s little governments may be able to do to curb these activities