Thursday, April 10, 2008

High food prices seen leading to strikes, protests in Asia

By Ian Timberlake, Agence France-Presse

SINGAPORE: Asia’s governments face strikes, protests and hoarding in response to the spiralling cost of food and other essentials that threatens to damage them at the polls, observers say.

Asia’s political leaders are on guard, wary of the potential for social unrest as people across the region struggle to cope with steeper prices for staple goods—particularly rice.

“There will be unrest and the poorer countries will experience that much more than rich countries like Malaysia and Singapore,” said Ooi Kee Beng, a fellow at the Institute of Southeast Asian Studies in Singapore.

Philippines hard hit

Poverty-stricken Bangladesh and the Philippines have been particularly hard hit by higher food prices.

“Soaring food prices have become a serious threat for the survival of the present caretaker government,” said Bangladeshi political scientist Ataur Rahman.

Bangladeshis and poor Indonesians are estimated to spend close to 70 percent or more of their income on food.

In the Philippines, one of the world’s biggest importers of rice, the government deployed troops last week to deliver grain to poor areas of the capital Manila amid worries about shortages.

It also ordered police to arrest rice hoarders as part of efforts to pre-empt the “impact on peace and order” of rises in basic commodity prices, the police said.

Trouble in Myanmar

Analysts have said economic misery in crushingly-poor Myanmar was a force behind protests which drew up to 100,000 people into the streets of the military-ruled country last year.

The unrest became the biggest challenge to the regime in almost 20 years, until the junta in late September unleashed deadly force to end it.

Demonstrations initially began on a small scale in August after a sharp fuel price hike.

The junta said 15 people died in the crackdown but rights groups have given a far higher toll.

Experts say soaring global crude oil prices are among the factors to blame for Asia’s food inflation. Higher fuel prices directly translate into an added burden for the region’s poor through, for example, higher fares on public buses which are often people’s only mode of transport.

In Indonesia, higher fuel costs mean a rise in the price of kerosene which is widely used by the poor for cooking.

Indonesia’s late dictator Suharto was forced to step down a decade ago during massive civil unrest after he raised fuel prices during a crippling economic crisis.

Facing an election next year, President Susilo Bambang Yudhoyono has sworn off further cuts to fuel subsidies but analysts say most Indonesians are being squeezed anyway by escalating costs of essentials.

Social unrest in China’

The government has responded by distributing subsidised cooking oil and promising rice handouts but the rice distribution would not reach enough needy people, said Hendri Saparini, an economist with the Tim Indonesia Bangkit think-tank.

“If in three months there is no action from the government, I really worry there is going to be social unrest,” she said.

In China, inflation is of particular concern because it threatens to lead to social unrest and fuel anger at the government, as it did ahead of 1989 democracy protests that the military crushed.

The price of China’s staple meat, pork, has risen by more than 60 percent year-on-year.

“There is a lot of resentment (because of) the rise of prices,” said Jean-Pierre Cabestan, of Hong Kong Baptist University.

That resentment could become “a possible source of tension in the future,” he said, adding however that the risk of unrest from inflation is less now than in the 1980s, partly because the country’s much larger middle class has a stake in the stability of the system.

But for China’s low-paid working class the situation is different.

“I think there clearly is potential for worker unrest resulting from inflation,” said Geoffrey Crothall, a Hong Kong-based spokesman for the non-governmental China Labour Bulletin, an organisation promoting labour rights in China.

Strikes in Vietnam

In communist Vietnam, where consumer prices rose more than 16 percent year-on-year in the first quarter of 2008, strikes are becoming more frequent. Last week more than 15,000 workers at a Vietnamese shoe factory went on a two-day strike “because of the increase in prices which has hit people hard recently,” said union official Nguyen Thi Dung.

Even in Singapore, one of Asia’s wealthiest countries which maintains tight restrictions on public assembly, people have raised their voices.

Ten people were detained by police last month after they held a rally, without a permit, to protest rising living costs, witnesses said.

The World Bank warned last week of possible “heightening political tensions” in Asia if rising inflation stalls poverty reduction measures.

Rising prices have already emerged as a key issue in Asian elections.

Malaysia’s ruling coalition in elections last month ceded five states and a third of parliamentary seats to the opposition, which campaigned heavily on high inflation.

Rising costs had triggered rare public protests and, after his stunning electoral blow, Prime Minister Abdullah Ahmad Badawi backed down on looming fuel price hikes.

Pakistan went to the polls in February overshadowed by suicide bombings but also by a shortage of wheat for the country’s staple flat bread, the price of which had doubled.

Voters dealt a severe defeat to parliamentary allies of President Pervez Musharraf.

India’s ruling coalition is under pressure to curb rising prices ahead of elections in nearly a dozen states this year and general elections due by May next year.

Both the communists, who prop up the minority government in parliament, and the opposition Bharatiya Janata Party have threatened national anti-inflation protests.

Ooi, of the Institute of Southeast Asian Studies, said the political danger from rising prices depends on several factors including the extent of income disparities in a country.

“I think what is decisive is whether or not the population feels that the government is competent and
uncorrupted,” Ooi said.

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