Inflation threatens to exacerbate inequalities and widen the gap between billions of people struggling to break even
This week alone there have been protests by the political opposition in Pakistan, nurses in Zimbabwe, unionized workers in Belgium, railway workers in Britain, indigenous peoples in Ecuador, hundreds of US pilots and some European airline workers. Sri Lanka’s Prime Minister on Wednesday declared an economic collapse after weeks of political turmoil.
Economists say Russia’s war in Ukraine has fueled inflation, driving up energy costs and the prices of fertilizers, grains and cooking oils further as farmers struggle to grow and grow in one of the world’s most important agricultural regions export.
As prices rise, inflation threatens to deepen inequalities and widen the gap between billions of people struggling to cover their expenses and those who are able to sustain them.
“We’re not all in this together,” said Matt Grainger, head of inequality policy at the anti-poverty organization Oxfam. “How many of the richest even know what a loaf of bread costs? They don’t really know, they just absorb the prices.”
Oxfam is calling on the group of 7 leading industrialized nations, holding their annual summit in Germany this weekend, to grant debt relief to developing countries and tax corporations on excess profits.
“This is not just a crisis in its own right. It comes from an appalling pandemic that has led to rising inequality around the world,” Grainger said. “I think we will see more and more protests.”
The demonstrations have drawn the attention of governments, which have responded to rising consumer prices with support measures such as expanded utility bill subsidies and cuts in fuel taxes. This often brings little relief because the energy markets are volatile. Central banks are trying to ease inflation by raising interest rates.
Meanwhile, striking workers have pressured employers to start talks about wage increases to keep up with soaring prices.
Eddie Dempsey, a senior official at Britain’s Rail, Maritime and Transport Union, which this week nearly brought Britain’s rail services to a standstill with strikes, said there would be more calls for wage increases in other sectors.
“It’s about time Britain implemented a pay rise. Wages have been falling for 30 years and corporate profits have been through the roof,” Dempsey said.
Last week, thousands of truckers in South Korea ended an eight-day strike that caused delivery delays as they demanded minimum wage guarantees amid rising fuel prices. Months earlier, around 10,000 kilometers away, truckers in Spain went on strike to protest the price of petrol.
The Peruvian government imposed a brief curfew after protests over fuel and food prices turned violent in April. Truckers and other transport workers had also gone on strike, blocking major highways.
Protests over the cost of living toppled Sri Lanka’s prime minister last month. Middle-class families say the island nation’s economic crisis is forcing them to skip meals, prompting them to consider leaving the country altogether.
The situation is particularly dire for refugees and the poor in conflict zones such as Afghanistan, Yemen, Myanmar and Haiti, where fighting has forced people to leave their homes and rely on aid organizations that are struggling to raise funds themselves.
“How much for my kidney?” is the question most frequently asked of one of Kenya’s largest hospitals. Kenyatta National Hospital issued a reminder on Facebook this week that selling human organs is illegal.
It has become more expensive for the middle class in Europe to commute to work and put food on the table.
“Increase our salaries. Now!” chanted thousands of unionized workers in Brussels this week.
“I came here to defend the purchasing power of citizens because demonstrating is the only way to change something,” said protester Genevieve Cordier. “We can’t get by anymore. Even with two salaries … we both work and can’t get by.”
In some countries, a combination of state corruption and mismanagement underpins the economic turmoil, particularly in politically deadlocked countries like Lebanon and Iraq.
The protests reflect a sense of growing financial insecurity. This is how it happened in Africa:
– Health workers in Zimbabwe went on strike this week after rejecting the government’s offer of a 100 percent pay rise. The nurses say the offer is nowhere near skyrocketing inflation of 130%.
– Kenyans have taken to the streets and online to protest as food prices have risen by 12% over the past year.
– One of Tunisia’s most powerful unions held a nationwide public sector strike last week. The North African country is facing a deepening economic crisis.
– Hundreds of activists protested against the rising cost of living in Burkina Faso this month. According to the United Nations World Food Program, prices for corn and sorghum have skyrocketed by more than 60% since last year, reaching as much as 122% in some provinces.
“In terms of this ever-increasing cost of living, we found that the authorities have been cheating people,” said Issaka Porgo, president of the civil society coalition behind the protests in the West African country.
The protesters condemn the military junta that toppled the democratically elected president in January for granting themselves a pay rise while the population faces soaring prices.
The International Monetary Fund says inflation this year will average about 6% in advanced economies and nearly 9% in emerging and developing countries. Global economic growth is expected to slow by 40% to 3.6% this year and next. The IMF is urging governments to focus aid packages on those most in need to avoid triggering a recession.
The slowdown comes as the COVID-19 pandemic is still gripping industries worldwide, from manufacturing to tourism. Climate change and drought are affecting agricultural production in some countries and leading to export bans that push up food prices even more.
Rising food prices are particularly painful in low-income countries, where 42% of household income is spent on food, said Peter Ceretti, an analyst who puts food safety consultancy Eurasia Group at risk.
“We will see more protests, probably wider and angrier, but I don’t expect destabilizing or regime-changing protests,” he said, as producers adjust and governments approve subsidies.
Associated Press writer Jill Lawless in London; Sam Mednick in Ouagadougou, Burkina Faso; Cara Anna in Nairobi, Kenya; and Mark Carlson in Brussels, Belgium, contributed to this report.
Copyright © 2022 by The Associated Press. All rights reserved.
https://abc7.com/inflation-baby-formula-gas-prices-recession/11995137/ Inflation threatens to exacerbate inequalities and widen the gap between billions of people struggling to break even