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Leading Indicators of Revolt in the Middle East and Northern Africa: Corruption, Unemployment and Percentage of Household Money Spent on Food

George Washington's picture





 

Washington’s Blog

What determines which Middle Eastern or North African (MENA) countries will face revolt?

On February 3rd, the Economist came up with a list of "vulnerable" countries based upon the amount of democracy, corruption and press freedom:

 

Unemployment

But the Economist index doesn't take unemployment into account unemployment.

As Alternet notes:

Arab Labour Organisation (ALO) figures show that Arab countries have among the highest unemployment rates in the world -- an average of 14.5 percent in fiscal year 2007/08 compared with the international average of 5.7 percent. The rates may even be higher if one accepts unofficial estimates.

Global risk specialist Mi2g notes:

There are a lot of “orphans” and most are young – 65 percent of the population of the Arab League is under the age of 30. Youth unemployment rates are exorbitantly high – as high as 75 percent in some countries like Algeria. While the informal economy provides partial compensation, this does not provide security; the Jasmine Revolution was triggered by the self-immolation of a young man, Mohamed Bouazizi, unemployed after police confiscated his wheelbarrow, used to make ends meet by selling fruits and vegetables.

On February 2nd, Nomura published a report written by Steven Cook of the Council on Foreign Relations, arguing that youth unemployment and underemployment - along with a large proportion of youth - are primary factors driving revolt in the Middle East:

In both Tunisia and Egypt factors were at play which are also to be found in other economies in the region, notably:–An autocratic and corrupt regime [and] A significant - youth bulge and related unemployment and under-employment....

In other words, when there alot of young, unemployed (or under-employed) people, they might revolt.

Here are statistics from Nomura showing the percentage of youth under 15 years old and median age in years in the Middle East and Northern Africa:

Country Population Aged <15> Median Age (2010)
Algeria 27.0% 26.2%
Egypt 32.1% 23.9%
Iran 23.8% 26.8%
Iraq 40.7% 19.3%
Jordan 34.0% 22.8%
Libya 30.1% 26.2 %
Morocco 28.0% 26.2%
Saudi Arabia 32.0 % 24.6%
Syria 34.7% 22.5%
Tunisia 22.9% 29.1%
Yemen 43.4% 17.8%
On February 9th, the Economist came up with a revised index, which they call the "shoe thrower's index" (throwing one's shoes at someone is the ultimate sign of disrespect in the Arab world).

The index gives a 35% weighting for the share of the population that is under 25; 15% for the number of years the government has been in power; 15% for both corruption and lack of democracy as measured by existing indices; 10% for GDP per person; 5% for an index of censorship and 5% for the absolute number of people younger than 25:

As a side note, youth unemployment is rising globally. As the New York Times reported last August:

Youth unemployment across the world has climbed to a new high and is likely to climb further this year, a United Nations agency said Thursday, while warning of a “lost generation” as more young people give up the search for work.

 

The agency, the International Labor Organization, said in a report that of some 620 million young people ages 15 to 24 in the work force, about 81 million were unemployed at the end of 2009 — the highest level in two decades of record-keeping by the organization, which is based in Geneva.

 

The youth unemployment rate increased to 13 percent in 2009 from 11.9 percent in the last assessment in 2007.

 

“There’s never been an increase of this magnitude — both in terms of the rate and the level — since we’ve been tracking the data,” said Steven Kapsos, an economist with the organization. The agency forecast that the global youth unemployment rate would continue to increase through 2010, to 13.1 percent, as the effects of the economic downturn continue. It should then decline to 12.7 percent in 2011.

 

***

 

In some especially strained European countries, including Spain and Britain, many young people have become discouraged and given up the job hunt, it said. The trend will have “significant consequences for young people,” as more and more join the ranks of the already unemployed, it said. That has the potential to create a “ ‘lost generation’ comprised of young people who have dropped out of the labor market, having lost all hope of being able to work for a decent living.

 

***

 

Data from Eurostat, the European Union’s statistical agency, show Spain had a jobless rate of 40.5 percent in May for people under 25.

Indeed, as I have previously pointed out, youth unemployment is also very high in the U.S. And when those who have given up looking for work and those who are underemployed are taken into account (i.e. using the U-6 measure of unemployment), it is clear that the youth of much of the world are suffering Depression-level unemployment.

Food

As many have noted, soaring food prices are also one of the main reasons for the revolts in Tunisia, Egypt, Bahrain, Yemen, Libya and elsewhere.

Nomura pointed out last September:

 

The World Bank (2009, p.11) estimates that nearly two-thirds of total income
is spent on food in the poor urban population of the developing world. High food prices reduce the ability to meet even basic needs and can lead to increased poverty and become a potential source of protests, riots and political tension ....

 

Alternet notes:

 

"Tunisians and Algerians are hungry. The Egyptians and Yemenis are right behind them," Emirati commentator Mishaal Al Gergawi wrote in the Dubai- based newspaper Gulf News. "Mohammad Bouazizi didn't set himself on fire because he couldn't blog or vote. People set themselves on fire because they can't stand seeing their family wither away slowly, not of sorrow, but of cold stark hunger."

 

While Americans spend less than 15 percent of household expenditures on food, Egyptians spend 50%.

As UPI reports:

Just as in Tunisia, the spark was skyrocketing food prices -- increasing at a brisk 17 percent annually in Egypt. That's unhealthy in any economy but particularly one in which, as estimated by the investment house Nomura, on average 50 percent of household expenditures goes toward food. (In the United States, by comparison, food costs represent 14 percent -- and falling -- of the Consumer Price Index.)

 

For that, Egyptians may in no small way thank the U.S. Federal Reserve and its policies of "quantitative easing" -- known by most as "printing money."

 

Nomura prepared the following chart showing household spending on food as a percentage of income and per capita GDP (I've bolded information on the MENA countries):

Rank Country Nomura’s Food Vulnerability Index (NFVI) GDP  per 
capita Current prices US$
Household 
spending  on 
food  % of total 
consumption
Net food 
exports 
(%   of  
GDP)
1 Bangladesh 101.5 497 53.8 -3.3
2 Morocco 101.3 2,769 63.0 -2.1
3 Algeria 101.3 4,845 53.0 -2.8
4 Nigeria 101.2 1,370 73.0 -0.9
5 Lebanon 101.2 6,978 34.0 -3.9
6 Egypt 101.0 1,991 48.1 -2.1
7 Sri Lanka 101.0 2,013 39.6 -2.7
8 Sudan 100.9 1,353 52.9 -1.3
9 Hong Kong 100.9 30,863 25.8 -4.4
10 Azerbaijan 100.8 5,315 60.2 -0.6
11 Angola 100.8 4,714 46.1 -1.4
12 Romania 100.7 9,300 49.4 -1.1
13 Philippines 100.7 1,847 45.6 -1.0
14 Kenya 100.7 783 45.8 -0.8
15 Pakistan 100.6 991 47.6 -0.4
16 Libya 100.6 14,802 37.2 -1.7
17 Dominican Rep 100.6 4,576 38.3 -1.1
18 Tunisia 100.5 3,903 36.0 -1.1
19 Bulgaria 100.5 6,546 49.5 -0.1
20 Ukraine 100.5 3,899 61.0 0.9
21 India 100.4 1,017 49.5 0.3
22 China 100.4 3,267 39.8 -0.3
23 Latvia 100.4 14,908 34.3 -1.1
24 Vietnam 100.4 1,051 50.7 0.8
25 Venezuela 100.4 11,246 32.6 -1.0
26 Portugal 100.4 22,923 28.6 -1.8
27 Saudi Arabia 100.3 19,022 25.1 -1.8
28 Kazakhstan 100.3 8,513 44.7 0.1
29 Uzbekistan 100.3 1,023 34.7 -0.3
30 Russia 100.3 11,832 34.4 -0.7
31 Mexico 100.3 10,232 34.0 -0.5
32 Indonesia 100.2 2,246 47.9 1.0
33 Croatia 100.2 15,637 30.1 -0.9
34 Peru 100.2 4,477 31.8 -0.3
35 Greece 100.2 31,670 38.3 -0.7
36 Belarus 100.1 6,230 42.3 0.8
37 Slovenia 100.1 27,019 25.8 -1.3
38 Syria 100.1 2,682 47.9 1.5
39 Turkey 100.1 9,942 35.2 0.2
40 South Korea 100.1 19,115 23.1 -0.9
41 Colombia 100.1 5,416 28.0 0.0
42 South Africa 100.0 5,678 25.0 -0.1
43 Serbia 100.0 6,811 44.8 1.4
44 Czech Republic 100.0 20,673 27.4 -0.4
45 Lithuania 100.0 14,098 41.1 1.1
46 Guatemala 99.9 2,848 37.1 1.3
47 Slovakia 99.9 18,212 22.3 -0.4
48 Poland 99.9 13,845 32.1 0.7
49 Singapore 99.9 37,597 21.9 -1.0
50 Kuwait 99.9 54,260 30.0 -1.1
51 UK 99.8 43,541 22.5 -1.0
52 Israel 99.8 27,652 17.7 -0.5
53 Japan 99.7 38,455 19.8 -0.6
54 Italy 99.7 38,492 22.1 -0.3
55 Thailand 99.6 4,043 39.0 2.7
56 Hungary 99.6 15,408 29.4 1.6
57 Sweden 99.5 51,950 17.4 -0.7
58 Finland 99.5 51,323 20.5 -0.5
59 Germany 99.5 44,446 18.5 -0.3
60 Spain 99.5 35,215 21.8 0.4
61 Austria 99.5 49,599 19.5 -0.3
62 Ecuador 99.5 4,056 30.6 2.5
63 Switzerland 99.5 64,327 24.0 -0.5
64 Malaysia 99.5 8,209 37.1 2.9
65 France 99.5 44,508 22.0 0.2
66 Brazil 99.5 8,205 20.8 1.8
67 United States 99.3 46,350 13.7 0.2
68 Canada 99.3 45,070 18.0 0.6
69 Australia 99.2 47,370 19.7 1.1
70 Belgium 99.2 47,085 15.9 0.9
71 Chile 99.1 10,084 22.5 3.1
72 Ireland 99.1 60,460 25.8 1.5
73 Norway 99.0 94,759 16.9 -0.6
74 Luxembourg 99.0 109,903 19.1 -1.0
75 Costa Rica 98.9 6,564 30.6 4.7
76 Netherlands 98.9 52,963 13.3 1.6`
77 Denmark 98.8 62,118 16.8 1.8
78 Argentina 98.7 8,236 33.4 5.6
79 Uruguay 98.5 9,654 25.3 5.6
80 New Zealand 97.7 30,439 18.8 7.5

As should be noted, there are countries outside of MENA with extremely high percentages of spending on food.

 


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Tue, 02/22/2011 - 01:04 | Link to Comment AnAnonymous
AnAnonymous's picture

The article does not go deep enough.

Instead of focusing on the countries area where revolts are happening, it would be better to get an all encompassing view to understand why it is not happening elsewhere.

Nigeria does not look in a better shape than any other country still, there is little going on there.

And they are not alone...

So why nothing?

Mon, 02/21/2011 - 20:30 | Link to Comment malek
malek's picture

Good read, just one note:

The number for Morocco showing Household spending on food being 63% of total consumption seems out of whack.
I've been there several times and have friends there, and from my point of voiew that can't be right - and I can't see how comparable countries like Algeria or Tunisia spend so much less in comparison.

Mon, 02/21/2011 - 16:43 | Link to Comment TruthHunter
TruthHunter's picture

It would be interesting to see the deterioration of

these countries' currencies over the last year against the big three:

Dollar, Euro, and Yen.

I suspect that unrest would correlate very closely.

 

What would it take to bring riots to a Freedom square

near you?  $7 $9 bread?

 

Mon, 02/21/2011 - 16:42 | Link to Comment falak pema
falak pema's picture

Such a scheme would nullify the rising tide of current popular revolt. I don't think anybody in the West has the gall, the balls, to do it right now. But if the impending economic tsunami unfurls its inexorable rage, then all options become open as anarchy will replace pseudo, nascent democracy. But a deflationary reaction of assets destruction could send the inflationary spiral back to square one. Oil could be at $30. As for food and water... 

Mon, 02/21/2011 - 16:13 | Link to Comment Rick64
Rick64's picture

It wouldn't surprise me if the Powers that be come up with a ME union with our allies and occupied countries holding majority control.

Mon, 02/21/2011 - 15:59 | Link to Comment falak pema
falak pema's picture

It's amusing to see the West rank its ex-surrogate Mid-east regimes on a hastily concocted scale of corruption. Whereas, for the time being, no villainous Banksta has been jailed, the ancient partners to these very nefarious bands of smelly front-men in their oil/bullion stealing schemes, those  very whistle blowers permit themselves to judge sanctimoniously these still running oligarchic regimes which are falling like bowling alley ducks in the face of Internet induced popular change. For those internally silenced sources to now deride those who rowed like galley slaves for western corporates, all the while stringing their own fortunes like eager squirrels, has a taste of the obscene. Now as the rats flee the sinking middle-east ship, all pre-fabricated by the american imperium, the stupendous decision of history deploying like an unbelievable nightmare (dream for others), obliges those in power in the West  to run to safety, swearing on every holy book known and even those unknown, that they never supported these very corrupt vermin, as they sink so ominously into beckoning oblivion.

Its a strange ballet, one that Julian Assange must be watching with a sense of hardly hidden satisfaction. The fallen angel has destroyed yesterday's gods. With a vengeance to take your breath away.

Mon, 02/21/2011 - 15:56 | Link to Comment earnulf
earnulf's picture

Just out of curiosity, where does Iran fit on the household food list, either I missed it or it's not included.   I understand why they are not counted in the arab lists, but the food list they are absent?

Mon, 02/21/2011 - 15:31 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

something is wrong when the worlds richest man is from a 3rd world country and america's banker is communist china.

 

http://nakedempire.wordpress.com/

Mon, 02/21/2011 - 15:18 | Link to Comment ZackAttack
ZackAttack's picture

Well, according to western central banksters, high food prices are simply a sign of increasing demand in developing markets for a high-quality diet. It's all China's fault, you see.

And if they don't like food inflation, why, they have the monetary and fiscal policy tools available to control it.  

Tue, 02/22/2011 - 00:59 | Link to Comment AnAnonymous
AnAnonymous's picture

And if they don't like food inflation, why, they have the monetary and fiscal policy tools available to control it.  

 

Too bad they did not receive the memo. Instead of fleeing their countries, all these dictators could have unpegged from the USD and remained in power, would have been so much easier...

Mon, 02/21/2011 - 15:01 | Link to Comment Popo
Popo's picture

WTF? Hong Kong ranks high up on the %-spent on food consumption list?

Very surprising indeed. Can that be right???

Mon, 02/21/2011 - 15:28 | Link to Comment Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Ladies and gentlemen,

Oil, gold and silver have value but, but, but...

Water and Food are the necesseties of life.

Watch the Arab countries turmoil continue...then note the process begin of  citizens starving for water and food.

After one month, begin counting how many Arab citizens have passed on to their heaven.

This is the plan of the NWO.

Mon, 02/21/2011 - 15:16 | Link to Comment 10kby2k
10kby2k's picture

25.8% is moderate.  These are not ranked in consumption order...read the actual data.

Mon, 02/21/2011 - 15:18 | Link to Comment Popo
Popo's picture

Ah. Right. Thx.

Skimmed too quickly...

Mon, 02/21/2011 - 14:58 | Link to Comment High Plains Drifter
High Plains Drifter's picture

I hope people understand that they stripped all of the national guard armories in this country of heavy weapons a long time ago. I wonder why.

Mon, 02/21/2011 - 14:57 | Link to Comment Rick64
Rick64's picture

  When you have the IMF, World Bank, USAID, EU, U.S. all working together with corporations to exploit these countries what do you expect. The corporations take the natural resources (minerals, oil, agriculture, ect..) while exploiting the labor force then sell those resources to the highest bidder leaving that country with a shortage. On top of that the money made from the exploitation is taken out of that country (except for the bribes paid to the regime) and very little reinvested.

Mon, 02/21/2011 - 14:50 | Link to Comment piceridu
piceridu's picture

As usual an excellent read; I appreciate your time and effort on all the topics you continue to disect.

Mon, 02/21/2011 - 17:20 | Link to Comment Zero Govt
Zero Govt's picture

Yes but George Washington missed the No.1 indicator of revolt and corruption: GOVERNMENT

Yes George the number one cause of war, poverty, wealth destruction, corruption, slow progress, food problems and revolt (because of its authoritarism) is that most ignorant and corrupt monopoly power structure and institution for societies parasites, Government.

Isn't that so George 'progressive' Washington?

The problem is Govt, the solution is to end Govt

Mon, 02/21/2011 - 14:45 | Link to Comment johnQpublic
johnQpublic's picture

just for comparisons sake, where do we fit on these charts, in both phallical and real numbers?

Mon, 02/21/2011 - 15:09 | Link to Comment 10kby2k
10kby2k's picture

see number 67 above

Mon, 02/21/2011 - 15:58 | Link to Comment TBT or not TBT
TBT or not TBT's picture

Wow, this constitution thingy works great.

Do NOT follow this link or you will be banned from the site!