Created: Tuesday, 15 February 2011 14:37
Written by Trevor Rayne
FRFI 219 February / March 2011
‘A demographic time bomb’
Every country in the Middle East and North Africa is unique, with different political features, but they share underlying potentially explosive structural problems. The same forces that rebelled in Tunisia, the youth and the unemployed, exist in abundance throughout the region and they are moving to confront repressive regimes.
Shortly after the removal of Tunisia’s President Ben Ali, Amr Moussa, the Egyptian secretary-general of the Arab League, warned that the revolt in Tunisia may be a harbinger for the entire region: ‘The Tunisian revolution is not far from us. The Arab citizen has entered an unprecedented state of anger and frustration.’ The League announced a $2 billion regional jobs creation programme. A 2008 Financial Times special supplement on youth in the Middle East and North Africa warned: ‘The Middle East and North Africa are sitting on a demographic time bomb. The region presides over the lowest employment rate in the world. One in four people under the age of 25 is out of work. Yet over the next decade or so, the region is likely to experience growth in population of 150 million, the equivalent of two Egypts. What is to be done?...The spectre of disaffected youth with no prospect of gainful employment should haunt all of us.’ (Financial Times, 2 June 2008).
Two-thirds of Arab people do not live in big oil-producing countries. People under 25 make up 60% of the Arab population. Any slowing of economic growth and price rises has desperate consequences for millions of Arab people struggling in or on the brink of poverty. Tunisia’s economic growth fell from an average 5% per annum for the decade to 2008 to 3.8% in 2010. The unemployment rate is officially 14% but is estimated to be 30% for those aged between 15 and 29. The proportion of those out of work with degrees rose from 20% in 2000 to 55% in 2009. The number of graduates has increased across the region, with women outnumbering male graduates in several countries, including Tunisia.
70% of Algerians are under 30. Algeria needs to create 400,000 new jobs each year just to keep the unemployment rate level. Officially, unemployment is 10%, but for graduates it is 21.4%. Over a third of women graduates in Algeria are unemployed. Many young Algerians seek to escape to Europe.
Egypt has 80 million people of whom 40% live on or below the poverty level. Approximately 60% of the population are under 30 years old. Over a fifth of Egypt’s 15-29 year olds are unemployed. Egypt is the Middle East’s second biggest recipient of US aid after Israel. $1.3 billion is scheduled for 2011. Egypt’s complicity with the US is essential to imperialism.
Into this volatile situation the crisis of the world capitalist system has propelled food and fuel price rises, threatening not only the poor but the middle classes too. By summer 2010 food price inflation in the region reached 22%. In the year to January 2011 the world commodity food price index for corn rose by 52%, for wheat 49% and soya beans 28%. Oil prices have risen 27%. Food price rises have provoked protests in Tunisia, Morocco, Algeria, Jordan, Mozambique and Yemen. Droughts in Russia and Argentina and floods in Brazil and Australia have badly damaged crops. The use of soya beans and corn for bio-fuel has also harmed food supplies, but speculation in crops and land adds to the price rises.
As food prices increase so do land values; both attract speculation from financial parasites. Prudential, UBS, Rabobank, Macquarrie and a host of private equity firms have joined the business. ‘Jonathan Davis, Financial Times columnist and founding shareholder of Agrifirma Brazil, estimates it requires at least four years for managers to see a return on Brazilian land ...But it is possible to see an internal rate of return of 20% to 25%.’ (Financial Times 16 January 2011).
The region’s governments have increased subsidies in response to the Tunisian revolt. The Egyptian state spends $11.5bn a year on fuel subsidies and $2.3bn subsidising food. This is over 20% of government expenditure: more than is spent on education and health combined. The International Monetary Fund demands that subsidies be cut in exchange for loans; there could not be a more calculated provocation for rebellion.