DIAGNOSIS OF DOOM AND COMING APOCALYPSE
By Babatunde Jose
The latest IMF report is a diagnosis of calamity as it relates to the economies of the developed world, but most strident is its assessment for the emerging markets and the developing economies.
According to the world financial body, rising food and energy prices has given rise to global inflation which has been revised up. Inflation has also broadened in many economies, reflecting the impact of cost pressures from disrupted supply chains and historically tight labor markets.
The risks to the outlook are overwhelmingly tilted to the downside: This means that inflation could remain stubbornly high.
Tighter global financial conditions could induce a surge in debt distress in emerging market and developing economies. This is a danger that has been giving us a red signal in this climate of over-borrowing.
Rising food and energy prices could cause widespread food insecurity and social unrest and geopolitical fragmentation might impede global trade and cooperation. This too is becoming a reality and the bubble may burst anytime soon.
As advanced economies raise interest rates to fight inflation, financial conditions are tightening, especially for their emerging-market counterparts.
Where flexible exchange rates are insufficient to absorb external shocks, policymakers will need to be ready to implement foreign exchange interventions or capital flow management measures in a crisis scenario.
Such challenges come at a time when many countries lack fiscal space, with the share of low-income countries in or at high risk of debt distress. Higher borrowing costs, diminished credit flows, a stronger dollar and weaker growth will push them even more into suffering. We are experiencing these already. Every trader, from the meat seller to the plantain hawker, to the bread seller and the egg seller all complain about rising costs and the dollar.
The particularly difficult conditions in many African countries at this moment is important to consider. The effects of this, entirely exogenous, shock is pushing African economies to the brink. And it does not bode well for political stability. There is danger ahead and the ‘darkness is very visible’.
The effect of higher food prices is being felt acutely as food accounts for a higher share of income. Inflation, debt and balance of payments pressures are all intensifying. Most developing countries are now completely shut out from global financial markets; and unlike other regions they don’t have large domestic markets to turn to.
When it happens hunger might not be the immediate cause of the social upheaval but, taken along with other deep-rooted structural inequalities, it provides additional fuel for socio-political conflagration. This is equally true of our country today.
Research shows that unrest, even terrorism, can errupt in poor countries with a surplus of young people and not enough jobs. This is true of countries like Niger and Nigeria.
They say history always repeats itself – empires rise and fall, economies boom and burst.
When the French Assembly of Notables frustrated attempts by the royal government to fix the state fiscal crisis in 1788, because they did not want to pay taxes, these aristocrats did not intend to trigger the French Revolution, during which many of them ended up guillotined or exiled. Yet this is precisely what happened.
When the slave-owning elites of South Carolina declared their secession from the Federal Union in December 1860, they did not intend to trigger a bloody civil war that caused more than 600,000 deaths, killed one quarter of military-aged white Southerners, and resulted in the loss of most of their own wealth, when their slaves were freed. Yet this is precisely what happened.
Civil wars and revolutions are not predictable with scientific exactitude. They come with immediate and remote causes as we learnt in our history class.
One of the causes of revolutions is the falling or stagnating living standards of the general population. But contrary to the widely held view, popular discontent by itself is not a sufficient cause of a civil war or a revolution.
A more significant factor is what has been called “elite overproduction” – that is, the appearance of too many elite candidates vying for a limited supply of power positions within the government and the economy.
As written in the book, ‘War and Peace and War’ by Peter Turchin, elite overproduction results in intense intra-elite competition, polarization, and conflict that ultimately takes violent forms. This is exactly what is happening now as our elite are embroiled in a fight to finish in their struggle for political space. The masses are therefore the foot soldiers of the elite when they go to war. The elite will resort to tribal or ethnic sentiments, religious bigotry and other non-issue considerations, such as we are witnessing today.
Nobody could predict that Mohamed Bouazizi, a fruit vendor in Tunisia, would decide to publicly immolate himself. But this act of a desperate individual had huge consequences because the structural conditions in Tunisia were ripe for revolution. So also, were the structural conditions in other Arab countries that witnessed the Arab Spring that swept away the regime in Egypt.
Finally, the declining health of government finances, its inability to take advantage of rising international oil prices due to massive oil theft, skyrocketing petrol subsidy which remains a drain on the economy as well as foreign exchange (FX) speculation by currency traders, among others have combined to push the naira to a record low of N710/$1 on the parallel market, with debilitating consequences for the nation and a sure recipe for socio-political unrest.
Each of these trends has been noted and commented upon. But what is not broadly appreciated is that each did not develop in isolation; they are interconnected at a fundamental level.
An outbreak of political violence comparable to the French Revolution or American Civil War is not inevitable, or even unlikely. Nigerian society is not much more resilient than France of Ancien Régime. Still, we should not forget that antebellum America was also an imperfect democracy, like Nigeria of today.
If We might ask: What became of the protest movement of the past? And the leadership of the labor unions? The likes of Imodu, Adebola, Goodluck, ……………and even student leaders such as Chairman Mao of the University of Ibadan and Olu Adegboro of Ife? Why are there no leaders like them anymore? Is it that they have been compromised?
The underlying condition of the country makes it ripe for a revolution especially with the exogenous factors of worsening world economic climate. Coupled with the monumental mismanagement of the country and the intransigence of the bloated elite and their proclivity for self-aggrandizement.
ASUU has been on strike for over 5 months and the students’ union have not staged any earthshaking protest, North, East or South. No doubt they lack organization and strategy.
Analyst Mahmud Jega says the learning sector in Nigeria is abysmal. Jega laments that ASUU has cumulatively been on strike for 5 years since 1999, stating “basic and secondary education is probably in worse shape than tertiary education”, with the whole sector requiring an overhaul.
Yet the so-called private universities are graduating students. Even though, none of them can compare with our Ul, UNILAG, ABU, or Ife of 50 years ago in physical infrastructure, quality of lecturers and professors and the quality of student’s comfort. We lived 2 in a room in our hostels, with laundry service, room attendants who make our beds and clean the rooms; decent food in the cafeterias and free tea 24/7 with breakfast that include eggs(scrambled or Omelet) and sausages with ice-cream during lunch.
What happened?
How long does it take to cultivate a culture of protest? How many roads must a man walk down before you call him a man? . . The answer, my friend, is blowing in the wind. Apologies to Bob Dylan.
People in Sri Lanka did not wait until they started dying before they invaded the ‘Bastille’ of their President and sacked him, neither did they tarry a while before burning down the palace of their Prime Minister, even then the protest continue.
Tunisia is not having any of the palliatives being offered by their decadent ruler. Despite a referendum, they are still on the streets asking for change. Sudan is not different. The Republic of South Africa is in the throws of an imminent uprising, Chad is boiling, and Burkina Faso is a ticking bomb. Nigeria is over-ripe for seismic overhaul and the time is now!
What happened to our psych?
Oppressed people used to chant, ‘We shall overcome’ but, there is serious doubt If we can overcome, given our attitude to oppression and adversity.
Let me conclude by quoting Segun Adeniyi in his latest Intervention: “Here is a nation imbued with some of the most exceptional citizens with incredible world class talents from aerospace, cutting edge medicine to sports. Yet, despite a lack of preparation for anything, our talented citizens continue winning laurels to the utter astonishment of an embarrassingly incompetent officialdom. Here is a nation defined by a tragic mismatch between Africa’s most enlightened and refined civil society and one of the world’s worst performing states. Caught between the pride and optimism of our citizens and the tragedy of governmental failures, Nigeria is kept alive by the stubborn hope among the majority of our citizens that one day, bad times and atrocious leaders shall pass.”
*Barka Juma’at and a happy weekend*
