Like a globe-spanning tornado that touches down with little predictability, deep economic anxieties are leaving a trail of political turmoil and violence across poor and rich countries alike.
In Kenya, a nation buckling under debt, protests over a proposed tax increase last week resulted in dozens of deaths, abductions of demonstrators and a partially scorched parliament.
At the same time in Bolivia, where residents have lined up for gas because of shortages, a military general led a failed coup attempt, saying the president, a former economist, must “stop impoverishing our country,” just before an armored truck rammed into the presidential palace.
And in France, after months of road blockades by farmers angry over low wages and rising costs, the far-right party surged in support in the first round of snap parliamentary elections Sunday, bringing its long-taboo brand of nationalist and anti-immigrant politics to the threshold of power.
The causes, context and conditions underlying these disruptions vary widely from country to country. But a common thread is clear: rising inequality, diminished purchasing power and growing anxiety that the next generation will be worse off than this one.
The result is that citizens in many countries who face a grim economic outlook have lost faith in the ability of their governments to cope — and are striking back.
The backlash has often targeted liberal democracy and democratic capitalism, with populist movements springing up on both the left and right. “An economic malaise and a political malaise are feeding each other,” said Nouriel Roubini, an economist at New York University.
In recent months, economic fears have set off protests around the world that have sometimes turned violent, including in high-income countries with stable economies like Poland and Belgium, as well as those struggling with out-of-control debt, like Argentina, Pakistan, Tunisia, Angola and Sri Lanka.
On Friday, Sri Lanka’s president, Ranil Wickremesinghe, pointed to Kenya and warned: “If we do not establish economic stability in Sri Lanka, we could face similar unrest.”
Even in the United States, where the economy has proved resilient, economic anxieties are partly behind the potential return of Donald Trump, who has frequently adopted authoritarian rhetoric. In a recent poll, the largest share of American voters said that the economy was the election’s most important issue.
National elections in more than 60 countries this year have focused attention on the political process, inviting citizens to express their discontent.
Economic problems always have political consequences. Yet economists and analysts say that a chain of events set off by the COVID-19 pandemic created an acute economic crisis in many parts of the planet, laying the groundwork for the civil unrest that is blooming now.
As usual, the poorest and most vulnerable countries were slammed the hardest. Governments already strangled by loans they couldn’t afford saw the cost of that debt balloon with the rise in interest rates. In Africa, half of the population lives in nations that spend more on interest payments than they do on health or education.
That has left many countries desperate for solutions. Indermit Gill, chief economist at the World Bank, said that nations unable to borrow because of a debt crisis have essentially two ways to pay their bills: printing money or raising taxes. “One leads to inflation,” he said, “the other leads to unrest.”
After paying off a $2 billion bond in June, Kenya sought to raise taxes. Then things boiled over.
Thousands of protesters swarmed the parliament in Nairobi. At least 39 people were killed and 300 injured in clashes with police, according to rights groups. The next day, President William Ruto withdrew the proposed bill that included tax increases.
In Sri Lanka, stuck under $37 billion in debt, “the people are just broken,” said Jayati Ghosh, an economist at the University of Massachusetts Amherst, after a recent visit to the capital city of Colombo. Families are skipping meals, parents cannot afford school fees or medical coverage, and 1 million people have lost access to electricity over the past year because of unaffordable price and tax increases, she said. Police have used tear gas and water cannons to disperse protests.
In Pakistan, the rising costs of flour and electricity set off a wave of demonstrations that started in Kashmir and spread this week to nearly every major city. Traders closed their shops Monday, blocking roads and burning electricity bills.
“We cannot bear the burden of these inflated electricity bills and the hike in taxes any longer,” said Ahmad Chauhan, a pharmaceuticals seller.
(New York Times)
