From the “pandemic” to the protests
Unrest and tension choke the developing world
Poverty and economic problems are among the most important causes of revolutions in developing countries.
AFP
The unrest in Tunisia is one manifestation of the deepening crisis.
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From Tunisia and South Africa to Colombia, social unrest is sweeping developing countries, a reminder of the income inequality that has exacerbated during the “Covid-19” crisis.
While developed countries have used massive financial and monetary incentives to protect their economies and citizens since the start of the “pandemic” early last year, poor countries do not have such capabilities.
The following points detail some of the causes and consequences of civil unrest throughout the developing world:
1- escalation of unrest
The 2021 Global Peace Index shows that around the world, riots, general strikes and anti-government demonstrations are 244% higher than in the previous decade.
The index, issued by the Institute for Economics and Peace, ranks more than 160 countries and territories, according to the extent of their peace.
However, the nature of these unrest has changed, as tensions are increasingly arising from the economic repercussions of the "pandemic".
"The growing pressure in light of restrictions and increasing economic uncertainty has led to an increase in civil unrest in 2020," the editors of the index's latest report said.
The researchers added that “changing economic conditions in many countries increase the likelihood of political unrest and violent demonstrations,” noting that they recorded more than 5,000 violent incidents related to the “pandemic” between January 2020 and April 2021. The researchers do not expect conditions to calm down significantly in the near future. .
2- The “pandemic” factor
From the Black or Bubonic Plague in the Middle Ages, to the Spanish Flu of 1918, pandemics have shaped policy shifts, disrupted social order, and often caused upheaval.
Epidemics expose or worsen pre-existing flaws. International Monetary Fund researchers have discovered that countries with more frequent and severe outbreaks of epidemics usually also experience more disruption.
And the IMF economist, Philip Barrett, said that it is possible that the “pandemic” will curb the turmoil in the early stages, as the world witnessed last year, with clear exceptions in Lebanon and the United States.
After that, the risk increases sharply, including the risk of a major political crisis, threatening to bring down a government, usually two years after a severe epidemic.
Tunisia, which "Covid-19" has severely damaged its economy, presents itself as a clear example of this. President Kais Saied dismissed the government last Sunday, after months of protests, in what represents the largest political crisis in the country since the 2011 revolution.
3- Sparks and driving factors
There are usually early warning signs that the risks are increasing.
Miha Hrebernik, of risk advisory firm Verisk Maplecroft, said the rising cost of living from reforms such as lifting food and fuel subsidies was usually a factor.
Another factor is the abandonment of such things as the independence of the judiciary, freedom of the press or freedom of assembly, all of which are mechanisms that allow for peaceful dissent.
The presence of large marginalized groups, whether political or social, increases the consequences of this mix.
The examples abound. A row over a metro fare increase sparked protests in Chile in 2019, even though people were already rife with severe complaints about income inequality.
In South Africa, deadly protests erupted in July after the arrest of former President Jacob Zuma, but it was also likely the culmination of tensions caused by job losses due to the interruption of economic activities due to the "pandemic".
"The spark that ignited the protests is often the famous straw that broke the camel's back, and it is impossible to predict it," Hrebernik said.
4- The impact of macroeconomic factors
The economic repercussions depend on the drivers and circumstances of each country. Oftentimes, political or election-related protests have little effect. Calculations by IMF researchers have shown that protests following the election of Enrique Peña Nieto as Mexico's president in 2012 or Chile's 2013 presidential election led to a 0.2 point drop in GDP. centigrade after six months. However, the Fund said that if the turmoil is driven by social and economic concerns, the downturn is often more severe, citing the Hong Kong protests in 2019 and the “yellow vest” unrest in France in 2018. The IMF estimates that the turmoil in these two cases reduced A full percentage point of GDP.
"The demonstrations resulting from a combination of socio-economic and political factors - in contrast to what we saw in Tunisia and Thailand earlier this year - have the greatest impact," said IMF's Motudij Haji Vaskov.
The repercussions are multiplied by weak institutions and limited policies, which means that countries that were built on weak foundations before the “pandemic” will suffer more than others if social discontent turns into unrest.
5- Implications for markets and policy-making
The International Monetary Fund estimates that stock markets in authoritarian countries suffer the most during protests, dropping 2% within three days of the outbreak, and 4% the following month.
Tunisia's dollar bonds plummeted after the recent political crisis, and the South African rand fell in the days following the protests that rocked the country, and the repercussions of the unrest in its ports went far beyond the country's borders.
Some governments choose to appease the protesters by distributing larger grants, but then face problems in financing the budget deficit.
This could lead to higher borrowing costs. Colombia, for example, saw its credit rating drop sharply, after sloppy tax reforms and protests.
In the opinion of the global head of emerging markets at Amundi, Yerlan Sijikov, that sometimes it is just a matter of government survival.
He said, "If we do not have social cohesion in a country, we should try to understand how the government intends to respond to that, or whether there is a political force interfering to implement the change."
• Researchers confirm that changing economic conditions increase the likelihood of political turmoil and violent demonstrations, noting that they recorded more than 5,000 violent incidents related to the “pandemic” between January 2020 and April 2021.
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