All entries for August 2021
August 25, 2021
Mexican mid–term elections in the context of institutional weaknesses and economic short–sightedness
(Image by Author)
Written by Fabian Tigges
On June 6, 2021, Mexico experienced the largest elections of the country’s history. According to the National Electoral Institute (INE), 93 million Mexicans were eligible to vote on governorships, a new lower house of Congress and thousands of mayoral and local legislator posts. While Mexico’s president Andrés Manuel Lopéz Obrador (known as AMLO) was not on the ballot, last week`s mid-term elections were largely a referendum on his policies and decisive for the remaining three years of his presidency. Central to the success of his term in office will be his ability to deliver on economic development, guiding Mexico out of the Coronavirus slump. So far, however, the Mexican president has been known for his intolerant and impulsive decision-making. Meanwhile, his illiberal populist policies have not only failed to deliver on made campaign promises, but threatened Mexican checks and balances. As the country has been plagued by years of short-sighted and non-inclusive economic development policy, AMLO’s style of politics is paradigmatic of Mexico’s failure to live-up to its economic potential. Instead of developing a long-term strategy, the Mexican president puts personal interests first, promoting a short-sighted and unsuccessful strategy to combat poverty, crime, and corruption.
In 2018, AMLO entered office with a landslide electoral victory, making populist promises to the poor, advocating an economic nationalist stance, and promoting a state-centred economic model. Three years into his presidency there is, however, no sign of economic development, as the Mexican economy stagnated at -0.06 per cent GDP growth in 2019, while suffering a devastating decrease of over 8 per cent in GDP growth in 2020 due to the Covid-19 pandemic. However, instead of investing into the education and health system to promote economic development and prospects for Mexico’s youth, AMLO has been cutting down on essential funds in research and development as well as in cultural and social institutions, arbitrarily redirecting the money to Mexico’s poor. For instance, rather than establishing targeted skill development, tutoring or entrepreneurship programmes, and attracting investment to create long-term job opportunities, the Mexican president implemented a programme of non-targeted and unconditional transfer payments to Mexico’s high percentage of youth not in employment, education or training (so called NiNis). Hence, rather than finding long-term solutions to the Mexican economy’s challenges, AMLO convinces his people with populist claims and short-sightedly treats symptoms of a sick economy, which brings in votes but does not provide development prospects for Mexico.
Judging on the first three years of AMLO’s presidency, he is about to join a group of former Mexican presidents – from different political camps – who failed to reach long-term economic growth and inclusive development in the country. Throughout the 1980s, Mexico experienced a drastic shift in economic policy away from a developmentalist approach towards economic liberalisation. In subsequent years, Mexico opened-up its economy, influenced by US-trained technocrats, following the playbook of the Washington Consensus. While in the short-term trade liberalisation had positive effects on increasing exports and FDI inflows, it failed to significantly improve long-term inclusive economic development in Mexico. Over the last two decades, universal access to education was established, yet, there are large regional differences in the quality of education and only half of students attend upper secondary education. In addition, the labour force participation rate for women is far below that of men, and low in comparison to other countries within the OECD as well as in Latin America. Meanwhile, total factor productivity has had no positive impact on overall economic growth, indicating extremely limited productivity growth in the Mexican economy. The consistently high rate of migration to the US can be interpreted as a symptom of the limited economic opportunities in Mexico. While AMLO explained the increasing number of migrants, referring to US president Biden's friendlier migration policies, the motivation of many Mexicans to cross the border rather lies in people’s dissatisfaction with the economic prospects in their home country and the hope for a better life.
Looking back at the mid-term election results, while the president’s ruling party Morena (National Regeneration Movement) has lost its supermajority in the lower house of Congress, it will hold on to power in coalition with the Labour Party and the Ecologist Green Party of Mexico. However, the ruling coalition falls short of a two thirds majority, thus, unable to make amendments to the constitution, which are necessary to push forward the president’s ambitious agenda. Yet, far more significant for the assessment of Mexican development and its state of democracy are the following numbers: since the beginning of campaigns in September 2020, the political risk consultancy firm Etellekt registered 100 assassinations of politicians, 36 of which were candidates, as well as over 900 acts of violence against politicians, ranging from verbal threats to kidnapping of and violent attacks on politicians and their family members. The violence is mainly motivated by drug cartels, seeking strategic power in local municipalities.
For decades, Mexican governments have struggled to put an end to organised crime and violence. Yet, insufficient economic opportunities in the formal economy and weak state institutions create patterns of incentives that strengthen the power of drug cartels. In addition, the ties of organised crime go deep into Mexican politics. In one of his morning press conferences, AMLO stated that there is no war on drug trafficking anymore. Unlike his predecessors, the Mexican president changed the strategy to tackle organised crime with “hugs not bullets”. In other words, he follows the approach of alleviating poverty and thereby diminishing the incentives to turn to drug groups in absence of state presence. Yet, his strategy lacks clear measures to directly address the power of organised crime in Mexico. On the contrary, instances like the bungled and brief capture of the son of Mexican drug boss “El Chapo” Guzmán in October 2019, or AMLO’s controversial handshake with Guzmán’s mother raise doubts about the Mexican president’s allegiance. In addition, various candidates of Morena are wanted in the United States. For instance, in the state of Guerrero, Félix Salgado Macedonio (Morena), the former candidate to the governorship and father of the new governor-elect, Evelyn Salgado (Morena), has been investigated for being involved in organised crime in the state’s largest city of Acapulco as well as on various accounts of violence and abuse. Despite these heavy allegations, AMLO defended Salgado. Furthermore, Mexico’s impunity rate of over 90 per cent gives drug cartels plenty of rope.
All in all, Mexico still has a way to go on the route to development, as it faces deep gender inequalities, significant deficiencies in the education system and lacking economic perspectives for its youth. Changing governments have not allowed for continuity and a long-term strategy in economic development that is focused on creating economic opportunities for its people. Meanwhile, the influential position Mexican drug cartels hold in politics and society is incentivised through patterns of corruption and impunity, and lies at the root of Mexico’s problems. Yet, instead of fighting the power of drug cartels through strengthening state institutions and the rule of law, the ties of organised crime go deep into the ruling party’s members.
Fabian Tigges is a Postgraduate student of International Political Economy at the University of Warwick and of Politics and Public Administration at the University of Konstanz. His MA dissertation was titled “From Austerity to Recovery Spending: Contemporary Economic Thought in Times of Crisis”. Since October 2020, he is an executive board member of the Warwick Global Development Society (WGDS). He is also a student Research Assistant at the chair of Political Science and International Politics of the University of Konstanz.
August 17, 2021
‘Global Food Prices are Already Higher than for Most of Modern History’
Written by Alastair Smith
The Theory of Civilisational Collapse
Extinction and Rebellion, the global Climate Emergency campaign network, believe that Global Heating and associated Climate Breakdown has already locked in a likely “Social Collapse” (Reed 2020; Hallam 2019). To understand the potential for this, leading speakers such as Rodger Hallam argue, look at the failed state of Somalia (2019).
Potential pathways for such an unravelling of so-called “civilisation” include the collapse of asset prices for coastal property and the “fiscal crisis of the state”: the scenario in which ecologically catalysed recession is so deep, that the legitimacy of government evaporates as its capacity to fund welfare amid deep inequality is neutralised, and the poor cannot afford food (Hallam 2019). Based on their academic research and scholarship, Rupert Reed, Professor of Philosophy at the University of East Anglia, and Rodger Hallam, previously a researcher at King’s Collage London, also outline that we know exactly what happens to social stability when poor people lack food: they understandably secure their livelihoods in any way they can (Hallam 2019).
The ultimate end, Hallam (2019) suggests in talks given across the UK, is war. This might be across borders as hungry migrants move on scales the world has never seen (MPI 2020); it might be through internal conflict as citizens riot for food, facing little resistance where a police force and military have gone unpaid for long enough. If there is one robust law of social science, it is the one promulgated decades ago: revolutions happen when the masses go hungry (Risbridger 2018).
The Limits of Public Knowledge
For many, the sort of dystopian or apocalyptic visioning promoted by Extinction and Rebellion is inappropriate. Critiques refer to the fallacy of such a Malthusian’esk and neo-Malthusian theory that predicts significant social fallout when food demand outstrips food production. Commentators who prefer to celebrate the gains of human development, highlight that humanity has always triumphed in difficult times: “adversity is the mother of invention”, or so goes the often used, yet little reflected on saying of convenience.
Indeed, this is a privileged defence given that:
“The [UN’s] latest edition of the State of Food Security and Nutrition in the World…estimates that almost 690 million people went hungry in 2019 - up by 10 million from 2018, and by nearly 60 million in five years. High costs and low affordability also mean billions cannot eat healthily or nutritiously”(FAO 2020).
Not only has the frequency of malnutrition grown in recent years, much of the most intensive nutritional deprivation is also inextricably interconnected with violent conflict (GAIN 2020). The causation between food availability and violence is of course complex, but only those with the fortune not to experience this nexus for themselves have the privilege to dismiss its relevance out of hand.
Moreover, the vast majority of the world has failed to notice a dual indictment of the current nature of human “progress through innovation”: that illustrated by the role of information, knowledge and education, a much-praised characteristic of democratic organisation and widely hailed as part of the “white” Northern world’s defence against social collapse.
Empirical Realities of Food Markets in 2021
As part of my scholarship for research-led teaching on food, security, sovereignty and sustainability, I have paid constant attention to the United Nation’s Food and Agriculture Organisation’s (FAO) regular reports on crop production, consumption and stocks, as well as their individual and collective prices (FAO various). In classes, I have elicited students’ current knowledge of food dynamics before challenging them with the more accurate realties. As part of this exercise, those learners thinking of themselves as well-informed find most headlines and graphical representations rather unsurprising.
To take a few examples of the insights we all might find familiar:
- “As more go hungry and malnutrition persists, achieving Zero Hunger by 2030 in doubt, UN report warns” (FAO 2020).
- “Prices are at the highest since 2014, risking faster inflation” (Bloomberg, May 2021).
- “Global food prices rise for 10th month in a row (April ReliefWeb 2021)”.
- “Most food commodity prices are gaining momentum as end-2020 approaches” (World Bank 2020).
Since I started writing this blog, some analysis has started to become more pertinent, with the more accurate soundbites that:
- “UN: Cost of food rises at fastest pace in over a decade” (BBC 2021)
- “Global food prices post biggest jump in decade” (Financial Times 2021)
- “Global Food Prices Keep Rising…The May figure is the highest of any month in almost ten years”.
Sadly, while more precise than previous accounts, this messaging still misses the simple statistical observation that obliterates the relevance of this coverage. Reviewing the “real” price of food over time – expressed as an index relative to a base year, rather than the nominal value in currency, which makes comparison harder due to inflation – the only relevant way to capture today’s status of global food prices is to say that:
‘It is on average harder to buy food today in 2021, than it has been since 2012, and in fact for most of the noughties, the entire decade of the 1990s, andthe 1980s; mostof the 1970s, and every year of the 1960s! Food is more expensive today than it has been for most of the modern recorded history’.
Even though the FAO has not coined this summary, its own graphic representations show the gravity of our current reality. While the FAO’s version can be seen at the bottom of their recent webpage (2021), below is my most recent reproduction, as I share with my students. Here the graph shows the most recent 2021price index calculation in blue, thus allowing easy visual comparison with the historical trend, shown in grey.
Here we see that apart from the food price crisis of 2012, and the oil price crisis of the 1970s, today’s real costs of buying food are higher than almost the entire period since records began in 1961. This also means that the real price is also now higher than in 2010, when food shortages and interrelated price crisis gave rise to what the European media labelled as the “Arab Spring”, in which multiple North African governments were overthrown (Zurayk 2011).
Beyond this, knowledge creators and distributors have been fixated on COVID as the reason for recent price increases. This is again as well illustrated by a Google search for information, which returns summaries such as:
“Global food commodity prices in a post-COVID world” (World Bank 2020)
“The prices of raw materials that go into morning staples have surged since the start of the pandemic” (FT May 2021).
It is certainly true that COVID has disrupted global food supply (Loborde et al 2020), however, this framing disregards a much more prominent theme, identified by FAO crop reports that provide explanations about the dynamics of supply and demand. For the most part, these regular briefings are written in fairly technically and arguably obscurantist language: here you’ll find expressions that attribute price rises to “increasingly tight global supply with lower-than-earlier-expected production and stock estimates…”.
However, when you move past these broad expressions you find others that explain the problems of food production: “Concerns over dryness in South America” (FAO 2021), “owing to poor weather conditions that curtailed yields” (2021a), “continued dry weather has partially curbed prospects, and field reports confirm inferior crop conditions compared to the average” (2021a). Put simply, one of the most prominent themes in FAO analysis has been the unpredictability of weather and the manifest inability of technology to full mitigate for this.
It is of course important not to be alarmist. This analysis is not sufficient to conclude that unpredicted weather results from climate breakdown, which is already undermining our collective ability to produce enough food. It is true that in recent years declining supply of some key commodities - such as cereals that provide nutrition for c.50% of the human species – has been outstripped by growing demand, therefore literally eating into global buffer stocks. However, buffer stocks do exist for this very purpose and there will always be periods of over demand: the situation remains stable because supply is sufficient to meet needs over the longer term.
What this empirical reality does clearly demonstrate however, is that when weather is hard to predict, for example where long-term climate patterns change, and continue to change as is increasingly predicted by leaked updated IPCC consensus science (Harvey 2021), producing enough food to feed a growing population will be increasingly challenging.
In summary, five overall conclusions emerge:
- It is indisputably now harder to buy food in 2021, than it has been for most of modern history, and this should be reflected in headlines and sound bites. Moreover, malnutrition is growing not declining, and many of the most severe situations are interlinked with violent conflict. This is a damming indictment of the much-celebrated human potential.
- Climate breakdown will continue for decades irrespective of any actions taken now or soon, and there is evidenced risk to our food systems and supply will be compromised in the future. It is likely that buffer stocks will be consumed, and prices will rise, therefore excluding more and more of the world’s poorest people, creating a context for local and international social instability (FAO 2020).
- The end of “civilisation”, if and when it comes, very likely involves food riots and conflicts of a significant magnitude; a situation potentially catalysed by global pandemic (Bostrom & Cirkovic 2011). We will only know which crisis will be the last when it’s far too late to act.
- Minimising further climate breakdown is an essential risk management strategy to avoid risks to our food system, and everyone has the responsibility to pressure for radical changes by those meeting at the Conference of the Paris (COP) 26 event in Glasgow this year.
- Finally, we like to think we know about the Climate Emergency and its impact on our lives. However, the institutions we trust to provide appropriate information do not always tell us the whole story. Look past the headlines and the received opinion: your ability to see social collapse before it arrives might well depend on it.
Alastair Smith is a Senior Teaching Fellow, in Global Sustainable Development, University of Warwick and Academic Lead for the Food Global Research Priority.