Food drives global instability

Richard Parker is a former defense correspondent for Knight Ridder Newspapers and the former associate publisher of The New Republic. Kavi Williams contributed to this article.

The political change stirring in the Middle East portends a period of instability in the region and around the world. Globalization is proving how volatile it really is. The rapid growth of China and India - and their need for limited resources like food and oil - means pressure in poor and less developed areas like the Middle East and beyond.

The impetus behind the uproar in Egypt certainly has democratic elements, but it wouldn't have caught popular support were it not for the economic privation of the country. Talk of Twitter and Facebook aside, nearly 30 percent of the 80 million Egyptians are illiterate. Yet every single one of them has to eat, and before protests broke out, food prices rose steadily for seven straight months. The price of gasoline rose, too.

The countries in the Mideast now experiencing turmoil are, like Egypt, not the major oil exporters. They are instead the hangers-on among the regional economies: Tunisia, Algeria, Jordan and Yemen. After a protracted slump in oil prices following the 2008 recession, prices began a steep rise late last year because oil production was flat while demand for food - shipped around the world - rose.

The collision of food prices and oil prices is now rippling not just through the Middle East, but across the globe. A UN index of global food prices showed them jumping 25 percent worldwide in 2010. Much of that increase was fueled not just by crop failures, but by relentless demand from the growing Indian and Chinese economies.

Mubarak aside, the Egyptian regime, dominated by the military and including 10,000 ruling elites, isn't just going to surrender power to protesters in the street. The rising role of the military means its overt return to Egyptian politics, to maintain the stability of the regime it created in a 1952 coup. The military is an important institution in that society, providing upward mobility, and it maintains vast interests in the economy: in industry, agriculture and infrastructure. It will guard these interests.

Other regimes are likely to follow suit and negotiate protracted political transformations that ease pressure while preserving as much power as possible. This will, in turn, continue to inject risk into global oil prices. The risk in other areas of the Middle East, however, is that many lack strong institutions upon which to fall back during a transition, like Egypt's military.

Food prices for the poor in places like Egypt - and for everyone - are only likely to rise because of the inextricably intertwined global economy. One forecast predicts that China will import 8 million metric tons of corn, and that amount may nearly double by 2015. Despite daily fluctuations, crude oil may climb this year to $100 per barrel, Goldman Sachs predicted at the end of 2010, even before the fall of the Tunisian government or the Cairo protests.

What does this mean to Americans? The unpredictability and volatility of a globalized economic and political system will probably continue to threaten the normal and predictable course of events - as well as everyday life. Prices will rise, even as the economy struggles to lift itself into a real recovery, even as people struggle to find jobs. The poor around the world will find some conditions too much to continue to bear, and they will lash out.

Don't forget: The first 10 years of this century have been marked by turmoil. The global economic and political system has proved trickier to manage than anyone envisioned 20 years ago. The decade opened with the attacks of Sept. 11, ensuing global financial panic, American-led wars in Iraq and Afghanistan, slumping financial markets, oil price shocks, and finally the financial collapse and the 2008 recession.

It should come as no surprise, then, that at the annual meeting of the world's super-elites in Davos, Switzerland, last month, global instability emerged as the largest concern among bankers, politicians and business leaders. Not a one of them, or any leader anywhere, seems capable of taming this beast.