We are now seeing firsthand the economic roots of revolution. What's happening in Egypt now is a warning for all governments around the world.
Slate Magazine points out that food prices in Egypt have been rising and a Credit Suisse analysis has found that Egyptians spend more on food than respondents in any other emerging economy – about 40 percent of their monthly income, versus about 17 percent for Brazilians and about 20 percent for Chinese and Saudi Arabians. Some of the price rises are being driven by speculators betting on commodities but most of it is the result of globalization with recent droughts in Russia, floods in Australia and Pakistan, and increased production of crops for ethanol and other biofuels, rather than food. Add to that the demand for food commodities climbing in big and fast-growing countries like India and China, and rising oil prices.
Egypt is important for world peace and the global economy. As explained in the Huffington Post, Egypt matters because it is a major power broker in the region and helped bring the Israelis and Palestinians into some sort of peace agreement. Egypt is also critical for the global economy. Oil prices have already jumped due to fears over access to the Suez Canal.
As I point out in my column today, the global food crisis is threatening the world in more ways than one. As food prices continue to soar, and as more shortages start to appear, Egypt could be just the beginning.
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