Will Mozambique riots sow global seeds of discontent?



Could Mozambique be the canary in the coal mine? Food riots in the southern African state, one of the world's poorest countries, suggest the global price protests of two years ago may be here again.

Over the past week Mozambican police have fought rioters using rubber bullets, batons and occasionally live ammunition. Protesters have used text-messaging to co-ordinate their actions, set up barricades of burning tyres and hurled rocks and bottles at police. At least 13 people have died as a result of the violence, authorities say. The protests were against the sudden leap, of up to 30 per cent, in the price of bread. With households spending three quarters of their incomes on food, the price rises have hit many people hard.

Mozambique is one of the world's poorest nations and most of its 22 million citizens live on less than US$3 (Dh11) a day. The country produces less than 5 per cent of its wheat consumption, relying on imports for the rest. Drought and fires in Russia that destroyed a quarter of its wheat crop and prompted a ban on exports that forced up world prices is being blamed as a direct cause of the crisis.

Whatever the reason, food riots are becoming increasingly common as prices rise above what many in the developing world can pay. In 2008, violent protests boiled around the developing world, from Haiti to Bangladesh to Egypt. Economists said record oil prices and the demand for biofuels, which resulted in arable land being diverted from food production to energy-producing grains, had much to do with it.

Today, the price of fuel is lower and the rampant inflation that drove price action has subsided. But for the poor in developing countries, little has changed. Any benefit from lower energy costs was wiped out by the global downturn, which resulted in fewer jobs. Franciscus Welirang, the chairman of the Flour Mills Association in Indonesia, warned last month Asia may be staring down the barrel of another food crisis if the surge in wheat prices sparked by Russia's export ban drove other staples higher. Indonesia is Asia's largest buyer of the grain.

"It's the end of cheap wheat," Mr Welirang told Bloomberg. The UN Food and Agricultural Organisation (FAO) says world food prices have climbed to their highest in two years, although they are still substantially below 2008 levels. Officially the FAO, based in Rome, has played down the unrest by saying global conditions are substantially different from 2008. But it is concerned enough to have called for a special meeting of global leaders to discuss the issue on September 24.

Anger over rising prices has also been noted in Egypt and Serbia. In Pakistan, where floods have destroyed a fifth of the country's crops, the prices of many food items have risen 15 per cent. The FAO warned in a recent report that food prices could rise as much as 40 per cent over the next decade. With more than 1 billion people worldwide regarded as living in poverty, the potential for civil strife is high.

Tragically, one of the main long-term drivers of food inflation is the improved economic fortunes of developing countries. As their economies have grown, often from the sale of commodities such as oil and metals, so has their demand for food. Mozambique is a case in point. Still listed among the world's least developed nations, it has managed economic growth of about 8 per cent over the past 10 years. This year it expects 6 per cent growth.

Much of this was the result of sales of commodities such as natural gas, coal and aluminium. With economic growth comes greater demand for food as the population grows and prospers. One saving grace has been that as Russia dries up, the US has been enjoying a bumper harvest. Food commodity prices will inevitably rise but greater supply could prevent a panic. business@thenational.ae

Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
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Tarek Kabrit, chief executive of Seez, and Imad Hammad, chief executive and co-founder of CarSwitch.com

If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Innotech Profile

Date started: 2013

Founder/CEO: Othman Al Mandhari

Based: Muscat, Oman

Sector: Additive manufacturing, 3D printing technologies

Size: 15 full-time employees

Stage: Seed stage and seeking Series A round of financing 

Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now. 

GOLF’S RAHMBO

- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)