We are experiencing a post-pandemic global inflation crisis that governments are struggling to bring under control. Indeed, the war in Ukraine has disrupted the steady flow of gas and agricultural commodities, which has markedly accentuated inflationary pressures. However, blaming the downturn of the global economy solely on the war in Ukraine is a strategy that is fast losing public support, particularly as the inflation crisis began before the invasion of Ukraine and calls to tackle the income inequality problem predate even the 2014 Russian annexation of Crimea. Is it possible that the inflation crisis was triggered by businesses attempting to recoup losses incurred during the pandemic? We believe so. Moving forward, the conflict between Ukraine and Russia will go on for a long time, but people other than the privileged ‘one percent’ need help now. In the previous post, ‘…A perfect insecurity storm…,’ we began our examination of the systemic implications of the global inflation crisis. In this article, we look at the spatially flexible nature of the inflation problem alongside a potential increase in violence and widespread social unrest as the crisis deepens.
Although the inflation crisis is global in scope, its effects are being felt differently from country to country. For instance, if your country is an oil and gas producer the price of energy might not have gone as high as in places like Europe. If your country produces enough food to cope in times of scarcity, you might not be suffering as much as in places in Africa. If the government of your country cares about keeping energy and basic food at affordable prices, you might not be affected as much as in places currently characterised by a Hobbesian ‘state or nature’ or aspiring to revive orthodox Keynesian economics like Lebanon and the United Kingdom. If your country has robust economic foundations, you might not endure as much hardship as in nations that were already experiencing soaring inflation prior to the current global crisis such as Turkey and Venezuela. It is also important to bear in mind that a single digit increase would affect many more people in poor countries like Bangladesh than in advanced economies like Denmark. Yet, if your country has run out of money like in Afghanistan and Sri Lanka; or being affected by country-wide adverse environmental conditions like in Pakistan and Somalia; or is totally or partially affected by protracted conflict like in Yemen and Ethiopia, then you need external financial support, as inflation is just another serious problem to add to the list; and so on. In other words, while the prices of energy, commodities and manufactured goods continue to go up, a multitude of cultural, economic, historical, political, and social factors influence people’s reactions to what is fast morphing into a more consequential ‘cost of living’ crisis.
How high will inflation go? Prices are currently increasing so frequently and capriciously that it is not possible to be precise. For reference purposes, the inflation rates for the countries listed above and below were as follows at the time this article was being written (unless stated otherwise, figures taken from the FT’s Global Inflation Tracker –July 2022 estimates): Afghanistan (4.30% in 2022, Trading Economics), Africa (estimated in April 2022 at 12.2% for Sub-Saharan Africa, World Bank), Bangladesh (7.5%), Denmark (8.7%), Ethiopia (33.5%), Eurozone (9.1% in the year to August 2022, Eurostat), Lebanon (168.4%), Pakistan (24.9%), Somalia (7.7%), Sri Lanka (66.7%), Turkey (79.6%), United Kingdom (10.1%; could hit 22.4% in 2023, Goldman Sachs warned in August 2022), Venezuela (137.1%), and Yemen (63.77% in 2021, Statista). What to expect in the near future is well summarized by the World Bank (Global Economic Prospects, June 2022):
‘Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely, with potentially destabilizing consequences for low- and middle-income economies. It’s a phenomenon—stagflation—that the world has not seen since the 1970s.’
Unlike the 1970s, however, the world is too interconnected now and over-dependent on stable transatlantic flows, and global economic growth is closely linked to unfaltering consumerism. In short, the economic situation is deeply concerning and likely to get worse. Therefore, we should expect a degree of convergence between the following violent trends regardless of where one lives.
Attacks on governmental buildings or public infrastructure: In July 2022, thousands of protesters stormed and occupied Sri Lanka’s presidential palace (66.7%), and in August 2022, protesters broke into the heavily fortified Baghdad’s Green Zone in Iraq (5.4%) and occupied the parliament building. In actuality, after the January 2021 storming of the United States Capitol (8.5%) by Donald Trump’s supporters, the bar was raised, and this course of action became a patent possibility anywhere in the world. Notwithstanding the reasons that motivated such actions were not linked to the global inflation crisis, precedents were set. There are reasons to suspect that similar tactics could be replicated elsewhere if people perceive that their governments are not doing enough to bring inflation down or combat rising prices. Against this backdrop, in July 2022 in South Africa (7.8%), the former President Thabo Mbeki issued a stark warning to the current president (and anyone) when arguing that “one of these days it’s going to happen to us, you can’t have so many people unemployed and poor, one day it is going to trigger an uprising.” Ultimately, whether social discontent escalates into uprising or not, government buildings remain natural and symbolic targets for people to ventilate their anger.
Physical violence against political figures: In recent years, a hate element or political or crime-related reasons have typically motivated violent attacks on political figures. The further deterioration of the economic situation might motivate violent attacks and even the assassination of government officials. In early July 2022, Shinzo Abe, the former prime minister of Japan (2.6%), was assassinated while speaking at an outdoor political event. The perpetrator of the attack used a rudimentary homemade gun. In early September 2022, in the middle of a crowd in Argentina (71%), a man pointed a handgun directly in the face of the controversial Argentinian Vice President Cristina Fernández de Kirchner. While the assassination of Abe and the failed attempt (the weapon jammed) on Fernández de Kirchner were not linked to the current crisis, similar incidents could become more commonplace. It does not take much, just motivation and willingness. Abe’s assassin had a “grudge” against him. Once it happens somewhere as a reaction to the cost of living crisis, expect copycat attempts elsewhere in the world.
Physical violence against members of the security forces: States’ security forces are already under attack throughout the world. Among a plethora of recent examples, early in September 2022 in Huma, Colombia (10.2%), seven police officers were shot dead in an ambush after the vehicle in which they were travelling hit a road mine. Early in June 2022 in the northern state of Nuevo Leon, in Mexico (8.2%), six police officers were killed and four injured after they were ambushed by drug gangs equipped with armored cars and heavy weaponry. By now, probably over 1,000 soldiers have died as a result of the ‘war’ against drug trafficking organizations launched in Mexico in 2006. In December 2021, three police officers were killed and half a dozen of their colleagues wounded after militants fired at a bus transporting security personnel in Indian-administered Kashmir (6.7%). While incidents like these happen with some regularity in parts of the world, they might intensify if the global economy continues to deteriorate. Police officers and soldiers are otherwise ordinary members of society, and just like anyone, affected by soaring inflation. Many of them are underpaid. However, their functions and close connection with authorities and state power can turn them into the focal point of people’s anger towards governments and their response to the cost of living crisis.
Physical violence against people during periods of unrest: From Belarus (18.1%) to Canada (8.3%), reports of police brutality or abuses of force are frequently covered by the news media. Early in September 2022 in Indonesia (4.7%), for example, six soldiers were arrested on suspicion of killing four Indigenous Papuans. The news cycle’s narrative flows in a piecemeal fashion somehow. Nevertheless, when events put thousands or millions of people within close proximity of large numbers of constabulary or military forces there is always the risk of situations going out of hand and civilians being wounded or killed. Without the need to go further afield, the 2022 storming of the parliament building in Iraq and the presidential palace in Sri Lanka resulted in civilian casualties. Human Rights Watch has extensively covered allegations against the police in Egypt (14.5%). In their “We Do Unreasonable Things Here” report they argued that ‘the Interior Ministry’s regular police and its National Security Agency have used widespread arbitrary arrests, enforced disappearances, and torture against perceived dissidents,’ with many of them arrested for allegedly participating in illegal protests. If prices continue to rise there will be protests resulting in confrontations between civilians and members of the security forces, with all the associated consequences including potential abuses of force.
Physical violence against high-profile CEOs: According to research by Climate Power, in what could be the ‘the most profitable quarter in the industry’s history’, oil and gas companies reported in excess of US$ 116 billion in profits for Q2 of 2022, on top of $93.3 billion in profits for Q1. They also returned about ‘$66.7 billion to their executives and wealthy shareholders through stock buybacks and dividend payments’. In contrast, the United Nations Development Programme reported that ‘soaring inflation rates have seen an increase in the number of poor people in developing countries by 71 million’ in Q2. Ordinary people are perfectly aware of this contradictory disparity. This is something that will not simply go away, as the gap will continue widening into 2023 at least. Among other trends, this issue will result in an increase of irregular migration flows, which will be a bonanza for human trafficking networks. In addition, this disparity could potentially motivate violent attacks on CEOs or high-ranking executives, particularly linked to the oil industry and the financial services sector. The home countries of the largest 20 oil companies are Brazil (10.1%), Canada (7.6%), China (2.7%), France (5.8%), the Netherlands (10.3%), Norway (6.8%), Russia (15.1%), Saudi Arabia (2.7%), UK (10.1%), and the U.S. (8.5%). Like Russian oligarchs, oil bosses in the West might need to start to be heavily protected. Perhaps aided by the public disclosure of their addresses or their activities, out of the playbook of hard-core activists or anarchists, we might witness assassination attempts or violent attacks on high-profile industry figures. Again, once it happens somewhere in the world, expect copycat attacks to follow elsewhere.
‘Robin Hood’ justice type of attacks on affluent people or symbolic economic targets: Sometimes analysts fail to identify this issue. Nevertheless, criminal trends commonly observed in developed nations start to take shape in less fortunate societies before they are labelled as emerging new trends. In view of this, acts of physical violence (e.g., aggravated burglaries, kidnaps, and robberies), perpetrated on the people perceived to be the more affluent members of society are likely to increase worldwide, and be normalised in locations that were not systematically affected by these strands of criminality before. Attacks on businesses are also part of this trend, e.g., cyber-attacks, burglaries, criminal damage of property, and demands for protection money. Common rationales externalised by the perpetrators of these types of crimes derive from distributive justice notions, though in reality that often does not seem to be the case. For instance, this is what many drug trafficking organizations or urban gangs say regarding some of their actions in places like Honduras (10.9%), Peru (8.4%), or Nigeria (19.6%), as well as in large cities across the world like Kinshasa in the Democratic Republic of Congo (5.5%) and Manila in the Philippines (6.4%). The wider prevalence of this phenomenon signifies that gradually criminals would start going down the food chain, subsequently targeting middle class people and then everyone. Consequently, as the economic situation continues to deteriorate, the population of wannabe Robin Hoods will be booming. On the other hand, some poor people might be left with no other alternative but to steal or migrate in order to survive
Intensification of gang violence and linked criminal activity: If you heard about a boy dying from stab wounds in a fight involving a large group of people armed with machetes, you would not immediately think about the United Kingdom. However, gang violence is becoming commonplace in the UK and this incident occurred in London in early September 2022. Gang activity has had a meteoric expansion over the last two decades in deprived corners of Latin America, Africa, and Asia as well as rich nations’ metropolitan areas. According to UN data, for example, in July 2022 in Haiti’s capital Port-au-Prince alone (16.8% in 2021, World Bank), over 200 people were killed because of gang violence. The correlation between gang activity and poverty (and lack of opportunities for young people) is well established. The mayor of London recently said: “I am concerned about a potential increase in violence … as the cost of living crisis deepens.” In the event of high inflation becoming a longer-term or persistent problem, conditions of protracted poverty and marginalization will result in significantly more young people joining gangs, which could engender a gang violence crisis here and there. Amplified by displays of wealth in social media, many of the affected young people will answer the call. Furthermore, UNDP reminded us in its 2021/2022 Human Development Report that an unfulfilled sense of belonging and inclusion puts ‘young people at risk of joining violent extremist groups.’
The wider normalisation of low-level crime: Anecdotal accounts and concerns raised by a variety of retailer associations corroborate that soaring inflation is giving birth to a whole new generation of first-time shoplifters. Shoplifting (theft from shops) is the most common crime in the U.S. (8.5%), and probably elsewhere with a market economy. According to RecFaces, one out of 11 Americans have committed the offense at some point. As the cost of living crisis worsens, the unfolding low-level crime wave is only likely to expand, globally, and cover a wider spectrum of offences including all forms of theft and more sophisticated cyber-enabled frauds. The latter is already a pain of modern life affecting practically everyone. Indeed, soon anyone could become a target for robbery upon leaving supermarkets with their regular shopping. Sometimes organized spontaneously and with word spread through social media, the flash ransacking of shopping precincts, warehouses, and trucks transporting goods also belong here. Among plenty of examples from the U.S., in November 2021 about 80 people ransacked a Nordstrom department store in the San Francisco Bay Area. In South Africa (7.8%) in July 2021, well over 200 shopping malls, supermarkets and warehouses were looted by angry mobs following protests that erupted after the imprisonment of former president Jacob Zuma. Similar scenes were observed in Nigeria (19.6%) the previous year after lockdowns. The siphoning off oil from pipelines by organised crime groups is already common in various countries such as Colombia (10.2%), Mexico (8.2%), and Russia (13.4% in 2022, July projection, Reuters). However, the point here is that incursions such as those just described could become widespread and common in a sizable proportion of countries where they were rare or occasional prior to the ongoing global inflation crisis.
The big unknowns: The intensification of the trends described above due to the deteriorating economic outlook, as well as the overlapping issue that these trends occur simultaneously and to different extents they feed one another, engender overarching dynamics that cannot be fully discerned at this stage. These are big unknowns, just like some of the consequences of the Covid-19 pandemic, for example, lockdowns and the home delivery of narcotics during them. In this light, the following selected points give food for thought:
- The mental wellbeing of millions of people was severely affected during the pandemic. At a time when these people should be recovering, an undetermined proportion of them are under extraordinary stress again because of the inflation crisis. Some of the worst affected people will intertwine the outlined trends with an impaired sense of rationality. How many of yesterday’s regular people will become tomorrow’s first-time criminals or maybe more?
- Besides other consequences of the conflict between Russia and Ukraine, the online school of radical resistance opened by the conflict is giving access to an abundance of material about how to engage potential adversaries in urban surroundings to a new generation of people. This information is being disseminated via conventional internet channels (not the dark web) and include the use of a wealth of over-the-counter implements and technologies. Moreover, there is also a fibre of extremism interlacing parts of the conflict that might enmesh other causes once foreign volunteers return home. To what extent these issues could amplify the trends noted above and combine to foster new ones?
- The political landscape in the U.S. remains heavily polarised and fragile. This has profound implications for the future of democracy worldwide. We are in the middle of economic, environmental, and security crises that will take time to fix. Can the liberal world order endure another attack on the United States Capitol (and democracy) without coming apart at the seams? We are slightly figurative here, but we are sure the reader gets the point.
- Ranging from capricious droughts (e.g., in Kenya, 8.5%, and Spain, 10.4%) or floods (e.g., in Bangladesh, 7.5%, and Pakistan, 27.2%) to the decimation of agricultural land and the mass displacement of people, the environmental disasters we have witnessed in 2022 will impact food production over the next seasons, adding inflationary pressure to the current crisis and further exacerbating insecurity. All things remaining equal, research from UNCCD forecasts that ‘by 2030, an estimated 700 million people will be at risk of being displaced by drought.’ How bad will it get if the uneven weather spell goes on for longer or becomes a permanent feature?
- Given the briefly described facets of insecurity altogether, what would happen if millions of people (not thousands as it is the case now) roughly at the same time abandon the worst affected areas and head for a better life in other countries or continents. What would the EU do if one day, finally, aspiring migrants overrun the Spanish enclaves in Morocco (7.7%) of Melilla and Ceuta? Can you persuade millions of people escaping poverty and conflict to turn back once this mass exodus has been set in motion? It would be incredibly difficult. Yet, we are fast reaching this boiling point.
What is particularly worrying about the current situation is that some governments are dealing with the high inflation and cost of living problem as business as usual, perhaps under the assumption that people will just get on and eventually forget about it. It seems that the views of some of these country leaders calcified in previous eras. However, the over-layering and overlapping interactions of waves of social disobedience, criminality, and patent discontent give rise to spatially amorphous uncertainties and threats that could bring humanity to a breaking point. We have tried to convey this sense of urgency in this article. If international concerted actions fail to reign in the global inflation and cost of living crisis soon, humanity will be heading to a disaster. Are you ready for a global revolution?