Pandemic deepens fault lines in developing countries
From Tunisia and South Africa to Colombia, social unrest is sweeping through developing countries, a reminder of income inequalities thathavedeepenedduringthecovid-19crisis. While developed countries have deployed massive injections of fiscal and monetary stimulus to shelter economies and citizens since the pandemic began early last year, poorer nations lack the same firepower.
Riots, general strikes and anti-government demonstrations around the world increased by 244% over the last decade, according to the 2021 Global Peace Index. The nature of such unrest has changed, however: tensions increasingly stem from the economic blow of the pandemic. “Growing unease with lockdowns and rising economic uncertainty resulted in civil unrest increasing in 2020,” the authors of the latest index report wrote.
“The changing economic conditions in many nations increases the likelihood of political instability and violent demonstrations,” researchers noted, adding they recorded more than 5,000 pandemic-related violent events between January 2020 and April 2021. They expect little respite in the near-term. Disease outbreaks, from the bubonic plague in the Middle Ages to the 1918 Spanish flu pandemic, have shaped politics, subverted the social order and often caused unrest.
Epidemics reveal or worsen pre-existing fault lines; countries with more frequent and severe epidemics also experienced greater unrest on average, International Monetary Fund researchers found. A pandemic can suppress unrest in the early stages, IMF economist Philip Barrett found -- as witnessed in the last year, with the notable exceptions of Lebanon and the United States.
Thereafter the risk spikes — including heightened risk of a major political crisis that threatens to bring down a government and which typically occurs in the two years following a severe epidemic.
Tunisia, whose already weak economy has been further devastated by COVID-19, looks a prime example: President Kais Saied sacked the government on Sunday after months of protests, marking the biggest political crisis since the country’s 2011 revolution.
There are usually early warnings that risks are on the rise. Higher living costs stemming from reforms such as removing food and fuel subsidies usually contribute. Another factor often seen is the dismantling of mechanisms such as an independent judiciary, free press or freedom of assembly, all of which allow for peaceful dissent, said Miha Hribernik at risk consultancy Verisk Maplecroft.
The presence of large marginalized groups — political or religious — add to the mix.
Examples abound: a spat over a tiny metro ticket price hike sparked Chile’s 2019 protests, though deep grievances around income inequality were already simmering. In South Africa, deadly protests kicked off in July after the arrest of ex-president Jacob Zuma. But they were also likely to be a culmination of tensions caused by lockdown-induced job losses.
“The ‘spark’ that ignites protests is often the proverbial straw that breaks the camel’s back, and is impossible to predict,” said Hribernik.
Economicfalloutdependsondriversandcountryspecific circumstances. Protests linked to politics or elections often have a small impact — demonstrations after the 2012 election of Enrique Pena Nieto as Mexico’s president or Chile’s 2013 presidential vote had reduced GDP by 0.2 percentage points six months later, IMF researchers calculated.
But if the unrest is driven by socio-economic concerns, contractions tend to be sharper, the Fund said, citing the July 2019 Hong Kong protests or France’s ‘yellow vest’ unrest in 2018.
Weak institutions and limited policy space amplify the hit, meaning countries with weak pre-pandemic fundamentals will suffer the most should social discontent turn into unrest.
Stock markets in authoritarian countries suffer more during protests, falling 2% within three days of such an event and 4% in the following month, the IMF calculates.