May 27, 2008
Blame It on Oil? No, Blame It on Bush
Aijaz Zaka Syed
Unlike English poet Alexander Pope — I lisped in numbers, for the numbers came — I suffer from a natural discomfort with numbers. Which is why one had to be more than dependent on one’s more calculating classmates when it came to mathematics. Even now I often fail to fathom the fundamentals of my modest monthly budget.
So while everybody who’s somebody holds forth on the perils of rising inflation and declining dollar (Emirati dirham, like other Gulf currencies, is handcuffed to the greenback), I can’t join the conversation thanks to my ineptitude with numbers. But even if one doesn’t understand the first thing about inflation and budgetary constraints we brown expats of subcontinental variety currently face in the Gulf, one constantly feels its effects.
Six years ago when I landed in Dubai, my weekly grocery bill used to range between 250 dirhams to 300 dirhams at Lulu, the neighborhood supermarket. Today, we feel blessed if we can keep it between 500 dirhams and 600 dirhams, even though my wife still checks the price tag and thinks twice before throwing anything in her trolley. The bag of Basmati rice that would be yours for 60 dirhams now costs you more than 110 dirhams. The humble “roti” that you’d get two for a dirham now costs the double. The monthly school fees for my children used to be well under 1,500 dirhams. These days, I have to write a check of 2,500 dirhams. These two being my biggest monthly expenses after housing, they are my budgetary benchmarks.
They also leave two huge holes in my pocket. And like so many other struggling expats, one finds the going increasingly tough. This despite the substantial pay rise most companies and governments have given their staff over the past couple of years.
I hate talking about my financial and domestic woes. And this is not a veiled appeal to my bosses for a raise either. But I am genuinely perplexed by the unparalleled rise in cost of living. If a guy like me who has a reasonably nice job with a big media organization finds the daily grind challenging, I wonder how people whose pay is less than what I shell out for my kids’ school fee or groceries manage?
A great deal has been said about the world food crisis. But it is not as if food and the staples like rice and wheat are scarcer today. They are not. They have only got too pricey. There is no shortage of food for those who can offer the right price. Supermarket shelves are still bursting with bags of rice and wheat flour. Only their prices have shot up — out of reach of less fortunate.
Some of our friends in the West, especially pundits like Thomas Friedman of New York Times, have been running a campaign against oil-producing countries — read Arabs and Muslims — blaming the high oil prices for the world’s economic woes.
The crude prices may be partly responsible for global economic problems. But have holier-than-thou wonks like Friedman ever wondered what is driving the oil prices?
It is the quirky dollar that is driving the oil. And why has the mighty dollar gone berserk? The people of Iraq and Afghanistan would tell you why. It is Bush’s disastrous wars that have broken the greenback’s back. And it is not just the luckless people of Iraq and Afghanistan who are paying for this cowboy president’s Oedipal insecurities. From the suicidal farmers in India to the hungry multitudes of Africa, all of us are paying for these wars.
There is strong evidence now to suggest that the shooting price of energy is a direct result of the wars in Afghanistan and Iraq and the accompanying geopolitical instability.
As if these two disastrous campaigns were not enough to drive nervous energy markets crazy, our neocon friends are pitching for a war with Iran.
Can you blame the markets then if they are getting jittery? After all, Iran is one of the world’s biggest producers of oil. And in case some of us fail to recall, Iraq, the main front of the neocon war, too was a big producer of oil. Under Saddam, it was the second largest producer after Saudi Arabia.
So is this a mere coincidence that the oil prices shot up soon after the US attack on Iraq? When Bush took the Americans, and the rest of us, into the morass called Mesopotamia, the crude was selling at about a quarter of what it is today. And look where we are today, at $129 a barrel.
If things continue in this fashion, top economic brains warn, before long the world could be looking at $200 a barrel. Imagine what it could do to multiply our current economic woes.
Even a layman like me can see that markets are sensitive to bad news and their short- and long-term effects. Especially when it is inspired by the US, the world’s biggest economy and the custodian of the international trade and financial system. And all Bush has done over the past seven years is bombard markets with bad news.
Oil prices began to climb after the invasions of Afghanistan and Iraq and have risen in tandem with the escalation of conflict and turbulence in the Middle East. There’s clearly a method in the madness. These wars are also contributing to the escalation of fuel cost and economic woes in indirect ways; by plunging the US ever deeper into debt and depreciating the dollar. The oil is largely priced in US dollars. And as the greenback’s value is eroded, oil-exporting countries demand more and more dollars for their produce.
Aside from pushing up oil and inflation, the war is also at the heart of the global food crisis. The prices of essential foodstuff and grains like rice and wheat have shot up because fuel prices have gone up; food production and its transportation are critically dependent on fuel.
The World Bank says food prices have more than doubled over the past three years. The price of rice, the staple for billions of Asians, is up 147 percent over the past year alone. The mounting food prices have caused hunger and riots across the Third World.
Maybe it is time for the Americans and the rest of the world to see that the disastrous consequences of Bush wars go beyond Iraq and Afghanistan. They have set the whole world on fire. And the first thing the Americans can do to put out the blaze is persuade the cowboy in the White House to bring the troops home.
— Aijaz Zaka Syed is a Dubai-based journalist and commentator.