Like a globe-spanning tornado that touches down with little predictability, deep economic concerns leave a trail of political unrest and violence in poor and rich countries.
In Kenya, a nation reeling under debt, protests over a proposed tax hike last week resulted in dozens of deaths, the kidnapping of protesters and a partially burned Parliament.
Meanwhile in Bolivia, where residents have lined up for natural gas because of shortages, a military general led a failed coup attempt, saying the president, a former economist, must “stop impoverishing our country”, shortly before an armored truck hit. the presidential palace.
And in France, after months of roadblocks by farmers angry over low wages and rising costs, the far-right party rallied in the first round of early parliamentary elections on Sunday, bringing its long-taboo brand of nationalist and anti-immigrant politics to the doorstep. of power.
The causes, context and conditions underlying these disorders vary greatly from country to country. But a common thread is clear: rising inequality, declining purchasing power and growing concern that the next generation will be worse off than this one.
The result is that citizens in many countries facing a bleak economic outlook have lost faith in their governments’ ability to cope — and are fighting back.
The backlash has often targeted liberal democracy and democratic capitalism, with populist movements springing up on both the left and the right. “An economic malaise and a political malaise feed off each other,” said Nouriel Roubini, an economist at New York University.
In recent months, financial fears have sparked protests around the world that have sometimes turned violent, including in high-income countries with stable economies like Poland and Belgium, as well as those struggling with unmanageable debt, such as Argentina, the Pakistan. , Tunisia, Angola and Sri Lanka.
On Friday, Sri Lankan President Ranil Wickremesinghe pointed to Kenya and warned: “If we do not establish economic stability in Sri Lanka, we could face similar turmoil.”
Even in the United States, where the economy has proven resilient, economic worries are partly behind the potential return of Donald J. Trump, who has often adopted authoritarian rhetoric. In a recent poll, the largest percentage of American voters said the economy was the most important issue in the election.
National elections in more than 60 countries this year have focused attention on the political process, inviting citizens to voice their discontent.
Economic problems always have political consequences. But economists and analysts say a chain of events started by the Covid-19 pandemic created an acute economic crisis in many parts of the world, setting the stage for the civil unrest now blooming.
The pandemic halted trade, wiped out incomes and created supply chain chaos that caused shortages of everything from semiconductors to sneakers. Later, as life returned to normal, factories and retailers were unable to meet the reduced demand, driving up prices.
Russia’s invasion of Ukraine added another jolt, sending oil, gas, fertilizer and food prices into the stratosphere.
Central banks tried to contain inflation by raising interest rates, which in turn further squeezed businesses and families.
While inflation has subsided, the damage has been done. Prices remain high and in some places, the cost of bread, eggs, cooking oil and home heating is two, three or even four times higher than a few years ago.
As usual, the poorest and most vulnerable countries were hit hardest. Governments already strangled by loans they could not afford saw the cost of this debt balloon as interest rates rose. In Africa, half the population lives in nations that spend more on interest payments than on health or education.
This has left many countries desperate for solutions. Indermit Gill, chief economist at the World Bank, said nations unable to borrow due to debt crises essentially had two ways to pay their bills: print money or raise taxes. “One leads to inflation,” he said. “The other leads to unrest.”
After paying off a $2 billion bond in June, Kenya tried to raise taxes. Then things boiled over.
Thousands of protesters stormed Parliament in Nairobi. At least 39 people were killed and 300 injured in clashes with police, according to rights groups. The following day, President William Ruto withdrew the proposed bill that included tax increases.
In Sri Lanka, stuck under $37 billion in debt, “the people are just devastated,” said Jayati Ghosh, an economist at the University of Massachusetts Amherst, after a recent visit to the capital, Colombo. Families are skipping meals, parents can’t afford school fees or medical coverage, and a million people lost access to electricity last year because of unaffordable rate hikes and taxes, he said. Police used tear gas and water cannons to disperse the protests.
In Pakistan, the rising cost of flour and electricity has sparked a wave of protests that began in Kashmir and spread this week to almost all major cities. Traders closed their shops on Monday, blocking roads and burning electricity bills.
“We can no longer bear the burden of these inflated electricity bills and rising taxes,” said Ahmad Chauhan, a pharmaceutical vendor in Lahore. “Our businesses are suffering and we have no choice but to protest.”
Pakistan is deeply in debt to a host of international creditors and wants to increase tax revenue by 40 percent to try to win a bailout of up to $8 billion from the International Monetary Fund – the lender of last resort – to avoid the default.
No country has a larger IMF loan program than Argentina: $44 billion. Decades of economic mismanagement by a succession of Argentine leaders, including printing money to pay bills, has made inflation a constant battle. Prices have nearly quadrupled this year compared to 2023. Argentines are now using US dollars instead of Argentine pesos for big purchases like houses, keeping stacks of $100 bills in jackets or bras.
The economic turmoil led voters in November to elect Javier Millay, a self-styled “anarcho-capitalist” who promised to cut government spending, as president. It has cut thousands of jobs, slashed wages and frozen infrastructure projects, imposing austerity measures that go beyond even those sought by the IMF in its efforts to help the country fix its finances. In its first six months, poverty rates have skyrocketed.
Many Argentinians are fighting back. Nationwide strikes have shut down businesses and canceled flights, while protests have blocked plazas in Buenos Aires. Last month, at a demonstration outside Argentina’s Congress, some protesters threw stones or set cars on fire. Police responded with rubber bullets and tear gas. Several opposition MPs were injured in the clashes.
Martin Guzmán, Argentina’s former economy minister, said that when national leaders restructure overwhelming public debt, the deals weigh more heavily on people whose pensions are cut and taxes are raised. That’s why he pushed for a law in 2022 that would require Argentina’s elected Congress to approve any future deals with the IMF
“There is a problem of representation and resentment,” Mr. Guzman said. “This is a combination that leads to social unrest.”
Even the richest countries in the world are seething with frustration. European farmers, worried about their prospects, are angry that the costs of new environmental regulations aimed at preventing climate change are threatening their livelihoods.
Overall, Europeans have felt that their wages don’t go as far as they used to. Inflation reached nearly 11 percent sometime in 2022, eroding incomes. Around a third of people in the European Union believe their standard of living will fall over the next five years, according to a recent survey.
This year, protests have broken out in Greece, Portugal, Belgium and Germany. Outside Berlin in March, farmers spread manure on a highway, causing several accidents. In France, they burned hay, threw manure at Nice City Hall and hung the carcass of a wild boar outside a labor inspection office in Agen.
As the head of France’s farmers’ union told the New York Times: “It’s the end of the world versus the end of the month.”
Economic concerns intensify divisions between rural and urban dwellers, unskilled and university-educated workers, religious traditionalists and secularists. In France, Italy, Germany and Sweden, far-right politicians have exploited this discontent to advance nationalist, anti-immigrant agendas.
And growth is slowing globally, making it harder to find solutions.
“Terrible things happen even in countries where there are no protests,” said Ms. Goss, an economist at the University of Massachusetts at Amherst, “but the protests kind of wake everyone up.”
Zia ur-Rehman contributed reporting from Karachi, Pakistan.
