Fuel Costs in West Africa and the Global Food Crisis

I wrote from Ivory Coast last week of the public strike against higher fuel costs. Abidjan, the country’s economic center, was shut down. Young people set up roadblocks and had to be dispersed by police.

An article this morning from Reuters offers a glimpse of the social impact of higher fuel prices. They are economically oppressive and socially destabilizing.

We experienced the chaos in a milder form. When we went to check out of our rooms preparing to leave for the airport we were told airport workers were on strike and no planes were flying. Hotel guests gathered in the lobby swapping bits of information and offering advice to each other.

We reserved rooms for the night and began a frantic search for alternatives, calling travel agents, local people who might know more, and conferring with others in the hotel. Prospects looked bleak. We might be stranded for the duration of the strike. We called home to break the news. Not a happy task.

Then a call came from a local contact who said he learned the plane we were booked on would be allowed to land and take off. Go to the airport.

We gathered our bags and rushed off, to the chagrin of the hotel staff who smiled and said they’d see us soon, assuming we would be back shortly.

At the airport, however, people stood at the arrival gates awaiting debarking passengers and we skimmed through security, ticketing and passport control in record time. No waiting because the rumor had kept everyone away.

To our surprise the airport was operating normally. Planes were landing and taking off. Our plane sat at the gate and at the appointed time we were boarded and we departed. I still don’t know if the strike was quashed, fell apart or was a rumor.

However, cost of living is an issue. Fuel costs have driven up prices not only for fuel but for food and other goods and services, including public buses and taxis. Pocketbooks already stretched are now being emptied. Many lucky enough to have a  job can’t earn enough to get to work and buy food. As one taxi driver told the Reuters reporter, he is working to pay for fuel.

In a developing economy price increases don’t ripple through and eventually get absorbed, they rip through tearing a hole in the pockets of people who are already barely able to survive. And that’s a much more significant reality than the inconvenience of travel for folks like me. Per capita income in Côte d’Ivoire is $587 U.S.

Yesterday Exxon announced record profits, earning $1,500 a second, $11.7 billion for the quarter, record profit for a corporation. And still, it wasn’t enough for Wall Street. Exxon shares dropped and the LA Times actually opined we in the U.S. should be grateful for the company’s staggering profits because the pain of higher gasoline prices is driving the search for alternatives, and, of course, the editors think it’s bad policy to tax excessive profits. Bad for the corporation.

A more useful discussion of food and trade policy is here.

However, I wonder if that means it’s good policy to let the poorest of Africa and elsewhere walk and eat dirt, because that’s what’s happening. The global food crisis is, in part, borne by global fuel costs and for some it’s not a mere inconvenience.

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