Economics 101

Neither Gregory nor I are economists. My idea of economic analysis is “do I have enough money for cigarettes? (answer: usually no) But this morning I am going to channel my inner-Krugman and talk about a story that caught my eye.

It is one that doesn’t always do so- a story in the Yemen Timesabout the rising cost of beef in Yemen. It is easy, when reading about terrorism, insurgency, prisoner releases and government actions/lack of action/wildly confusing steps to glaze over something that seems so banal. I think that is a little dangerous, though, as these are the indices of daily life- a life that in Yemen is getting more difficult by the day.

According to the story, there are a number of reasons for the increase in cost, both natural (drought and epidemics, both of which are partly due to government negligence) and economic (farmers sell more meat abroad where they can get higher prices). This starts a dangerous cycle- as all of the Yemeni economy spirals downward, farmers are more likely to get the short-term gain of slaughtering young calves to sell for meat, before they can stud and replenish the herd. All of this reduces supply, jacking up prices.

As meat becomes more difficult to afford, people turn more to chicken, goat and fish. Unfortunately, in the short term, these are commodities whose supply is difficult to increase even as demand skyrockets, and this leads to escalating prices in these other staples (I told you this wasn’t a grad-level lecture in economics).

A good case study in the abstract, this is another sign that the basics of life a government guarantees in exchange for popular legitimacy are crumbling. As security slowly disintegrates and oil revenues dry up, the regime will be less and less able to provide any semblance of a decent life. This is exceedingly dangerous. The south is already on the verge of open revolt, for intermingled historic and economic reasons. Food shortages can only exacerbate that.

Also, extremely disturbingly, this will make it harder to buy salta, the ridiculously delicious witches’ brew of meat and spice that is a lunchtime staple and the perfect food to eat before a qat chew. Again, while this seems banal, the disruptions of life lead to disruptions in politics.

None of this is to use the occasionally true, but ultimately facile formula of “poverty = terrorism.” This is just to point out the signposts that is unchecked can, in hindsight, be the markers on the road from a fragile state to failed one.