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If governments are powerless to curb inflation, who is actually controlling the economy?

December 21, 2022 at 10:04 am

A Syrian buys food in a grill shop in Gaziantep [OZAN KOSE/AFP via Getty Images]

There is, by any standard, a terrifying phenomenon to which nobody is paying much attention; not even the media is making us aware of the potentially awful consequences. This phenomenon has appeared little by little in many countries, especially in the Arab world and the so-called Third World in general. I’m talking about unprecedented inflation, even in the rich West. While salaries are usually fixed and limited, soaring prices seem to have no limit.

What is happening? What do those manipulating economies and wealth actually want? And who are they?

We used to mock the “golden billion” conspiracy theory, but to be honest, if the living conditions around the world continue in this way, we cannot rule out famine anywhere and everywhere, including the West. This will, of course, reduce the global population considerably. Down to a billion, perhaps?

Take Syria as an example, where salaries are usually no more than 100,000 lira ($40) a month. This looks a lot compared with the average salary a few decades ago, when it was just 1,000 lira ($4). The big difference is that back then 1,000 liras could house and feed an entire family. Now, 100,000 liras can just about pay for a small cooking gas canister. An ordinary Syrian today needs over 1.5 million liras a month to live on. What should they do?

A few days ago, some well-known Syrian actors urged President Bashar Al-Assad to intervene because the situation has become hellish and they are going hungry. If this is the situation of artists and actors, then what is it like for the working class? It is unbelievably horrible. There is no solution. Even if the state could raise salaries to 1.5 million liras so that people can live with just enough — and it can’t — prices will simply soar higher, putting everyone in an uncontrollably vicious downward spiral.

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Of course, Syria is not the ideal example for this because the war has destroyed everything and it is suffering from financial, agricultural and economic disaster. It might be able to recover and get back to some sort of normality, as has happened in other countries. However, there are other Arab and non-Arab countries that have started to exhibit the same sort of economic symptoms as Syria, even though they have not been embroiled in war and have not suffered the way Syria has.

In Egypt, for example, the currency has fallen in value dramatically, and Egyptians talk about nothing else but keeping up with inflation. Some prices have increased by 100 per cent; how are employees supposed to match this? Where will they get salaries able to secure them even the basic necessities of life? As in Syria, if the state pushes salaries up, prices will rise in tandem. It’s that vicious spiral again. There is no solution.

The people in Tunisia are suffering in the same way. They are facing insane price rises, unprecedented inflation and limited income levels that cannot increase because the state is unable to secure enough money to bridge the gap.

Is the situation any different in Sudan, Lebanon, Jordan, Algeria, Morocco or any other Arab country? Some may be better off than, say, Yemen, Lebanon and Sudan, but no one is talking about any of them. The Lebanese currency has plummeted in value month by month, so much so that many citizens rely on food parcels left by the wealthy few on an ad hoc basis. It is hard to imagine that hunger is a major issue in Lebanon. It was once known as the “Switzerland of the Middle East”, remember?

Over in the Gulf, the states benefit from the rise in oil prices, but they are also suffering from rampant inflation, with prices doubling while salaries remain constant. Even there, many people work just to cover their basic essentials, and the situation gets worse every day.

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The issue is not limited to the Arab countries. Turkiye has been facing massive inflation for years. Salaries which were worth $2,000 per month now have the purchasing power of around two or three hundred because the Turkish lira has been hit hard on international markets. When even fruit and vegetables are hit by inflation — where once a kilo of olives in Turkey cost 15 liras, today that will buy you very few — how are people expected to live?

In the West, despite the wealth, government support and the welfare state, the gap between salaries and high prices has become huge, prompting some to talk about famine in Europe. One of the world’s supposed richest countries, the UK, has thousands of food banks upon which many working people now rely.
Currency manipulation and inflation is not a natural disaster; none of this is. So who is behind it? Who is really controlling the world’s wealth, livelihoods, economies and, ultimately, people if our governments are powerless to prevent this happening? There are many questions that need answers, but nobody is asking them.

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This article first appeared in Arabic in Al-Quds Al-Arabi on 16 December 2022

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.