Recently, anti-government protests have spread in Ecuador, South America, as people struggle with rising fuel costs. [Image source=AP Yonhap News]
[Asia Economy Reporter Hwang Sumi] Following Russia's invasion of Ukraine, international oil prices have soared and inflation has worsened, leading to scenes of citizens taking to the streets in various parts of the world, complaining of financial hardship.
On the 2nd (local time), The New York Times (NYT) reported that the sharply rising fuel costs are affecting not only the economies of countries worldwide but also their political spheres and social safety nets. The increase in fuel prices is fueling inflation, prompting central banks in various countries to raise interest rates to curb it, which in turn is creating a vicious cycle that makes life even harder for ordinary people.
The impact is especially significant on vulnerable groups, including those in developing countries. According to the NYT, in Ecuador, South America, indigenous-led anti-government protests have spread recently, driven by hardships caused by soaring fuel prices. The protests, which have lasted more than two weeks, resulted in at least six deaths and around 500 injuries, causing major turmoil. In response, the government announced a 10-cent (approximately 130 won) reduction in gasoline and diesel prices. However, the Confederation of Indigenous Nationalities of Ecuador (CONAIE), leading the protests, demanded price cuts of 30 cents (about 389 won) for gasoline and 35 cents (about 454 won) for diesel, so the government's reduction was seen as insufficient.
In Ghana, Africa, police aimed tear gas and rubber bullets at citizens protesting against soaring fuel prices, inflation, and tax policies. In Libya, protesters angry over financial hardship stormed the parliament building in the eastern Tobruk region and set it on fire. In Nigeria, hairdressers are cutting customers' hair using cellphone lights because they cannot obtain gasoline needed to operate generators to power the shop lights.
The rise in fuel prices due to the Ukraine war has intensified recently as Russia has reduced supply in response to Western sanctions. This affects not only countries highly dependent on Russian fuel but also those with relatively low dependence, as fuel prices are already rising competitively in the global market.
The International Energy Agency (IEA) expects high and unstable energy prices to continue for several years. It also estimates that due to the surge in energy prices, about 90 million more people in Asia and Africa will be unable to consume electricity in the future. Eswar Prasad, a professor at Cornell University, said, "The simultaneous rise in energy and food prices is a fatal blow to the poor in almost every country," adding, "If this continues for a long time, it could cause irreversible consequences worldwide."
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