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      ‘What am I going to do?’: soaring prices fuel calls for US government to step in

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      ‘What am I going to do?’: soaring prices fuel calls for US government to step inLarge corporations are passing on higher-than-needed price increases to customers under the cover of inflation, war and supply chain squeezes, experts say Outside a Dollar Tree in Detroit, Latasha Holmes lamented the rising cost of toilet paper, beverages, food and other items she had just purchased. The price increases, she said, were forcing her to choose among necessities for her and four kids.“What am I going to do? Prices are up everywhere, all over town,” she said. “I can’t afford everything.”But while Holmes struggles, Dollar Tree thrives. The retailer increased its prices by 25% as profits jumped 269% between 2019 and 2021, and its profit margins widened. Shareholders won too. The company also announced a stock buyback program worth $1bn that will deliver cash from those price increases to its investors.Dollar Tree and other large corporations are juicing profits by passing on higher-than-needed price increases to customers like Holmes under the cover of inflation, war and supply chain squeezes, consumer advocates and economists say. They are calling for the federal government to take bold steps to rein in the companies.Revealed: top US corporations raising prices on Americans even as profits surgeRead moreAmong proposed prescriptions are price controls, improved price fixing rules, commodity market intervention, stock buyback regulation and antitrust enforcement. Ranged against those proposals are a powerful business lobby and a divided Congress that seems unable to pass major legislation.“There are reasons to have a profit incentive, but there are also reasons to have an overall regulatory body that can say, ‘This is actually profiteering … while everyone is hurting,’” said Krista Brown, a policy analyst with the American Economic Liberties Project.A Guardian analysis of 100 top corporations’ Securities Exchange Commission filings found a median increase of 49% in profits between the most recent quarter and the same quarter two years ago, pre-pandemic. It shows companies have largely shielded themselves from inflationary pain by passing most or all of their increased costs on to customers via price hikes.So far, the federal government’s most visible attempt to address inflation has been to increase interest rates, rates look set to rise again this week. But the Guardian’s data suggests such a measure may miss an important mark. Raising rates effectively takes money out of consumers’ pockets to cool the economy.If corporate profits are contributing in a meaningful way, then raising rates would only reduce the amount of money people have to spend on products and services for which prices are still going up.“That would mean you’re exacerbating this dynamic instead of doing anything to help it,” said Isabella Weber, University of Massachusetts Amherst economist.Instead, limited and targeted price controls could work for essentials like bread, she said, but stressed those would have to be coupled with a bailout plan for negatively affected companies.“Increased prices for basic items like bread can exert enormous pressure on wages” and send inflationary ripples throughout the economy, Weber added. Though price controls are controversial and generally regarded as a leftist idea, the last president to enact them was Richard Nixon, who imposed a 90-day freeze on wages and prices to address inflation in 1970. Price controls were also enacted during and following the second world war, when, again, supply chain issues and pent up demand led to soaring prices.Table of 100 US companies’ profit growthBut price rises are not the only issue critics would like to see the Biden administration address. Others, like Groundwork Collective’s executive director, Lindsay Owens, have called for a ban or new restrictions on stock buyback programs. Joe Biden’s 2023 budget proposes prohibiting executives from selling their stock three to five years after enacting a buyback program.“The other big winner besides the shareholders in excess cash that’s going to buybacks are the executives,” Owens said. “They announce the buybacks, their stock prices soar, then they sell their shares and there are a number of ways to make this work better.”The Guardian’s analysis found companies’ buyback programs over the last 15 months totaled $544bn. That cash could have been reinvested to keep prices down, or increase workers’ wages, consumer advocates say.Others levelled accusations of price fixing and gouging. The American Economic Liberties Project is helping draft legislation that would make it easier for businesses to sue companies for price fixing by making private corporate communications more accessible. As of now, only 3% of price fixing cases make it to trial, Brown said.“Reinvigorating price fixing laws and going after price gouging in moments like this, where a war or Covid are used as excuses for companies to raise rates just because they can, could help a lot,” she added.Fixing is especially a problem in highly consolidated industries, consumer advocates say. Companies have benefited from “decades long under-enforcement of consolidation laws”, added Martin Schmalz, an Oxford University economist.Just four companies control most of the US beef industry, four airlines control about 80% of domestic passenger traffic, Walmart accounts for the majority of grocery sales in the majority of US states, the list goes on and on.And it’s not just the companies that have outsized control. Large investors also a role to play.Schmalz pointed to the Investment Company Act, which limits investment funds to holding no more than 10% of a corporation’s securities. Vanguard on average holds 10% of all S&P 500 companies, Schmalz research has found, but it is not violating the law because companies within its fund family own the shares, not Vanguard itself. But Vanguard still executes the voting rights of more than 10% of shareholders.“The law is written at the fund level so technically speaking they don’t violate the law, but they are violating the spirit of the law,” Schmalz said.Economists and attorneys working on US antitrust law have proposed prosecuting mutual funds like BlackRock or Vanguard that own large stakes in multiple companies in the same sector. Such shareholders can exert an outsize influence on companies’ pricing decisions, Schmalz said, and he noted Investment Company Act language that specifically targets this scenario: “The national public interest … is adversely affected … when investment companies [have] great size [and] excessive influence on the national economy.”Schmalz said there’s little discussion among policymakers to address that specific issue.Biden’s budget includes over $220m for antitrust enforcement, and bills that would break up large tech companies have bipartisan Senate and House support.The Guardian’s analysis highlighted the commodity market boom as companies trading in grain, steel, mining, wood, rubber, meat, oil, homes and other materials generally recorded higher profit increases than companies across the rest of the economy.However, many commodity companies operate in what analysts characterize as “feast and famine” cycles in which they’re unprofitable for years before cashing in. The pendulum has swung for many commodity companies in the day’s economic climate.“When there’s a chance to raise prices when markets are tight, companies are going to do so,” said Skanda Amarnath, executive director of the Employ America thinktank. “It’s some part opportunistic, some part greed, some part rationality, some part a response to uncertainty.”The oil industry highlights the dynamic. After seven years of low returns, it’s restricting supply to boost profits regardless of how that hits Americans at the pump. Earnings calls transcripts reveal executives eagerly “putting shareholders first” and an investor who described industry-wide supply suppression “one of the delights of this earnings season”.Bar chart of the monthly change in US wages since January 2019Bringing volatile commodity prices under control would require curtailing uncertainty and building supply chain resiliency, analysts who spoke with the Guardian say. That could involve some degree of government intervention to cut down on risk by establishing a floor on commodity prices. The government could do that by effectively becoming the “buyer of last resort” when material prices dip below a certain level.But the government should also set a ceiling above which it collects profits, said commodities analyst Alex Turnbull. He suggested the federal government set up what’s effectively a state reserve board.Turnbull pointed to lithium, which, amid increased demand for EV batteries and supply chain squeezes, jumped from $5,000 a ton to $45,000 a ton last year. Higher prices impact the pace of the clean energy transition, and the government could hypothetically set a $10,000 a ton floor price and $25,000 a ton ceiling that would limit the volatility, Turnbull said.The federal government could also increase stockpile reserves of products like grain or oil that are released when prices spike.“That sends the message ‘You should plant more wheat because if it goes really bad, you might have a lean year or two, but we will buy your wheat. But on the other hand don’t expect to buy a Lamborghini if you’re a farmer in Iowa because when prices get too high we’ll be out there selling the shit out of our stockpiles,’” Turnbull said.Stabilization may also spur investment in raw material production that’s risky, which would further bolster markets against future supply shortages. Few companies have built steel plants in recent years because the prices have been so low, Turnbull noted, and now the world is short on steel.Though price caps are “not politically palatable” Bespoke Investment analyst George Pearkes said, the government could take a number of measures to steer futures curves and markets for raw commodities like oil and wheat.“Something in between where there are strategic efforts to smooth volatility, and provide the private sector with enough certainty that they can make decisions is a lot more compelling,” he said.Spikes in investment for some commodities, like nickel, that are essential to the clean energy transition, can be a positive development, Turnbull said. Mining companies limped through the several years leading up to the pandemic, but reaped windfalls over the last year.“People say ‘Nickel producers are making too much money’, well, they didn’t make money for a decade,” Turnbull said. “At some point, somebody has to put money down to dig holes because people aren’t going to drive to the middle of fucking nowhere with a truck and work for free.”Another force in some commodity price spikes: Wall Street speculation. Commodity markets were once heavily regulated because they deal in raw materials that underpin the economy. An influx of investment capital followed the commodity markets’ deregulation about 20 years ago, and some are now treated like speculative assets similar to bitcoin, said Rupert Russell, who authored a book on the topic.The consequences of economy-addling commodity price spikes are real, he adds, pointing to the 2010 grain prices that helped trigger the Arab spring uprising in Tunisia.Supply chain back ups, inflation and war have generated “radical uncertainty” in which no one knows how much commodities are worth, because the prices are no longer anchored, Russell told the Guardian. He echoed others’ calls for stronger government intervention to tamp down the casino-like mentality.“Once there’s not just radical uncertainty but markets dominated by speculators, algorithmically driven speculation that is just kind of responding to headlines, then you’re going to get that kind of Bitcoin-esque volatility,” he said.But experts say there are few viable short-term solutions, and long-term measures don’t help Holmes. That’s forcing her to think about getting another job to survive as she feels the pressure of an economic system stacked against her.“I don’t want to. I’ve got four kids to take care of, but what am I supposed to do?” she asked.TopicsUS economyInflationEconomicsUS politicsUS income inequalityInequalityfeaturesReuse this content More

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      Lebanon Takes a Step Forward but Risks Still Remain

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      The Fair Observer website uses digital cookies so it can collect statistics on how many visitors come to the site, what content is viewed and for how long, and the general location of the computer network of the visitor. These statistics are collected and processed using the Google Analytics service. Fair Observer uses these aggregate statistics from website visits to help improve the content of the website and to provide regular reports to our current and future donors and funding organizations. The type of digital cookie information collected during your visit and any derived data cannot be used or combined with other information to personally identify you. Fair Observer does not use personal data collected from its website for advertising purposes or to market to you.As a convenience to you, Fair Observer provides buttons that link to popular social media sites, called social sharing buttons, to help you share Fair Observer content and your comments and opinions about it on these social media sites. These social sharing buttons are provided by and are part of these social media sites. They may collect and use personal data as described in their respective policies. Fair Observer does not receive personal data from your use of these social sharing buttons. It is not necessary that you use these buttons to read Fair Observer content or to share on social media. More

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      in US Politics

      Democrats announce plans to ‘go after’ big oil in effort to bring down prices

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      Democrats announce plans to ‘go after’ big oil in effort to bring down pricesNancy Pelosi says oil companies ‘hoarding the windfall while keeping prices high at the pump’ amid concerns over US inflation The Biden administration is to propose legislation that would allow US federal and state agencies to “go after” oil companies on wholesale and retail sales practices, lambasting the industry over price gouging and profiteering.As American voters express increasing concerns about the high prices of a wide range of consumer goods, including energy and food, Senate majority leader Chuck Schumer said passing legislation to bring down retail gasoline prices “is at the very top of our list”.‘We’re not attacking Russia,’ Biden says as he asks for $33bn in Ukraine aid – liveRead moreNeither Schumer nor House speaker Nancy Pelosi would say when such legislation will be voted upon, or how much money it could end up saving consumers if enacted into law.“Big oil has profiteered and exploited the marketplace,” Pelosi told reporters, noting companies’ strong corporate profits over the past year. “They are hoarding the windfall while keeping prices high at the pump,” she added.The move comes as gas prices have surged in the wake of Russia’s invasion of Ukraine. Despite recent falls, the average price of a gallon of gas is now over $4 in the US, up from $2.88 a year ago, according to the American Automobile Association.Oil companies have enjoyed record profits as prices have soared. Exxon, the largest US oil company, is expected to report record earnings on Friday and rival Chevron recently reported “the best two quarters the company has ever seen”.Pelosi said the White House had discussed a “holiday” for Federal gas taxes but said that there was no evidence that oil companies would pass those savings on to consumers.Oil companies are not alone in reporting huge surges in profits even as consumers face higher bills thanks to soaring inflation. An analysis of 100 leading US companies found their net profits had risen by a median of 49%, and in one case by as much as 111,000%. The increases came even as prices rose and average wage increases were eroded by rising inflation.Reuters contributed to this storyTopicsOil and gas companiesUS politicsBiden administrationInflationEconomicsEnergy industrynewsReuse this content More

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      DC Deconstructed: The View from the Carriage House

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      The Fair Observer website uses digital cookies so it can collect statistics on how many visitors come to the site, what content is viewed and for how long, and the general location of the computer network of the visitor. These statistics are collected and processed using the Google Analytics service. Fair Observer uses these aggregate statistics from website visits to help improve the content of the website and to provide regular reports to our current and future donors and funding organizations. The type of digital cookie information collected during your visit and any derived data cannot be used or combined with other information to personally identify you. Fair Observer does not use personal data collected from its website for advertising purposes or to market to you.As a convenience to you, Fair Observer provides buttons that link to popular social media sites, called social sharing buttons, to help you share Fair Observer content and your comments and opinions about it on these social media sites. These social sharing buttons are provided by and are part of these social media sites. They may collect and use personal data as described in their respective policies. Fair Observer does not receive personal data from your use of these social sharing buttons. It is not necessary that you use these buttons to read Fair Observer content or to share on social media. More

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      in World Politics

      The Unholy Alliance Between the US Security Apparatus and Big Tech

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      The Fair Observer website uses digital cookies so it can collect statistics on how many visitors come to the site, what content is viewed and for how long, and the general location of the computer network of the visitor. These statistics are collected and processed using the Google Analytics service. Fair Observer uses these aggregate statistics from website visits to help improve the content of the website and to provide regular reports to our current and future donors and funding organizations. The type of digital cookie information collected during your visit and any derived data cannot be used or combined with other information to personally identify you. Fair Observer does not use personal data collected from its website for advertising purposes or to market to you.As a convenience to you, Fair Observer provides buttons that link to popular social media sites, called social sharing buttons, to help you share Fair Observer content and your comments and opinions about it on these social media sites. These social sharing buttons are provided by and are part of these social media sites. They may collect and use personal data as described in their respective policies. Fair Observer does not receive personal data from your use of these social sharing buttons. It is not necessary that you use these buttons to read Fair Observer content or to share on social media. More

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      Jacob Zuma Threatens to Bring South Africa to its Knees If He Is Jailed

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      The former President of South Africa, Jacob Zuma, is the glowering figure who looms large over the country’s future. The 80-year-old is determined that never again will he suffer the ignominy of being jailed — despite being charged with hundreds of counts of corruption in a case that has dragged on for nearly 17 years. Zuma has pleaded not guilty to corruption, money laundering and racketeering in a 1990s $2 billion arms deal that he promoted.

      To head off any chance of being imprisoned, he has deployed the so-called “Stalingrad defense.” This is a term for a legal strategy of stalling proceedings based on technicalities. Zuma’s lawyers are fighting every attempt to put him before a judge on the basis of arcane technicalities. Finally, this strategy is wearing thin and Zuma’s supporters are now resorting to alternative tactics.

      Past Precedent

      This is not the first time that Zuma faces time in prison. Last year, the Constitutional Court of South Africa found Zuma guilty of contempt of court and sentenced him to jail for 15 months. Zuma’s supporters took to the streets in KwaZulu-Natal and Gauteng. They blocked roads, assaulted people, and looted and burned supermarkets.

      Embed from Getty Images

      When Zuma’s legal team were in court on April 11,  they reminded the court of what had happened. They warned the judge that the riots that ensued after his jail sentence last year resulted in the deaths of more than 350 people. Zuma’s lawyers claimed that the riots “were partly motivated or sparked, to whatever extent, by a sense of public outrage at perceived injustice and special treatment of Mr Zuma.” They were making an obvious threat.

      It is important to put Zuma’s July 2021 riots in context. The country’s most notorious mass killing remains the Sharpeville massacre of March 1960. This occurred during the era of apartheid. The massacre cost 69 lives as the police fired into a crowd. The Zuma riots cost many more lives than the Sharpeville massacre.

      To contain these riots, South African President Cyril Ramaphosa had to deploy 25,000 troops. He admitted that he had no prior warning from his intelligence services of the scale of the unrest. This is unsurprising. Zuma was an intelligence agent for the African National Congress (ANC) and has strong links with South Africa’s security services. As the South African media have reported: “Former senior security agency and ANC members aligned with Jacob Zuma have allegedly instigated the unrest in Gauteng and KwaZulu-Natal. Citing sources in the intelligence community…these former agency members used intelligence networks to spark the riots.”

      The government made promises to bring those who instigated the Zuma riots to justice.  Duduzile Zuma-Sambundla, Zuma’s daughter, was one of those accused of stoking the riots. She and none of the major figures allegedly behind the Zuma riots have been held accountable. Of the 3,000 suspects arrested, all of them have been small-fry.  

      Constitutional Challenge And Risk of Becoming a Failed State

      Like a latter-day Samson, the former president is threatening to bring down the South African constitutional order around him. Those close to Zuma have threatened both the judges and the constitutional order itself. The South African constitution, shaped under Nelson Mandela is today questioned by factions of the ANC who want to make the judiciary and the constitution subservient to the political establishment.

      Many ANC leaders, keen to stave off allegations of wrongdoing, have muttered darkly about the constitution for years. KwaZulu-Natal Premier Sihle Zikalala recently criticized the courts, saying “It is time we should debate whether the country does not need parliamentary democracy where laws enacted by Parliament should be above all and not reviewed by another organ…” Ironically, Zikalala is calling for a return to parliamentary supremacy — the hallmark of the apartheid years.

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      There is a real cost to such maneuvers by ANC politicians. In its December conference,the party will elect a new leadership. If some ANC members have their way, they could even remove Ramaphosa, although this seems unlikely as of now. Nevertheless, the ANC’s branches and its provincial structures are experiencing a bitter battle between the pro- and anti-Zuma factions. These factions are fighting for the support of the ANC’s 1.5 million members in meetings across the country, some of which are turning violent.

      While the ANC is locked in internal battles, there are warnings that South Africa might be turning into a failed state. The government has failed to provide many essential public services already. The railways have been vandalized and looted so severely that no trains have run in the Eastern Cape since January 7. Critical coal and iron ore exports are grinding to a halt because of cable theft  that has gone unchecked for years because of South Africa’s systemic corruption.  As per Bloomberg, “more than $2 billion in potential coal, iron ore and chrome exports were lost” in 2021.

      Embed from Getty Images

      The failure of the electricity supply system is so chronic that it is hardly remarked upon. In the Cape, the opposition Democratic Alliance has plans to dump the state electricity provider — Eskom — and establish its own power supply.

      In a September 2020 report, Eunomix warned that “bar a meaningful change of trajectory, South Africa will be a failed state by 2030.” The remarks were echoed in March this year by the treasury director general Dondo Mogajane. He took the view that, if South Africa continued on its present path, it could indeed become a ‘failed state’ with “no confidence in the government, anarchy and absolutely no control in society.”

      In April, Ramaphosa was forced torespond to Mogajane. The president adamantly declared that South Africa was “not a failed state yet and we will not get there.” Ramaphosa claimed that his government was taking steps to rebuild South Africa’s capacity and fight corruption. This claim remains an admirable but unfulfilled ambition.

      Zuma has not been brought to court and his associates are locked in battle with Ramaphosa’s supporters for control of the ANC and the country. Meanwhile, growth rates slide, unemployment rockets and poverty remains endemic. Even as South Africa is on the slide, the world’s attention is elsewhere. This is a tragedy. Africa could lose one of its few genuine democracies and see the collapse of its largest economy.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      US inflation climbed to 8.5% in March, highest rate since 1981

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      US inflation climbed to 8.5% in March, highest rate since 1981War in Ukraine drives up energy costs as figures strengthen expectations Federal Reserve will raise interest rates next month Prices in the US climbed at their highest rates since 1981, rising 8.5% over the year to the end of March as the war in Ukraine drove up energy costs for Americans, the labor department announced on Tuesday.The latest Consumer Price Index (CPI) – which measures the prices of a basket of goods and services – comes after the index rose by 7.9% in the year through February, the fastest pace of annual inflation in 40 years.Driven up by continuing supply chain problems, soaring demand and rising energy prices, inflation is now at levels unseen in the US since Ronald Reagan took the White House from Jimmy Carter.Biden heads to Iowa to unveil plan to reduce gas prices as inflation soars – liveRead moreThe price increases are broad – with the cost of rent, gas and food causing particular hardship for lower income Americans and represent a major blow to the Biden administration, already facing tough odds of retaining control of Congress in November’s midterm elections.Soaring gas prices were the main driver of the rise. The gasoline index rose 18.3% in March and accounted for over half of all the items’ monthly increase. Gas prices have begun to fall, in a sign that some economists have argued may suggest inflation has reached its peak.The food index rose 1% in March compared with February, and is up 8.8% compared with the prior 12 months. Canned fruit and vegetable prices rose 3.8% from February to March, rice prices rose 3.2%, potatoes 3.2% and ground beef 2.1%.Andrew Hunter, senior US economist at Capital Economics, said energy prices would come down in the months ahead and there were signs that price pressures appear to be moderating.But, he added, the figures were likely to strengthen the Federal Reserve’s plan to increase interest rates as it struggles to tamp down inflation.“With Fed officials sounding more hawkish by the day, the March data won’t change their plans to up the pace of rate-hikes to 50 basis points per meeting from next month. Even so, it does support our view that, having been slow to realize that the initial surge wasn’t transitory, Fed officials are now being a bit too pessimistic about how quickly inflation will drop back,” he wrote in a note to investors.The White House warned ahead of the report it was expecting a bad set of figures. On Monday White House press secretary Jen Psaki told reporters that the labor department’s previous report had not included the majority of the jump in oil and gas costs caused by the Kremlin’s invasion of Ukraine.“We expect March CPI headline inflation to be extraordinarily elevated due to Putin’s price hike,” Psaki said.There are two versions of the CPI, one that includes all the prices consumers face and another – core CPI – which excludes food and energy prices, which tend to be more volatile. Core prices climbed 6.5% in the year through March, up from 6.4% in the year through February.The core index did suggest the pace of inflation was slowing, rising 0.3% from February, compared with 0.5% the prior month.Psaki said the administration expected a wide disparity between the two measures because of the soaring price of gas. Nationally the average price of a gallon of gas is now $4.11, compared with $2.86 a year ago, according to AAA.“At times, gas prices were more than one dollar above pre-invasion levels, so that roughly 25% increase in gas prices will drive tomorrow’s inflation reading,” Psaki said.Joe Biden addressed the latest inflation figures at a speech in Des Moines, Iowa, where he announced plans to use more ethanol in US fuel during the summer in an attempt to tackle high gas prices. “I am doing everything in within my executive power to bring down the Putin price hike,” he said. TopicsUS economyInflationEconomicsUS politicsnewsReuse this content More

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      Making Sense of the Tigray War in Ethiopia

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      FO° Insights is a new feature where our contributors make sense of issues in the news.

      Even as the focus has been on Ukraine, a bloody and brutal conflict has raged in Tigray for 17 months but hardly attracted global attention. On March 25, rebel Tigrayan forces declared that they would respect a ceasefire proposed by Ethiopian Prime Minister Abiy Ahmed as long as sufficient aid was delivered to their war-scarred northern region “within reasonable time.”

      Martin Plaut on the Tigray War, Ethiopia and More

      In this episode, we have the former BBC World Service Africa Editor explain what is going on in the Tigray War in Ethiopia and you can read what he has to say below.

      Embed from Getty Images

      How significant is the humanitarian ceasefire in Ethiopia’s Tigray region?

      This is the first real breakthrough in the negotiating process that we’ve had since the war began in November 2020. There have been terrible bitter months in which there has been a huge loss of life. As per estimates, up to 500,000 people have died either from the conflict or from starvation in Tigray. The whole of Tigray is surrounded by enemies with the Eritreans to the north and the Ethiopians to the south, the east and the west.

      To avoid starvation, it is vital that supplies get through. The Tigrayans need something like a hundred (100) trucks a day. They’ve had 100 trucks in the last, I don’t know, six weeks. There’s starvation in Tigray and humanitarian assistance is desperately needed.

      Why has the ceasefire taken so long?

      Essentially the Ethiopians and the Eritreans who are prosecuting this war have used starvation as a weapon of war. They are trying to crush the Tigrayan population whom they loathe by any means possible. They attempted to invade the country in November 2020 but that didn’t work. The Tigrayans had to flee their capital but, after a few months, they reorganized and they pushed the Eritreans and the Ethiopians right out of most of Tigray.

      There are only some areas on the west and in the far north of Tigray which are still occupied. So the Ethiopians and the Eritreans have basically used starvation as a weapon of war. They’ve cut all communications links, they’ve prevented medical supplies from coming in and they prevented the trucks from rolling in either through the east or through the south. The people are starving.

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      How serious is the humanitarian situation?

      The situation is terrible. As always, it is always the very young and the very old who die first. The problem is that we have no absolute certainty about what is going on because the government of Ethiopia and of Eritrea have refused to allow any journalists to the frontlines even on the Ethiopian and Eritrean sides, let alone into Tigray itself. All communications are cut to Tigray, banking services are cut, there’s no way of paying for anything, all fuel supplies going in have been prevented. So Tigray is almost like a sealed-off area and nobody knows really what is going on but we do get to know some things from whispers, and the whispers are terrible.

      Why has this war attracted less attention than Russia’s invasion of Ukraine?

      If you prevent all international journalists from going in, there’s a news vacuum. How do you cover a story when nobody is allowed to be on the ground? Then, you can’t actually get the shots, film the mother with the dying baby or the grandparents unable to feed themselves or look after themselves. You do not get this information we’re getting now, day in, day out, from Ukraine.

      You’re getting nothing from Mekelle, the capital of Tigray, let alone the rest of the area, some of which is very remote. Most monasteries have been looted, women have been routinely raped, I mean literally routinely raped. Some of the testimony was so brutal it is truly some of the worst I have ever seen in my life.

      What is at the stake for Ethiopia and the Horn of Africa?

      Essentially, there are two views of Ethiopia. As per one view, Ethiopia is an imperial country, a single unitary country that was developed in the 19th century and should really essentially return to that. The Tigrayan have another view. They say that we are all ethnic groups, we must all have a federated system in which real power reverts to all of the ethnic areas. That is what the Tigrayans tried to do until 2018 when they lost power. They tried to create this federation sometimes successfully, sometimes unsuccessfully.

      Essentially, those are the two views of how Ethiopia should be run and it’s equally the way in which the whole Horn of Africa should be governed.

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      How can Ethiopian Prime Minister Abiy Ahmed resolve this war?

      My view is if he doesn’t really allow an alternative view of the way Ethiopia is run then it is unlikely that we will have a resolution of this conflict. That will mean that we’ll go back to war. We’ve already seen somewhere between 200,000 and 500,000 people killed and that’s before you take in the deaths of the Somalis who fought in this war, of the Eritreans, tens of thousands of whom have been thrown into the frontline, so I mean the death toll could be immense.

      And we don’t want to see any more of this suffering so we really do need some kind of resolution that addresses the political as well as the humanitarian issues.

      This transcript has been lightly edited for clarity.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More