Saturday, November 17, 2007

Oil goes through the roof -- cooking oil that is

Suddenly, over the past three days, the cost of important food staples here has doubled. Cooking oil, milk, butter are all much more expensive -- if you can find them. The little Mom and Pop stores around the city have bare shelves and the big supermarkets are rationing purchases.

Yesterday, the price of taxi rides doubled as well. Rides to the airport are exorbitant and many people are resolving to just walk everywhere. A hard promise to keep when it's been snowing mostly non-stop for three days and there's a foot of snow on the ground.

The Financial Times reported yesterday that the rising prices are the result of fears about a new war.

The country has been going through a serious political crisis, the worst since before the 1992 war. The European High Commissioner has been pressuring the Serb and the Croat-Muslim sides to get serious and merge the separate police forces into one. That has pissed off the Serbs who have reacted by threatening to split off from Bosnia, resisted any more integration with the non-Serb half and additionally warned that if Kosovo is granted independence from Serbia all hell will break loose. The prime minister of the Serb part of the country dramatically resigned a few weeks ago, effectively shutting down the government.

People here mostly seem annoyed and pissed off at the politicians about this, rather than afraid of a new war. Some think there would not be a full-fledged war like 15 years ago -- EFOR forces would intervene, but small-scale violence and outbreaks in the most contentious places could happen if the country breaks apart.

Still, how the stockpiling began is hard to see. Was someone fueling the fear for political purpose? Someone exploiting the situation to make money? At any rate there's something of a self-fulfilling prophecy going on. As my smart friend Drazen explained it, people know prices are going up, they worry they will go up more and so they are rushing out to buy.

He said, "Based on previous war experience, the most important things (beside food in cans) are wheat, oil for cooking, sugar and cigarettes. At 1993, in Sarajevo at one moment, one bottle of oil for cooking (1 liter) or 1 kilo of sugar, was worth on the street about 130 DM ( at that time it was about 130 US$).

So, if sales of wheat, oil for cooking and sugar are significantly increased, that's sign for fear of war.
But, things below the surface are very ugly and scared now."

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