Middle East

We have followed the Mid Eastern situation rather closely past years. Investors world wide are at this writing trying to guess the extent of contagion in that region. We can help them. It will be all enveloping.

A fissure has been detected and it will be exploited. To repeat from an earlier sketch - this movement will not be limited to Egypt and Libya. We are now at launch time.

The degree of violence accompanying this adjustment is an unknown to us. However, the course of least resistance for crude prices over the intermediate term is higher. A 30% increase in crude (for ex., 125 on W Texas inter.) is the high side risk as we take this path. And that would deliver a significant retardant to US growth, especially crimping consumer activity, shaving at least 1 ½ % from GDP if maintained for very long.

Corporate planners and investors are to account for this risk.



From Mark LeVine, a prof at UC Irvine, and sr visiting researcher at the Centre for Middle Eastern Studies at Lund Univ in Sweden: “The youth of the Arab world, until yesterday considered a ‘demographic bomb’ waiting to explode in religious militancy and Islamo-fascism, is suddenly revealed to be a demographic gift, providing precisely the vigour and imagination that for generations the people of the region have been told they lacked. They have wired - or more precisely today, unwired - themselves for democracy, creating virtual and real public spheres were people from across the political, economic and social spectrum are coming together in common purpose.”

And so it is. Even now we witness the unthinkable - protest in the quiet backwater of Oman, before a sedate and tranquil country. Two people have been killed. Suddenly the Sultan has promised to create 50M jobs, plus an allowance equivalence of $390 for job seekers.

The Sultan does not understand that he and his kind cannot provide a solution; they are the problem.

Naturally, an evolution to consensual gov’t in this region is a plus for the US. It is a guarantee as we said before of long-term energy security (another is enlightened US energy policy, material for another sketch).

We have witnessed the birth of a new era in the Mid East, one which can only enhance the interests of the West in years to come.

Robert Craven