Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Arab Spring: Counting Costs and Oil Profits In MENA

Politics / Crude Oil Oct 16, 2011 - 01:29 PM GMT

By: EconMatters

Politics

Best Financial Markets Analysis ArticleTo follow up on our last article about the Arab Spring shockwaves, we thought it'd be of interest to see what the cost impact is for countries affected by the uprising.  A timely new study by the risk advisory firm Geopolicity provides some insight into that subject.


The report estimates that the Arab Spring has already cost countries across the MENA region (Middle East and North Africa) close to $56 billion so far just on the loss of GDP and productivity along, not including infrastructure damage, losses from foregone business and foreign direct investment, and casualties.  (See Table Below).
Chart Source: Geopolicity.com
However, the other side of the ledger is that since the unrest either has threatened or actually disrupted oil exports (e.g. Libya's coveted light sweet crude), the fear and risk premiums added to crude oil prices (See Chart Below) have also benefited the oil exporters in the same MENA region.


The study concludes that so far, oil exporters such as Saudi Arabia, Kuwait, and UAE were winners and oil importers losers of Arab Spring, while Libya, though an oil exporter during normal times, has come out as one of the biggest losers.  So in aggregate, the Arab Spring has actually provided a positive economic boost across the region worth almost $39 billion:
."....Libya, Egypt and Syria have so far paid the highest price—both human and economic....In terms of public spending, the uprising has led to a 77% reduction in revenues in Yemen and an 84% reduction in revenues in Libya, the impact of which will have been significant on basic and essential services.   

.... oil exporting countries such as the UAE, Saudi Arabia and Kuwait the impact on GDP has been positive with GDP growth in the UAE totaling US$62.8 billion, Saudi Arabia totaling US$5 billion and Kuwait US$1 billion. As a result, the overall impact of the Arab Spring across the Arab Realm has been mixed, but positive in aggregate terms (+US$38.9 billion).

The report further criticizes the lack of international support in the region:

"Given the scale of the challenge at hand international support has fallen way short of expectations. The support promised by G8 at the May 2011 Deauville summit has to a large extent not materialized."

Actually, the same criticism could also be said about the richer and more stable countries (who actually benefited from Arab Spring according to Geopolicity's study) right in the heart of the region.  Energy Intelligence quoted Saudi Arabia's Prince Turki al-Faisal at a recent industry conference in London that since the start of 2011,

"The kingdom has announced aid packages of over $4 billion to Egypt and over $1 billion to Jordan as well as being the main funder of aid packages to Bahrain and Oman, where we will give $10 billion over 10 years to each country in the hopes of helping those nations transition smoothly out of their current status of turmoil.”

To be fair, the resource of the developed nations, which make up the majority of G8 and G20, is a little stretched with their own debt and social economic crises, and the high oil price driven partly by the Arab Revolutions certainly has not helped either.

A proposal of injecting another $350 billion into the IMF (The U.S. share based on the IMF members' quota of 17% would've been roughly $60 billion) into EU debt bailout was immediately rejected by the U.S. and others, while the G20 sent an unusually direct message to the Euro Zone to basically to fix its own crisis in eight days.    

Most people have come to accept that global economic and political power paradigm is shifting from developed countries towards the developing economies, which is part of the normal economic and business cycle on a global scale.  Nevertheless, by the same token, the world also has to come to grip with the fact the days are numbered, when the developed economies are relied upon as the ultimate  resource to fund or help with turmoils around the globe.

New status and power come with new responsibilities.  "New Money" around the globe will need to step up to the plate as well.    

By EconMatters

http://www.econmatters.com/

The theory of quantum mechanics and Einstein’s theory of relativity (E=mc2) have taught us that matter (yin) and energy (yang) are inter-related and interdependent. This interconnectness of all things is the essense of the concept “yin-yang”, and Einstein’s fundamental equation: matter equals energy. The same theories may be applied to equities and commodity markets.

All things within the markets and macro-economy undergo constant change and transformation, and everything is interconnected. That’s why here at Economic Forecasts & Opinions, we focus on identifying the fundamental theories of cause and effect in the markets to help you achieve a great continuum of portfolio yin-yang equilibrium.

That's why, with a team of analysts, we at EconMatters focus on identifying the fundamental theories of cause and effect in the financial markets that matters to your portfolio.

© 2011 Copyright EconMatters - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules