A Silver Lining to Mideast Unrest
By Bill Moore
Posted: 06 Mar 2011
The historic events now taking place in the Middle East from Algeria to Bahrain are starting to worry the West as oil prices move higher, closing at $98.21 on Friday, February 25, 2011. The fear is that this will drive energy prices higher, dragging food prices and other consumer goods right along with it, endangering a still-fragile recovery.
While some of us here in the West grumble about the price at the gas pump, hundreds of people are spilling their blood in Libya for a taste of the freedoms we too often take for granted. They've survived under a mafiaosa-like regime for more than four decades, now they want change.
Of course, the worry in the West is what kind of change will the fall of Tunisian president Ali, Egyptian president Mubarak (who now looks like a saint for stepping down relatively peacefully) and now the inevitable fall of Libyan lunatic Muammar al-Gaddifi bring to the Middle East. Will we see the rise of Iranian-like theocracies or something else? I think it's going to be something else and that the blood of the people of Egypt and Tunisia and Libya will water the growth of a new, more democratic order in the region; one the West can work with and respect.
First, recognize that over the course of the next four decades, an enormous amount of the world's wealth will be flowing into the region. Congress Roscoe Bartlett's press secretary shared a piece of information with me last week. The Congressman's office noted that by 2020 OPEC will control 80 percent of the world's remaining oil reserves. Already, the sovereign wealth funds of Saudi Arabia, the United Arab Emirates, Libya and others total in the tens of billions of dollars and will only grow fatter in the coming decade. Libya's sovereign wealth fund alone is estimated at $32 billion. McKinsey & Co. estimated, writes Vali Nasr in 'Forces of Fortune -- The Rise of the New Muslim Middle Class and What It Will Mean for Our World', that the combined assets of Islamic financial houses in 2010 totaled $1 trillion. He notes that Standard and Poors estimates that these will grow to as much as $4 trillion. Shariah-compliant banking services run close to $500 billion. 218 Islamic mutual funds manage $14 billion in assets and the Islamic bond market is worth another $84 billion, only about 10% of the world total, but still significant and growing rapidly.
The point is there is a huge reserve of wealth in the region, which will only grow larger as long as the world needs petroleum. The silver lining to the present chaos is that this revolution isn't being driven by one dictator ousting another, but why a grassroots movement of the populace, catalyzing around the nation's frustrated youth, which represent a huge segment of the population. They are looking for opportunity and that can only come from major reform of their political and economic systems, which at present are so riddled with corruption and inefficiency that it's a wonder they even work at all.
Assuming… and this is admittedly a big IF… the people of Egypt and Tunisia and Libya (and others that will follow) manage to bring about the kind of change that creates a fairer, more just and equitable society, one that ferrets out corruption and corrupt officials, one that streamlines government and economic processes, while balancing their social aspirations and cultural heritage, then we could see the rise of economically powerful, but tolerant political entities who are looking for both respect and opportunity.
Whether they can achieve this or not, depends to some extent on how the West responds to those needs and aspirations. In America's case, our decade's old policy of supporting dictators and autocrats in the region, will be a sizable barrier to trust, but the fact that, as a people, Americans are generally well-liked in the region can help mitigate some of that distrust. The more we can, as individuals and collectively as a government, help them achieve their goals, the better the chances are that we can all work cooperatively moving forward. Doing it successfully will take wisdom and great care on everyone's part.
Vali Nasr writes in the last chapter of Forces of Fortune, "In revitalizing the global economy in the wake of the current financial crisis, the West should work to empower the budding commercial forces all around the Muslim world. That will not only be good for the global economy -- which will get a boost from harnessing the economic energies and purchasing power of 1.2 billion Muslims -- it will expedite the process of liberalization through capitalism."
He adds, "…if there is one thing America is good at, it is unleashing the transformative power of business."
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