The Middle East Turmoil Trap - by Javier Solana

Instability continues to spread in the Middle East, with the military coup in Egypt the latest episode to trigger political tremors throughout the region. With its 85 million people and strategically vital location, Egypt is the most important country on the Mediterranean’s southern shore. Continuing the democratization process that began there in 2011 is urgent.

The Muslim Brotherhood’s Islamist government, led by Mohamed Morsi, demonstrated all too well its incompetence and incapacity to ensure an inclusive democratic transition. But the solution offered by Egypt’s military is far from ideal. Coups always tend to exacerbate problems, not solve them, and this one is no exception.

The first consequence is that Egyptian society is even more divided over the question of political legitimacy. Morsi’s supporters cite the legitimacy of his victory in a democratic election a year ago – and the illegitimacy of the army’s coup and detention of the deposed president – while his opponents defend the legitimacy of the massive, countrywide protests against him.

The Muslim Brotherhood tried to go too far too fast. Its Islamist agenda put crucial state institutions – namely, the army and the judiciary – on edge and clashed with the liberal, modernizing demands of its opponents. The Tamarod movement, which organized the protests that led to Morsi’s ouster, celebrated the military’s decision to intervene.

That precedent is, without doubt, dangerous for a fledgling democracy. The Islamists must have representation in order to ensure that they do not renounce the ballot box as a means of pursuing their objectives.

Neither the Islamists nor the military can build a new regime against the will of a significant part of the population. Despite Morsi’s poor performance in office – a year in which he presided over grave economic deterioration – a solution that served the cause of national and regional stability would have been preferable.

Read more: The Middle East Turmoil Trap by Javier Solana - Project Syndicate

The Middle East in turmoil: Saudi Arabia - by Kudashkina Ekaterina

Saudi Arabia’s statehood stands on oil alone. It is an oasis of feudalism that blossomed because of the country’s dependence on oil and the cheap money that it pours into the state coffers.

Now to the problems there. There are ethno-confessional issues in Saudi Arabia. The eastern provinces, which are mostly populated by Shiites is where the majority of the oil resources of the country are located. So in case the situation there destabilizes, the situation in the entire country will also deteriorate, with the according consequences. 

There are some serious social problems. The Saudis don’t want to work, which is quite typical of many oil-rich states. It is not a prestigious thing to do. Instead, they hold public sector jobs or live off government support, because working is not prestigious. There isn’t a huge gap between the rich and the poor because a lot of money is spent on various social projects but if Saudi Arabia is no longer able to fund these projects, it may become another Yemen with the situation that we’re observing there now.

Islamism is another fairly serious problem for Saudi Arabia, because for the majority of the radically-inclined part of the population, the policies pursued by the royal regime are perceived as treacherous and collaborationist. In this context, Saudi Arabia ends up being an exporter of these radical elements to all the world’s hot spots, although this is largely out of desperation. It is a commonly accepted view that Saudi Arabia supports terrorism but this is not accurate. The point is that Saudi Arabia exports these guys elsewhere so that they don’t run amok inside the country. As soon as someone gets the idea to blow something up, the systems absorbs him straight away: at the mosque he is advised where he needs to go, which foundation to approach, he’s given a gun and shipped off elsewhere – Iraq or another location – so as not to destabilize the domestic situation.

Islamism is another fairly serious problem for Saudi Arabia, because for the majority of the radically-inclined part of the population, the policies pursued by the royal regime are perceived as treacherous and collaborationist. In this context, Saudi Arabia ends up being an exporter of these radical elements to all the world’s hot spots, although this is largely out of desperation. It is a commonly accepted view that Saudi Arabia supports terrorism but this is not accurate. The point is that Saudi Arabia exports these guys elsewhere so that they don’t run amok inside the country. As soon as someone gets the idea to blow something up, the systems absorbs him straight away: at the mosque he is advised where he needs to go, which foundation to approach, he’s given a gun and shipped off elsewhere – Iraq or another location – so as not to destabilize the domestic situation.

For more: The situation in Saudi Arabia: Voice of Russia

Saudi Arabia: Oil States on the Brink?

Saudi Arabian oil does not inoculate the country from discontent. Some estimates of unemployment go as high as 25 percent. Most of the labor force is non-national, as many Saudis consider menial work below them. Many educated Saudis studying abroad stay away as long as possible, knowing that domestic job opportunities are slim. The nation’s high per capita GDP, around $24,000, depends on the government sustaining the welfare state in the face of a growing population. The reforms instituted by King Abdullah, including greater political speech and increased education of all citizens, might just be Egypt revisited: education without opportunity and governance without participation potentially leading to social instability.

Arab Awakening, as some are calling the protest movements, might spread to a major producer like Saudi Arabia. Populations fed up with the lack of true political and economic reforms are less likely to be appeased as time goes on. Even if Saudi Arabia remains quiet over the next few months, the potential for an uprising that challenges the royalty’s absolute power will not diminish, and is likely to increase with a declining welfare state and increasingly educated population. What happens then, and what any outside power could even do about it, could be much scarier to U.S. and Western interests than the events thus far.

For more: Oil States on the Brink? | International Affairs Review

The End Of The Oil Age - by Michael T. Klare

In a testimony before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke spoke optimistically of the economy and dismissed the impact of soaring oil prices, spurred by turmoil in the Middle East. “The most likely outcome,” he said, “is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation.”

Of course, let’s take it for granted that no one inside Washington DC's Beltway has to fill his or her own car with gas. For them, pain at the pump may indeed feel “temporary and relatively modest.” Tell that, however, to the official 9% of unemployed Americans who still have to drive a car in what Bernanke and everyone else who isn’t suffering seems to agree is not a recession. In 1940, the last year of the Great Depression, the unemployment rate in the US was at 14.6% -- and in those days they still hadn’t stopped counting people too discouraged to look for work.

Whatever the outcome of the protests, uprisings, and rebellions now sweeping the Middle East, one thing is guaranteed: the world of oil will be permanently transformed. Consider everything that’s now happening as just the first tremor of an oilquake that will shake our world to its core.

For a century stretching back to the discovery of oil in southwestern Persia before World War I, Western powers have repeatedly intervened in the Middle East to ensure the survival of authoritarian governments devoted to producing petroleum. Without such interventions, the expansion of Western economies after World War II and the current affluence of industrialized societies would be inconceivable.
Here, however, is the news that should be on the front pages of newspapers everywhere: That old oil order is dying, and with its demise we will see the end of cheap and readily accessible petroleum -- forever.

For more: TomDispatch

Why Saudi Arabia can no longer temper oil prices - by Jeff Rubin

With no functional spare capacity left in OPEC, any significant supply disruption in the region could easily see prices spike and test the $147-a-barrel mark set in 2008, just before the crippling global recession.

Once speculators start challenging the mythology of Saudi spare capacity, they will invariably squeeze the market.

But the real danger from the Middle East is not the risk of temporary supply disruptions, or the speculative betting that it will encourage. It is that we lose sight of the levels that oil prices had climbed to even before this latest crisis began, and the basic supply-and-demand forces that pushed them there.

We are now living in a world of triple-digit oil prices. The massive changes this will compel won’t be limited to regime change in the Middle East.

For more: Why Saudi Arabia can no longer temper oil prices - The Globe and Mail

As Oil prices rise on Mideast turmoil - Wall Street acts like an Ostrich

The North American benchmark price for oil headed for its first weekly gain in three weeks on Friday, as continuing turmoil in Bahrain, Libya and Yemen made traders worry that supplies might be disrupted.

March light sweet crude rose $1.04 to $87.40 US a barrel on the New York Mercantile Exchange at mid-morning. The uncertainty caused by the Middle East events was seen gaining importance ahead of Monday's Presidents' Day U.S. holiday.

"With a long weekend ahead of them, traders were concerned that they could return on Tuesday to a world that could conceivably be changed from the one left behind," said analysts at U.S. energy consultancy Cameron Hanover.

For more: CBC News - Money - Oil rises on Mideast turmoil

Turmoil In France Largely Due To Economy

France has been in turmoil over the past two weeks. Hundreds of thousands have taken to the streets to protest the government's economic policy. President Nicolas Sarkozy is involved in a shouting match with the EU in Brussels over his crackdown on the Roma, the French gypsy community. And the huge Muslim community also feels picked on. This week, the French parliament voted to ban traditional Islamic dress that covers the face.

For more: Turmoil In France Largely Due To Economy : NPR