Will arab youth revolt turn global
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Will arab youth revolt turn global



The 7 metrics of revolt will determine wether unrest can be controlled in a dictatorship or a democracy in the volatile global information age.

The 7 metrics of revolt will determine wether unrest can be controlled in a dictatorship or a democracy in the volatile global information age.



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  • Great presentation for great causes !!!!! Congratulations Sandip!!!! BRAVO . Bernard :-)))
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Will arab youth revolt turn global Will arab youth revolt turn global Presentation Transcript

    7 Metrics of Revolt
  • What fuels Arab youth revolt?
    Price Rise : for it hurts the poor.
  • What fuels Arab Youth Revolt?
    For it creates unequal opportunities, and causes dissatisfaction.
  • What fuels Arab Youth Revolt ?
    Income Disparity
    between the rich and the poor
  • What fuels Arab Youth Revolt ?
    for it creates anger against the ruling Government
  • What fuels Arab Youth Revolt?Repressionof dissent for it creates desperation
  • What fuels Arab Youth Revolt ?
    External (NATO) support
    by western alliance, NGO’s & individuals to install western style democracies and help facilitate better trade deals.
  • What fuels Arab Youth Revolt ?
    Internet and mobile communication
    Helping youth interact and learn about why and how to revolt and win freedom
  • 7 Metrics of Arab Youth Revolt
    • Price Rise
    • Corruption
    • Income Disparity
    • Unemployment
    • Repression
    • External (NATO) Support
    • Internet and mobile media support
  • Food Price Rise
    • Global food prices and agriculture commodity prices have spiraled
  • Price Rise of Crude Oil
    • Oil prices have skyrocketed pushing up energy and transportation costs
  • Price Rise of Metals
    • Metal and nonmetal commodity prices have been spiked since Nov 2010
  • Manufacturing Goods Price Rise
    • The price rise has a cascading effect on global manufacturing & distribution costs
  • Price Rise is the prime metric of revolt
    • The poor have been hit the hardest by the multiplier effect of commodity price hikes
  • What Fuels Price Rise ?
    • When Demand Exceeds Supply
  • What Fuels Price Rise ?
    • Natural calamities and crop failure
  • What Fuels Price Rise ?
    • Supply disruptions due war and unrest
  • What Fuels Price Rise ?
    • Speculation in financial markets with Banks like Deutsche Bank, JP Morgan, Goldman Sachs, buying up commodities from physical traders and spiking prices for high profits.
  • What Fuels Price Rise ?
    As per Wall Street Journal a single trader backed by Wall Street Banks cornered over 80% of the copper traded at London Metal Exchange worth over $3 Billion in November
    • Cornering of commodity stocks in financial markets
  • What Fuels Price Rise ?
     In November 2010 the US Federal Reserve announced a $600 bn. Quantitative Easing package, that would pump $75 billion per month to boost liquidity in view of low U.S. demand. Markets have boomed thereafter as the excess liquidity found its way to the commodity markets
    • Liquidity infusion by US Federal Reserve
  • What Fuels Price Rise ?
    • Investment by Pension Funds, Sovereign Funds, individuals and hot money sources routed through Wall Street Banks.
  • 7 Reasons of price rise
    • Demand exceeds supply causing commodity shortage
    • Supply disruptions due to crop failure and natural calamities
    • Supply disruptions due to war and unrest
    • Demand surge due to speculation in commodity markets
    • Cornering of commodity stocks by Banks , hedge funds & traders.
    • The Federal Reserve monetary infusion.
    • Pension Funds, Sovereign Funds, High Net Individuals and the
    ‘Drug & Arms cartels’ investing in volatile financial markets.
  • Food Riots first began in Mozambique
    Sharp rise in food prices that followed hike in energy and water prices by the Government first started riots in Maputo in September 2010 as per a BBC report
  • FAO warns of high food prices
    The Poor Eat Wheat Not Meat
    FAO predicted in November 2010 that Food prices could rise by 20% in 2011 in food deficit countries. Speculators picked up the cue and pushed up prices by 50% in a month
  • Food riots hit Algeria, Tunisia , Egypt
    As per Egypt Daily News Food riots had spread to Algeria, Tunisia and Egypt by December 2010
  • UN Warns Of More Food Riots
    Near drought conditions in Russia, Ukraine and parts of Europe and extreme speculation in futures market caused UN to warn of food riots in the developing world as per a Guardian report
  • UAE freezes commodity prices
    To arrest price hikes UAE took the desperate move of freezing prices of 400 major commodities till Dec 2011. This may lead to subsidized supplies and increased speculation anticipating state buying.
  • Price cartels spike food prices
    Trade cartels pushed up prices of onions in India wheat, barley and maize in Egypt Tunisia and Kenya and processed foods and livestock in South Korea , Asia Pacific and the middle east.
  • Regulator tradernexus drives up prices
    Profiteering in the financial markets feeds the network of politician & regulators who allow unchecked speculation at commodity markets and trading cartels in local markets.
  • Corruption is a key factor
    Corruption is a prime cause of social unrest
  • Corruption is hurting globally
    Corruption is causing unrest not only in the Arab world , but also in Africa, India, China, Mexico, Indonesia, Russia, Italy, and Greece .
  • What Is Corruption ?
    Corruption is defined by Transparency International as the
    abuse of entrusted power for private gain.
    Entrusted power is not only the power a citizen confers to a public office holder.
    It is the power that future generations have vested in all of us, in our stewardship role for the planet. Hence the youth are so agitated about the abuse of power and corruption as it affects their future.
  • Reasons of corruptionFinancial markets have created ‘super profits’ which is protected by a new class called ‘facilitators’
  • ‘Facilitators’ help protect super profits
    • They include politicians & bureaucrats
    • They include regulators & administrators
    • They include middle men who help deal making
    • They include people from media, police, judiciary who help protect high profits .
  • The Corruption Gravy Train Feeds And Nurtures ‘Facilitators’ Legally.
    Facilitators are ‘priority’ like shareholders. They are today provided for, through legal Banking channels, to ensure financial markets can be run with high profits.
  • How Corruption Became OTC
    • Corruption is no longer clandestine and under the table
    • Bribery has been transformed into professional deal making
    • It is now institutionalized like a “Over The Counter” OTC trade
  • How corruption became institutional
    • Bribes today are paid out as fees, commissions, stocks, options, donations to political parties, NGOs, schools and educational institutes , and as consultancy assignments, research grants and even as bailout money.
    • It is professionally managed as any investment by Swiss Banks, Wall Street Banks , hedge funds and some of the best financial and legal brains in the world.
  • Corruption can’t be regulated
    Corruption as a business deal can be perfectly legal, because the vetting process to a private business deal can never be regulated and people framing such deals are experts in law.
    Corruption is now is too complex and sophisticated to stop or track and can’t be stopped easily.
  • Even if caught facilitators help easy ‘out of court settlements’
    As per Guardian UK, US regulators in March 2010 facilitated an out of court settlement of a modest $50million with Wall Street Bank Wachovia , now a part of Wells Fargo for channelizing 378.4 billion dollars of hot money from a Mexican cocaine cartel during 2006 to 2008. Wachovia escaped without admitting guilt.
  • One Way To Reduce Corruption
    One way to reduce the corruption is to make financial markets efficient.
    If Financial markets become transparent and competitive , the super profits from market volatility will vanish and the recycling of the gravy from the corruption gravy train will be much less.
  • How oil markets work
    Production Price of Crude Oil : $ 5 to $10 per barrel
    Oil producers like a margin of $50 to $60 per barrel to run their economies
    ( of this around $10 per barrel goes directly to the ruling elite )
    Refinery, blending, storage & transportation costs : $5 to $10 per barrel
    Margins for facilitating the deals $5 to $15 per barrel : Negotiated kickbacks
    Financial markets super profits $ 10 to $ 25 per barrel : oil majors + big banks
    Retail consumer price at pump $ 75 to $120 per barrel
    Now see the spin offs when 85 to 90million barrels of oil is produced daily !
  • The Economics of oil
  • How Banks Regularize Dirty Money
  • Arab nations have a larger share of profits when oil prices are moderate
    Oil producing economies have 2/3 of the oil pie when crude prices are moderate . Production costs considered at lower end of the band.
  • Banks & Oil Cos gain in volatile markets
    Oil producing economies have 1/2 of the oil pie when crude prices are volatile . Production costs considered at higher end of spectrum. Financial market players and facilitators gain most in volatile markets.
  • The commodity traders make most money from such volatility
    But when markets are volatile and oil price is high it is the financial markets and facilitators who gain most. As per a recent FT report the Switzerland based commodity traders Trafigura, Glencore, Vitol, Mercuria, Gunvor reported super profits in the first quarter of 2011 following the Arab revolt, besides the big Wall Street Banks and Oil companies.
  • How the Arab people got poor
    Arab nations are net importers of food, metals and manufactured goods, whose impact was much greater than the gains from oil.
  • Oil Prices Hold The Key
    Oil prices are still the key factor in global inflation as its effect on transportation and manufactured goods has a multiplier effect on prices.
  • OPEC can still save Arab Land
    If OPEC ramps up its oil production significantly for the next 3 summer months and oil prices stabilize, global inflation will taper off and ‘ Price Rise’ the key metric of Arab revolt will be neutralized.
  • Repression and food security
    Food and security are the primary needs of humans.
    Repressive regimes can keep people quiet as long as they are able to guarantee cheap food and secure living conditions under the autocratic regime.
  • Where Extreme Loyalty Is A Virtue
    Compliance in the Arab world is usually achieved by making extreme loyalty a virtue. Order, obedience and fear, are invoked in the name of the supreme leader . With prices going out of control, the order was destroyed .
  • Repressive regimes face challenges
    As the order was destroyed the Arab states and other dictatorships started facing major challenges, that saw a increase of violence and repression. New models of dictatorship may evolve over time.
  • Repressive regimes will innovate
    Regimes are likely to change methods of enforcement of law and order to tough policing on transparent but extremely stringent laws administered speedily by local authorities. The benevolent dictator will ultimately replace the autocrat.
  • High Income Disparity
    Income disparity is a major reason of dissatisfaction and dissent.
    In several oil rich nations the top 1 % of the population own, control or have access to 99% of the nations wealth. As per the Economist in Qatar one of the wealthiest nations of the world the richest receive 13 times of the poorest .
  • Unemployment sparks unrest
    In places like Egypt it was unemployment and sharp wheat price hike that created the major spark for revolt. Being the largest importer of wheat Egypt was the hardest hit after the crop failure in Russia and Putin’sban on wheat exports.
  • Unemployment for women
    Saudi Arabia and Bahrain among the richest oil states have 2% and 5% literacy rates for women. The unemployment rate for Saudi women holding university degrees is 78% as compared to 16.9 % for male graduates.
  • Unemployment for youth
    Since 2005 Saudi Arabia, Kuwait and UAE have been investing heavily in education and training . Despite investing over SR 150 billion in 2009 on education, 39% of Saudi youth aged 20-24 and 20.3% of those aged from25-29 were unemployed.
  • Private sector employs expats
    Migrant workforce enjoying global life style drives the core of the booming middle east oil economy from segregated expat enclaves . The private sector employs only 10% of the local youth primarily because of poor work culture, low skill and knowledge base of the locals.
  • External Support for democracy
    Western troops on ground in Libya reports Guardian to support rebel forces
    Active support by G7 Governments both tactical as well as monetary helps the Arab revolt gain momentum in a bid to usher in democracy.
  • External Support for Libyan war
    Support has also included the continued heavy bombardment of Libya by NATO to wreck Qaddafi forces.
  • Investors Flee To London from Mid East
    Billion of dollars of investment headed for the Middle East have been re-routed to London and Paris ever since the revolt broke out in Egypt
  • Refugee influx
    Every day thousands of ravaged war widows and children create intense pressure on other neighboring states and parts of Europe .
  • G8 Promises monetary support
    G8 nations promise monetary aid through the World Bank for Egypt, Tunisia and other nations who would be willing to adopt the western style of democratic Government as per Wall Street Journal.
  • Quid pro quo benefits
    A friendly Arab state would ensure commercially profitable trade deals. Both in the oil trade and as sellers of consumer products and arms , Anglo French Company’s would gain in the long run.
  • The internet and mobile support
    The people’s support to therevolt is much more potent than the NATO support and has been facilitated by co-ordination on the internet and mobile phones, that cannot be curtailed.
  • The internet and mobile support
    The educated Arab youth know that they are equipped with information and technology and can force changes on their closed society.
  • Local wireless support
    Scores of local wireless stations operate across the world providing routes to communicate freely despite censorship.
  • Is Revolt Viral ?
    Will the Arab Revolt Spread ?
  • It will depend on the metric
    Nations who have issues on the 7 metrics of revolt could face unrest.
    Only way out is to face and solve them
  • In Europe Greece is Facing Unrest
    Greece is facing unrest for price rise, corruption, income disparity, falling wages and unemployment
  • Revolt in Greece is brewing
    Greek unemployment and price rise is spiraling out of control
  • Greece Debt needs Restructuring
    EC support to Banks has stopped debt restructuring for the Greeks.
  • Banks want national assets of Greece
    Greeks are up in arms as Banks want it to sell its national assets like Parthenon and the Aegean islands. Would US sell the Statue of Liberty, India the Taj Mahal or France the Eiffel Tower under debt they ask?
  • Angry Greece could Europe’s flashpoint
    If Greece is left to drown it could bring Europe to the edge like the Arab world
  • Portugal, Ireland and Spain are next
    Other Euro zone economies will also erupt over the time
  • Unemployment in Spain
    Unemployment is a key factor for social unrest not only in the Arab world but also in the neighboring Euro zone. Thousands have taken to streets in Spain lately protesting against unemployment which is over 21% .
  • London Profits from Euro unrest
    London profits from Euro zone Capital Flight says Reuters . Investors flee from Spain and Greece.
  • Asia on the revolt watch list
    Corruption, Price Rise and income inequality in India and China has started demonstrations and unrest in several parts
  • China too is uneasy
    China has cracked down on demonstrations and unrest but fears more protests in future.
  • Corruption an election game changer in India
    After major scams erupted in India Anna Hazare started a fast unto death against corruption . The ruling party and allies were decimated in elections in Tamilnadu that nurtured the corrupt politicians.
  • Income Disparity in the US could be a election issue
    The Gini coefficient for income disparity is a extremely high at 45 for the US as per Economic Policy Institute data as against 34 for the UK and 36.8 for India. Could be an election issue.
  • Watch the 7 metrics
    Nations who want a peaceful existence in the information age must watch the 7 metrics carefully. Even democracies could face unrest and revolt and electoral defeat in its absence .
  • Author Profile
    A professional journalist and international business consultant I write for
    • CleanBiz Asia HK
    • Economic Times New Delhi
    • ISEdb Ohio
    • NewsCollective Stockholm/Mumbai
    • Suite 101 Vancouver
    • Technorati San Francisco
    Follow me at www.twitter.com/ ecothrust
    Or my column What Happens If ? In Economic Times
  • Other presentations by us
    Business Risk management Series
    Business Risk Case Studies Ba31http://www.slideshare.net/SandipSen/business-risk-case-study-ba31
    Business Risk Case Studies Ba32
  • Business Risk Case Study – Ba 33
    Risk Managing Oil Explorations ERM 03
    Asia’s Rainy Day Economics BA 41
  • What is Carbon – ERM-01
    Countering Peak Oil – ERM-02
    Risk Managing Turbulent Markets BA 41
  • References:
    WSJ, Business Week, Bloomberg, Financial Times, Guardian, Telegraph, mongabay .com, Reuters, Economic Policy Institute, Economist, WB data and Ecothrust.
    Our Blog : Economy to Ecology: Our goal is to help promote clean, safe and better practices in economy and ecology worldwide. Balanced, efficient and a little more sustainable.
    Kindle Blog Ecothrust ASIN: B0029ZAUAY
    For non kindle users : www.ecothrust.blogspot.com
    Our Blog at Economic Times : What happens If
    Follow us at twitter : www.twitter.com/ecothrust
    To Google, flickr photolibrary and other image sources.
    For any queries or request for download, mail to Sandip Sen