Mgt112 Middle East
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  • politica
  • Sources:http://www.theatlanticwire.com/business/2011/01/how-egyptian-unrest-could-unravel-economic-recovery/21299/http://www2.standardandpoors.com/spf/pdf/media/Sovereign_Rating_Impact_MENA_03_Mar-11.pdf
  • http://www.economist.com/node/18332638?story_id=18332638
  • http://www.wellington.com/Our_Clients/Client_Resources/MiddleEastUnrest.pdf
  • Photo: http://www.cnbc.com/id/41276120/Scenes_From_The_Middle_East_Protests_2011?slide=9Content:FT:http://www.ft.com/cms/s/0/1947d1f2-436a-11e0-8f0d-00144feabdc0.html#axzz1GRMwahDGWellington:http://www.wellington.com/Our_Clients/Client_Resources/MiddleEastUnrest.pdf
  • http://www.oxfordeconomics.com/free/pdfs/mideaststudy.pdf
  • http://www.brookings.edu/opinions/2011/0304_arab_democracy_kimenyi.aspxhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/04/23/000333037_20080423234629/Rendered/PDF/433720SR0WHITE11PUBLIC10YPN1English.pdfhttps://www.cia.gov/library/publications/the-world-factbook/geos/xx.html
  • www.brookings.eduhttp://seekingalpha.com/instablog/164524-michael-mcdonough/141111-modified-misery-index-oil-exports-at-risk

Mgt112 Middle East Mgt112 Middle East Presentation Transcript

  • Revolt & Revolution in the Middle East
    Karen ZhangRichard La
    Benjamin Rodriguez
    Thomas Duzan
    MGT 112 | Professor Soma
    Winter 2011
  • Overview
    What’s going on
    Politics & Economics
    Oil
    OPEC
  • Unrests in the Middle East and North Africa
    Overall Report
  • Tunisia: Jasmine revolt
    Initial uprising, sparking protests in other countries
    Roots: unemployed man set himself ablaze, causing protests in all the country
    Complaints about high unemployment, corruption, rising prices and political repression
    Results: Autocratic President Zine El Abidine Ben Ali leaves the country on January 14, after 23 years.
    Now: Mr Essebsi unveiled a new interim government
  • Egypt
    Began on January 25 at Tahrir Square.
    Demonstrations against police corruption and abuses, lack of free elections and economic issues, such as high food prices, low wages and high unemployment.
    Led to the removal of Hosni Mubarak from power on February 11, after 30 years in power.
    Now: Essam Sharaf is the new leader, after the resignation of Ahmed Shafiq
  • Lybia
    Began in February
    Roots: lack of freedom, high unemployment rate, violation of human rights
    Rebels and Moammar Gadhafi’s military forces are fighting, causing deaths of civilians
    International leaders all condemn Gadhafi but can’t decide whether to act militarily or not
    A no-fly zone over Lybia is discussed
  • Other countries
    Common roots: lack of political and speech freedom, corruption, high unemployment, call for reform and democracy
    Demonstrations in Yemen, Bahrain, Saudi Arabia, Morocco, Iran
  • Political & Economic Impact
  • Within MENA
    Middle East & North Africa
    Increase G;
    GDP = C + Inv + G + NE
    Increased national debt (excl. Saudi Arabia)
    more freedom in contracts / hiring decisions
    t
    Lower economic output  GDP
    Pressure on fiscal budget
    Bahrain & Kuwait: 1-time payoffs to leave demonstrations
    Saudi Arabia: wage rate increase 15%
    Kuwait: free food for 14 months
  • Globaloutlook
    Companies
    Consumers
    Oil
    Economic Growth
  • government contracts
    multi-nationals
    indirect business
    dependencies
    Companies
  • existing increase in food
    prices + inc oil prices
    impact spending &
    • growth
    Consumers
  • stagflation
    = -GDP & inflation
    eurozonedebt
    emerging markets:
    inflation & decreased output
    Economic
    Growth
  • short term & localized
    persistence in North Africa
    persistence through ME
    Economic
    Growth
  • Politics
    “Arab Paradox”
    Government
  • “Arab Paradox”
    Human Development Report: 83 “high development” countries – 64 are democracies
    “demographic bulge” – very young population
    high unemployment (~25%) vs. 8% worldwide, event amongst well-educated
  • influence of Islam – Iran (heavy) or Turkey (moderate)
    Government
  • Oil
  • Disruptions in Middle East and oil supply
    • Too many disruptions in Middle East during history:
    • Last disruption in the Middle East:
    • 2003 Invasion of Iraq (Iraq War)
  • Disruptions in Middle East and oil prices
  • How the present Middle East civil unrest is affecting oil supply?
    If Egypt is not a major oil producer how their situation can affect?
    • By its Location
    • By its Influence (For Example: Libya)
    Obvious consequence:
    Spike in Oil Prices!
  • Possible impacts on US Industries
    Increase in Transportation Costs
    People/firms wait to see how permanent change in price is
    • Delay purchase of automobiles
    • Other energy using consumer durables
    • Delay new buildings
    • Delay new energy intensive plant and equipment
  • Oil Reserves
    Oil Reserves – A region’s amount of crude oil that can be extracted using current technology
  • OPEC Overview
    "Organization of the Petroleum Exporting Countries"
    Twelve developing countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela
    Collectively hold 79% oil reserves and 44% production
    Competitors: OECD have reserves of 23.8% and produce 14.8% of oil
    OPEC Nations
    OPEC Goals:
    • Determines oil production and prices
    • Stabilizes prices in international oil markets with a view of eliminating harmful and unnecessary fluctuation
    • Provide regular supply to consuming nations
  • 2010 Civil Unrest in OPEC nations
    OPEC nations + Top Oil Reserves:
    Iraq, Iran, Kuwait, Venezuela, United Arab Emirates, Libya, and Nigeria, Saudi Arabia
    OPEC nations + Top Reserves + 2010 Civil Unrest:
    Kuwait, Libya, Iraq, Iran, Saudi Arabia
  • OPEC Oil Prices
    Question: Why are prices rising?
    Answer: Fear
    Major oil transit “choke points”
    OPEC’s next meeting is in June 2011 at Vienna
    Risk Premium
    Oil Minister of S.A. says the “spike in oil costs stems more from financial speculation and unwarranted investor sentiment than industry fundamentals.”
  • Questions?
  • Thank You