The document discusses 7 metrics that fuel Arab youth revolt: price rise, corruption, income disparity, unemployment, repression, external (NATO) support, and internet/mobile media support. It analyzes how each of these factors contributes to social unrest in Arab countries and could potentially spread revolt to other regions. High commodity prices hit the poor hardest and fuel food riots. Corruption creates unequal opportunities and dissatisfaction. Unemployment, especially among youth and women, sparks anger at ruling governments.
2. What fuels Arab youth revolt? Price Rise : for it hurts the poor.
3. What fuels Arab Youth Revolt? Corruption For it creates unequal opportunities, and causes dissatisfaction.
4. What fuels Arab Youth Revolt ? Income Disparity between the rich and the poor
5. What fuels Arab Youth Revolt ? Unemployment for it creates anger against the ruling Government
6. What fuels Arab Youth Revolt?Repressionof dissent for it creates desperation
7. 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.
8. What fuels Arab Youth Revolt ? Internet and mobile communication Helping youth interact and learn about why and how to revolt and win freedom
21. Pension Funds, Sovereign Funds, High Net Individuals and the ‘Drug & Arms cartels’ investing in volatile financial markets.
22. 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
23. 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
24. Food riots hit Algeria, Tunisia , Egypt As per Egypt Daily News Food riots had spread to Algeria, Tunisia and Egypt by December 2010
25. UN Warns Of More Food Riots http://www.guardian.co.uk/business/2011/may/27/food-riots-warning-by-un-as-commodities-soar 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
26. 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.
27. 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.
28. 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.
29. Corruption is a key factor Corruption is a prime cause of social unrest
30. 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 .
31. 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. http://www.transparency.org/news_room/in_focus/2011/gcr_climate_change#downloads
32. Reasons of corruptionFinancial markets have created ‘super profits’ which is protected by a new class called ‘facilitators’
38. Bribery has been transformed into professional deal making
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41. 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.
42. 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.
43. 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 !
46. 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.
47. 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.
48. 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.
49. 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.
50. 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.
51. 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.
52. 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.
53. 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 .
54. 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.
55. 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.
56. 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 .
57. 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.
58. 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. Saudi
59. 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.
60. 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.
61. 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.
62. External Support for Libyan war Support has also included the continued heavy bombardment of Libya by NATO to wreck Qaddafi forces.
63. 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
64. Refugee influx Every day thousands of ravaged war widows and children create intense pressure on other neighboring states and parts of Europe .
65. 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.
66. 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.
67. 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.
68. 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.
69. Local wireless support Scores of local wireless stations operate across the world providing routes to communicate freely despite censorship.
71. 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
72. In Europe Greece is Facing Unrest Greece is facing unrest for price rise, corruption, income disparity, falling wages and unemployment
73. Revolt in Greece is brewing Greek unemployment and price rise is spiraling out of control
74. Greece Debt needs Restructuring EC support to Banks has stopped debt restructuring for the Greeks.
75. 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?
76. Angry Greece could Europe’s flashpoint If Greece is left to drown it could bring Europe to the edge like the Arab world
77. Portugal, Ireland and Spain are next Other Euro zone economies will also erupt over the time
78. 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% .
79. London Profits from Euro unrest London profits from Euro zone Capital Flight says Reuters . Investors flee from Spain and Greece.
80. Asia on the revolt watch list Corruption, Price Rise and income inequality in India and China has started demonstrations and unrest in several parts
81. China too is uneasy China has cracked down on demonstrations and unrest but fears more protests in future.
82. 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.
83. 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.
84. 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 .
90. Technorati San Francisco Follow me at www.twitter.com/ ecothrust Or my column What Happens If ? In Economic Times
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94. 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 http://blogs.economictimes.indiatimes.com/Whathappensif/entry/can-nuclear-risk-mitigation-be Follow us at twitter : www.twitter.com/ecothrust Acknowledgements: To Google, flickr photolibrary and other image sources. For any queries or request for download, mail to Sandip Sen sen.sandip@gmail.com