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Middle East – Country by Country Analysis
The crisis in the Middle east is intensifying and I have been bogged down for the past few days running between the office and the NY Traders Expo where Boris and I will be speaking this afternoon.
Many Wall St banks are publishing country by country analysis of the Middle East that is worth reading. Here’s a table from Nomura (click to expand), followed by a more detailed breakdown from Deutsche Bank. These guys know the Mid East better than me, so I’ll just defer to them:
Libya: Currently the most volatile of all the countries, it looks as if Gadhafi’s (ruler since 1969) regime is about to fall. Protests began in January when demonstrators, fed up with delays, broke into a housing project the government was building and occupied it. This was the spark and that combined with high unemployment fuelled protests that have become violent. The US’s role here is interesting -- Gadhafi has been no friend of the West historically but recently became an ally of sorts after publicly giving up his nuclear ambitions. Even if Gadhafi falls though, there is not much of a political opposition there after 4 decades of autocratic rule.
Bahrain: This is a tiny nation composed mainly of Shiite Muslims but ruled by a minority Sunni royal family. That in itself is a cause of tension and violence erupted after peaceful protestors were shot by a police and military crackdown. The question is whether the small population will be able to sustain protests for long enough to overthrow the government. Bahrain is a US ally and houses the headquarters of the US Navy’s Seventh Fleet.
Yemen: This impoverished country located south of Saudi Arabia has protestors up in arms over high unemployment, a shortage of water, government corruption, poverty and a lack of political freedom. Recently the country has been racked by a Shiite Muslim uprising, a US crackdown on terrorism, and a looming shortage of water. The death toll is rising there as the violence spreads and we could end up seeing the country split in two.
Iran: Its uncertain whether protests in Iran can actually reach the point where a regime overthrow is possible. In 2009, a revolution seemed like it was in the offing but was brutally suppressed by the ruling regime. The problem here is that the government has no issues with using violence and are largely immune to international and human rights pressures. Still as Iranians see what is happening in the rest of the region, they could easily be quelled into action.
Jordan: A key US ally, ruled by a King that is seeking reform. King Abdullah II swore in a new government and has made a mandate for political reform. This regime has a decent chance of surviving given that the King is not as unpopular as some of his brethren in the region.
Saudi Arabia: No real protests on the streets of Saudi Arabia but media sources state that the royal family is extremely worried that the US may not support in the event of a popular uprising. The main problem area for the Saudis is near its eastern parts (where a lot of the oil fields are located) -- these areas are dominated by Shiites who believe that they are treated like second-class citizens by the ruling Sunni regime.
Syria: As protests heated up around the region, the Syrian government pulled back from a plan to withdraw some subsidies that keep the cost of living down in the country. The country has been ruled under a state of emergency since 1963 and protestors are aggrieved by what they claim to be massive human rights abuses by the government. A planned “Day of Rage” against the government failed to materialize.
Palestinian Territories: Hundreds of Palestinians rallied for unity in Ramallah on Thursday, calling on Hamas, Fatah and other political factions to heal their rifts amid arguments over elections to be held in September. However, large scale protests have failed to materialize here showing that what we are seeing in the rest of the Arab world may not happen here as Palestinians continue to believe their issues are with Israel rather than the internal conflicts between Hamas and Fatah.
Algeria: A state of emergency was imposed here in 1992 to quell a civil war that led to the deaths of more than 150,000 people. The rule as used to clamp down on Islamist groups, but the critics say the insurgency has long since diminished and the law exists only to muzzle government critics. Protests erupted in January over high rates if unemployment, rising food prices and housing issues. The president said that he would lift the state of emergency law in what analysts say was an attempt to head of a revolt.
Iraq: Yes even Iraq which has a semi-democracy is facing protests. However, protestors here are not really marching against the national government but more because they are angry about corruption, a crumbling infrastructure