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Business

'Arab Spring 2011 and future uncertainties'

CROSS ROADS (Toward Philippine Economic and Social Progress) - Gerardo P. Sicat -

The Arab Spring of Discontent in 2011 began very unobtrusively. A market vendor in Tunisia burned himself to death in protest at the cruelty of his government. This self-immolation fanned public sympathy into a wild fire of outrage against Tunisia’s long ruling dictator and forced him into exile within weeks.

“Open social and political discontent.” Modern telecommunications – hand-sets, cable TV, internet and social media – further sparked this event seamlessly across countries in the Middle East. The similar cruelties and repressions that they felt against their own rulers resounded.

Discontent burst into open defiance of demonstrations that gathered quickly in public squares in country after country: from Egypt to Libya, Syria, Yemen, Bahrain, and other countries. Massive crowds in daily demonstrations forced Hosni Mubarak from his rule when the army intervened and pacified the crowds – temporarily.

Gadhafi’s defiance of dissent made him threaten demonstrators with elimination through military power. This led the United Nations, by Security Council resolution, to enforce air strikes (by France, Britain and the US) to disable mobile and superior Libyan military force from striking against its own citizens. Such intervention tilted the balance in favor of rebels who eventually ended Gadhafi’s rule with his capture and death.

“A volatile region with many flash points.” Since the end of World War II, the Middle East has been a politically volatile region with many flash points. The main political drama of massive oil resources which is the fuel of our current modern civilization, brought the world’s industrial powers as the third party in the drama.

Aside from the long standing social discontent triggered by political repression of dictatorial governments, there are other flash points that can trigger great uncertainties in this region.

“The Israeli-Palestinian conflict.” This is the mother of all the conflicts that simmer in the Middle East. Since the founding of Israel in 1948, the Palestinian issue of justice for themselves also had begun.

As a political question, the birth of Israel became a fact when many nations recognized Israeli independence after the Israel-Arab war of 1948. The Western Allies who won the Second World War and who had sympathized with the Jewish need for a state of their own in the land of birth of their religion gave them protection. But over the centuries before the birth of Israel, that land had become politically Arab-Muslim.

Through the modern period in which we live, this conflict has escalated and simmered. Before, the rhetoric was for the Arab nations to obliterate Israel. Today, Israel’s existence has been accepted as a reality, especially by Egypt and Jordan, which have recognized it.

The main issue today is to have a comprehensive settlement of the Israeli-Palestinian involving all the Arab nations and the birth of a new Palestine state. The devil however is in the territorial details over a small patch of land located in the city of Jerusalem which both sides claim as their religious center.

The 1967 Arab-Israeli war which Israel won with major gains of territories increased the negotiating power of Israel. It could trade acquired territory for political concessions. After Egypt’s Sadat recognized Israel and supported the peace process, territories that it lost were returned. Today, the main issue is how the boundaries of Palestine and Israel will be delineated with these territories as pawns for the grand bargain.

“Political succession issues in the Middle Eastern states.” The political systems in all the states of the region are essentially autocracies. They are one-man rules supported by a small clique, whether republic, kingdom, emirate, sultanate, or plain military dictatorship. The exception is Israel which is a viable democracy and perhaps Lebanon, which is one of the weakest states because it has been exhausted by a long and destructive civil war of its own.

The death of Gadhafi in Libya and the removal from power of Saddam Hussein (Iraq), Hosni Mubarak (Egypt), and Ali (Tunisia) only signal new uncertainties, not their end. It simply announces the beginning of internecine and unavoidable power struggles among the contending parties. Since these autocracies are without any stable rules of succession to guide them, the strong will eventually dictate the rules of the game.

And one question is who will define them? In the case of Iraq after Saddam Hussein, the transition was relatively quick. The American occupation of the country provided the supporting infrastructure for the framing of a constitution and the eventual choice of leader. In other countries that third process will not be available.

The most important succession problem in the region is just rising over the horizon. Last week crown prince of Saudi Arabia died. The current king is old and is very sick. This will be a grand issue in the near future? If it is not solved quickly by the small ruling clique in that kingdom, Saudi Arabia – the most important oil supplier in the region and the most powerful of the Arab states – could become the next area of uncertainty.

“Internal politics: settling political scores among victors.” The transition after the fall of a major leader is the most dangerous for a nation that had just become triumphant. The victors in uprisings will demand a place of power.

When a state disables its political dictator, what happens next? After the fall of Marshal Tito who ruled Yugoslavia – a country of many ethnic colors and traditions – the country broke up into several parts. After the fall of the Soviet Union, the different republics devolved to become independent states.

Picture just the case of Libya. When the transition government decides to apportion the rewards, some will be disappointed. Who knows what those who take over power will do? They were born and worked in governments in which the former dictator simply had his sway. Gadhafi kept Libya together under his tight grip because he did not tolerate dissent.

“Oil supply instability.” Whether oil is an outcome or a cause of these flashpoints is itself a big question. Oil supply stability is the main reason why Western powers are immersed in the politics of the Middle East.

When countries are at war, the price of oil increases but when peace reigns, it levels out. When the countries suffer internal political turmoil, the price of energy also follows the ensuing disturbances. In short, all the political uncertainties that happen in these countries affect the way in which the world’s expectations of oil prices will move.

If only a small percentage of the world’s supply of energy is taken away by political uncertainty, the impact on oil prices becomes disproportionately high. This is the lesson we all learn from the wars and the revolts and political instabilities of the countries in the Middle East where oil supply routes and the resource itself are located.

My e-mail is: [email protected]. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/

AFTER EGYPT

ARAB

GADHAFI

HOSNI MUBARAK

ISRAEL

MIDDLE EAST

OIL

POLITICAL

SADDAM HUSSEIN

SAUDI ARABIA

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