BBC News October 23, 2008
Summary: Economists survey the Middle East’s challenges of their global financial system. Robert Mabro, an energy economist and former director of Oxford Institute for energy studies, comments on the challenges that the Middle East will face, if they are not already. It is said that such crises like financial and associated recessions affected by the rest of the world will not affect Middle East but Mabro argues against that notion. Mabro distinguishes the rich and sought after lands of the Gulf countries from poorer countries, like Iran and Egypt, who lack such riches. The Gulf countries, however, are predicted to lose drastic amounts of oil revenues due to the decreasing price of oil. Right now, the majority of the Middle East depend on its oil supply and revenues to support their country. The majority of the Gulf countries will only be able to balance their budgets by selling a barrel of oil for $60-$70. There will be no more surplus revenues anymore. Looking at stock market trends, it shows that indices have been falling in the Gulf by as much as 40%. Mabro says the wealthy will not be as badly affected than the middle class. He predicts that Egypt will lose oil revenues as well as gas revenues. This drastic decline in Egypt’s economy will make Egypt poorer. This example goes to show what will eventually happen to the Middle East.
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Pam, thanks for your very helpful summary and for the link to this important piece!
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