| 24/02/2011 | Economic predictions for the middle east: Saudi Arabia next?
Will Peters
David Murrin, the CIO of Emergent Asset Management has some interesting and striking observations about the widespread political unrest pervading the Middle East and North Africa.
Having very recently published a book “Breaking the Code of History” which looks closely at the rise and fall of empires and forecasts the geopolitical risks facing the world in coming years he raises some important issues in the attached media release some of which I highlight below. He says the current unrest is far from benign and is set to deepen into ‘regional civil war’.
As well as civil war between Sunnis and Shias, there will be a conflict within a conflict to determine Sunni leadership says Murrin.
Here are his economic predictions in light of the current crisis:
- The crisis will have serious implications for Western foreign policy since the leadership that will come to reign in the region will not be pro-Western
- Middle Eastern crisis will lead to an ‘energy shock’ for the West, increasing stagflation
- Oil prices to rise to as much as $200
- China to become closer trade ally with oil-rich Sunni regions as well as Iran
- The crisis will burst the QE2 bubble and shatter illusion of recovery that the US is trying to portray, sending equity markets into a destructive bear decline of some 30%
Emergent’s geopolitical investment standpoint steers it clear of investing in Northern Africa, despite being a strong proponent of the Sub-Saharan region, especially those within SADAC and Murrin argues that the Islamic North will ultimately bifurcate with the predominantly Christian Sub-Saharan region
- Next country to experience mass protests is likely to be Saudi Arabia
- Shekel set to depreciate rapidly by up to 40% in the next year
The Economy News (Reino Unido)
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