Post Libya -We’re not Done Here!
It’s been less than six weeks since the start of the Libyan uprising, two months since Egypt’s Internet Intifitadah, and distressing headlines continue from all over the region. There is no doubt that there is room for significantly more liberal human rights, but also that each country has a different set of political, social, and other issues which play into the nature of dissent and the likelihood of major economic disruption with global effect. My view of economic risk has somewhat hardened in the last month, as, despite fatal confrontations in Bahrain, Yemen, and Syria (at least!), there has been (a) no disruption in energy related economic activity, (b) nearly no energy-related terrorism, (c) a move to resume shipment of some Libyan oil, aided by an ex-Libya entity, (d) further reform-related programs by Saudi Arabia and Yemen, and (e) Egypt held elections. I’m not demeaning the likelihood of ongoing protest and the need for major change, but most analysts with experience in the region point to the unique characteristics of countries with ‘local leadership — Saudi, Jordan’ versus outsiders (Bahrain), as well as institutional structure (Saudi, Egypt) versus less organized ‘countries, (Yemen, Syria, Libya). Call me crazy (but not an expert on all matters Middle Eastern), but although I expect continued news/headline risk, I think energy-related risks have been over-discounted in $115 Brent prices. No forecasts are guaranteed, including this one.