The upheavals in Tunisia and Egypt have alarming economic implications, given that three of the last five global recessions followed shocks in the Middle East that led to sharply higher oil prices, said Nouriel Roubini, an economist at New York University.
Writing in the Financial Times, Roubini said the recession that began in the autumn of 2008 was caused not only by the Lehman Brothers insolvency but also by the fact that oil prices had doubled in the previous 12 months.
While no one should feel any sympathy for rulers associated with corruption, poverty, high unemployment and inequality, recent experience of “free elections” and “democracy” in the Middle East has been sobering, Roubini wrote.
The U.S. invasion of Iraq has brought civil war and an unstable pseudo-democracy, now at risk of falling under the control of radical and Shia groups, he said.
Because of the latest turbulence, oil prices are close to $100 a barrel and more radical regimes in Egypt and Tunisia can’t be ruled out; meanwhile, the world economy is recovering only tentatively from its worst crisis in decades, Roubini concluded.
© Copyright 2017 Bloomberg News. All rights reserved.