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Middle East socioeconomic trajectories are negative

Tuesday, January 3, 2017

Subject

Lower global oil prices contributing to new tensions in both oil-producing and oil-importing countries.

Significance

Rapid population growth in most Arab countries has resulted in a youth bulge and higher unemployment. Oil producers face an extended period of low global prices, forcing them to cut costs. However, reduced subsidies on basic services risk breaching the social contract by which these governments maintain stability with limited representation. Net energy importers, while benefiting from lower fuel costs, are also struggling to compensate for declining remittances and to create new job opportunities as migrant workers return from the cash-strapped Gulf.

Impacts

  • Long-term unemployment and economic crises will increase the flow of migrants to Europe.
  • Fragmentation and ungoverned spaces in Yemen and elsewhere will provide more space for jihadi groups to operate.
  • US withdrawal could give Russia opportunities to expand its regional influence.
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