Two so called “Days of Rage” have been etched in the month of March in Saudi Arabian calendars. One just passed without major upheaval, but with a high level of intervention by interior security forces and imams advising followers not to take to the streets in protest.
These scheduled protests are bookends to a 10 day period that could determine the future direction of the region. The most intense calls for change are coming from the Eastern Province, which has the largest Shiite population. How these protests are managed take on greater weight since the province borders Bahrain, where the decibel levels of protest remain very high. One should not forget that a fifth of the global oil reserves rest under the sands of Saudi Arabia as well.
The battle for the future of Libya has naturally taken the collective eyes of the media off the struggle for change in Tunisia, Egypt and Bahrain. This is where, as many regional analysts and business leaders rightly state, the hard work begins. We will soon find out if reforms - political and economic - will be watered down or if the government cabinets will be more responsive to their populations.
The knee-jerk reaction so far has been to throw money at the problem in an attempt to buy peace. That is exactly what we are seeing in the six states of the Gulf. Foreign ministers of the region inked an agreement to supply $10 billion each for Bahrain and Oman in the hope of sending the signal to protestors that governments can take action.
The largest economy in the region, the most populous in the Gulf and the producer of nine million barrels a day of oil wants to lead that effort. A month ago, King Abdullah returned from convalescing in Morocco and quickly announced a package of $36 billion to address the neediest in the country. Poverty remains surprisingly high with such oil wealth underground. Official unemployment is just above 10 percent, amongst the country’s youth it is more than double that.
This short-term package of spending follows a five-year, $400 billion plan to beef up education, housing, as well as building four new economic cities from scratch - each with a population of one million or more each. Introducing new cities will also introduce a wave of change - something the King was eager to do to speed up economic reforms. It is not clear at this juncture if there is the continued will to do so by those who will need to see this through. The King and the Crown Prince are well into their 80s and Prince Nayef who has been Minister of Interior for 40 years is 77.
With this backdrop, regional chief executives are trying to navigate their bottom lines for the near term and want to see that there will be continued growth based on this young, but rightfully restive population.
Saudi Arabia represents half of infrastructure group Drake and Scull’s $2.1 billion order book. Chief Executive Khaldoun Tabari does not see a letdown on spending by Riyadh over the next four to five years. He described government outlays as “humongous” by any measure.
The spending might solve a medium-term problem, but in this climate it is managing near-term expectations which will prove difficult.
Asset advisor Saud Masud candidly notes that, “We don’t know what Saudi can deliver even if it wanted to,” since constitutional monarchies and other monumental shifts don’t happen overnight. And there is always a danger of backsliding. These governments have been pursuing economic reforms for the better part of seven years.
Economist Turker Hamzaoglu of Bank of America Merrill Lynch is expressing publicly what many are muttering privately, “I have some doubts that liberal policies will rule the day going forward.”
(CNN) - Japanese stocks closed down 10.55 percent, recovering from deeper losses earlier in the session, as the nation grappled with a crisis at an earthquake-damaged nuclear power plant and the aftermath of last week's earthquake and tsunami.
It was the third steepest percentage fall in the Nikkei's history.
At one point, the Nikkei plunged more than 1,390 points, or more than 14 percent, nearing the worst-ever plunge of 14.90 percent on October 20, 1987, after the U.S. stock market crash on Black Monday.
The close at 8,605.15, combined with the 6.2 percent drop on Monday, the first full trading day after the quake, marked a nearly 17 percent drop in two days.
A few hours earlier, Prime Minister Naoto Kan said the risk of further releases of radioactive material from the Fukushima Daiichi nuclear plant remained "very high."
The Tokyo market had opened shortly after the owner of the Fukushima Daiichi nuclear power plant in northeastern Japan reported an "explosive impact" at the plant's No. 2 reactor, a day after a hydrogen explosion rocked another reactor.
The plant was among the many structures damaged or destroyed by the 9.0-magnitude earthquake and subsequent tsunami.
The death toll following the quake has risen to 2,475, authorities said, with at least 3,118 people missing. The Kyodo News Agency said that doesn't take into account reports of thousands of bodies in one northeastern prefecture. More than 450,000 people are reported homeless.
Other Asian markets were also down markedly, a day after modest gains in the face of the Japanese sell-off. Hong Kong's Hang Seng index was off 3 percent in afternoon trading.
U.S. markets were set for a lower open. S&P and Dow futures were lower by 0.6 percent, while Nasdaq futures were down 0.8 percent.
World markets finished generally lower Monday as investors assessed the impact of the Japanese disaster on the global economy.
In the United States, the Dow Jones industrial average slid 51 points, or 0.4 percent. In Europe, Britain's FTSE-100 ended down 0.9 percent, with France's CAC-40 and Germany's DAX both more than 1 percent lower.
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