Dry spring 3

The revolutions in the Arab states of North Africa have not been a success by any definition. Want is spreading: there could be mass starvation. Refugees are scattering eastward and northward by the hundreds of thousands.

As the disaster deepens, Italy has begun to feel the effect. Turkey is bracing for it.

Years of corruption are bringing their ineluctable results with the devastating force of an economic tornado.

Spengler writes at the Asian Times online:

I’ve been warning for months that Egypt, Syria, Tunisia and other Arab oil-importing countries face a total economic meltdown … Now the International Monetary Fund (IMF) has confirmed my warnings.

The IMF, remember, is a socialist institution whose prosperity-destroying work is to redistribute wealth globally.

The leaders of the industrial nations waited until last weekend’s Group of Eight (G-8) summit to respond, and … President Barack Obama proposed what sounds like a massive aid program but probably consists mainly of refurbishing old programs.

The egg has splattered, and all of Obumpty’s horses and men can’t mend it. Even the G-8’s announcement was fumbled; Canada’s Prime Minister Stephen Harper refused to commit new money

Stephen Harper is one of the very few principled leaders in the world at present.

The numbers thrown out by the IMF are stupefying. “In the current baseline scenario,” wrote the IMF on May 27, “the external financing needs of the region’s oil importers is projected to exceed $160 billion during 2011-13.” That’s almost three years’ worth of Egypt’s total annual imports as of 2010. As of 2010, the combined current account deficit (that is, external financing needs) of Egypt, Syria, Yemen, Morocco and Tunisia was about $15 billion a year.

What the IMF says, in effect, is that the oil-poor Arab economies – especially Egypt – are not only broke, but dysfunctional, incapable of earning more than a small fraction of their import bill. The disappearance of tourism is an important part of the problem, but shortages of fuel and other essentials have had cascading effects throughout these economies.

“In the next 18 months,” the IMF added, “a greater part of these financing needs will need to be met from the international community because of more cautious market sentiments during the uncertain transition.”

Translation: private investors aren’t stupid enough to throw money down a Middle Eastern rat-hole, and now that the revolutionary government has decided to make a horrible example of deposed president Hosni Mubarak, anyone who made any money under his regime is cutting and running. At its May 29 auction of treasury bills, Egypt paid about 12% for short-term money, to its own captive banking system. Its budget deficit in the next fiscal year, the government says, will exceed $30 billion.

And the IMF’s $160 billion number is only “external financing”; that is, maintaining imports into a busted economy. It doesn’t do a thing to repair busted economies that import half their caloric intake, as do the oil-poor Arab nations.

Egypt’s economy is in free fall. …

Of course, the IMF’s admission that Egypt, Tunisia, Syria and Yemen can’t meet the majority of their import bill without foreign aid does not increase the probability that these countries will obtain financing on that scale. On May 30, the IMF announced that it would lend $3 billion to Egypt – a tenth of its budget deficit – sometime in June. The G-8 offered the grandiose pledge of $20 billion in their own money along with $20 billion from the IMF, World Bank, and so forth, to support the “Arab Spring”, with the dissension of the Canadian prime minister. But it is unclear whether that represents new money, or a shuffling of existing aid commitments, or nothing whatever.

Whatever the Group of Eight actually had in mind, the proposed aid package for the misnomered Arab Spring has already become a punching bag for opposition budget-cutters.

As it must and should.

One American politician asking the right questions is Sarah Palin:

Should we be borrowing money from China to turn around and give it to the Muslim Brotherhood?” Sarah Palin asked on May 27. “Now, given that Egypt has a history of corruption when it comes to utilizing American aid, it is doubtful that the money will really help needy Egyptian people. Couple that with the fact that the Muslim Brotherhood is organized to have a real shot at taking control of Egypt’s government, and one has to ask why we would send money (that we don’t have) into unknown Egyptian hands.” …

Last month, rice disappeared from public storehouses amid press reports that official food distribution organizations were selling the grain by the container on the overseas market. Last week, diesel fuel was the scarce commodity, with 24-hour queues forming around gasoline stations. Foreign tankers were waiting at Port Said on the Suez Canal to pump diesel oil from storage facilities, as government officials sold the scarce commodity for cash. …

Syria is also vulnerable to hunger, the UN’s Food and Agriculture Organization (FAO) warned May 23. “Continuing unrest in Syria will not only affect economic growth but could disrupt food distribution channels leading to severe localized shortages in main markets,” according to the FAO. ”Syria hosts one of the largest urban refugee populations in the world, including nearly one million Iraqis who have become more vulnerable because of rising food and fuel prices.”

Nearly 700,000 Libyan refugees have reached Egypt, fleeing their country’s civil war. At least 30,000 Tunisian refugees (and likely many more) have overwhelmed camps in Italy, and perhaps a tenth of that number have drowned in the attempt to reach Europe. A large but unknown number of Syrian refugees have fled to Lebanon and Turkey. …

Turkey fears a mass influx of Syrian Kurdish refugees, so that “Turkish generals have thus prepared an operation that would send several battalions of Turkish troops into Syria itself to carve out a ‘safe area’ for Syrian refugees inside Assad’s caliphate.” The borders of the affected nations have begun to dissolve along with their economies.

It will get worse fast.

  • George

    How can a bunch of third world 7th century throwbacks have such power and influence over us ?  One radio conservative talk show host stated—-     ” If you want to supprt terrorism , just go fill up your car “.     Where do these terrosrists get the money to buy their weapons, bombs , and technology machines ?  The answer :     They get it from the money we stupid fools in the west send them for their OIL .  We need to be drilling here in America and we do indeed have plenty of oil rich grounds both on the mainland and offshore and we would NOT be dependent upon people who want to kill us . We buy their oil and in turn , they use the money to buy weapons and bombs to use against our troops , allies and innocent citizens everywhere.
                              These towel heads don’t have any industry over there . These ragheads don’t have any industrial infrastructure or manufacturing plants to build anything.  Where do they get the money ?   They get it from us . They get it from selling us THEIR oil and which finances  their terroristic  factions.  That’s where they get the money from.  If we become so totally dependent on foreign oil and then they decide to STOP selling us oil and/or sell the oil to our enemies then this becomes a threatening position that puts us at a loss and puts our national security and sovereignty at serious risk. Not only that , but it puts our economy in danger and it creates chaos in how our society functions.  Why are the politicians allowing this to happen ?   Obviously we have these anti-American screwballs in office who are NOT standing up for America and what is best for  America but they certainly have the  American public hoodwinked. Why is it that certain people cannot see and understand the obvious unless it’s because they actually want these bad things to happen ? Why are so many people so naive, brainwashed , ignorant and gullible ?

  • Andrew M

    Agree with the whole article except for the Canadian PM’s name – it’s Stephen Harper.

    • Jillian Becker

      Thanks, Andrew M. 

      I didn’t notice the error – a “senior moment”. 

      As you see, I’ve corrected it.