We are living in remarkable times at the moment – remarkably exciting or remarkably frightening, depending on how things go over the next few weeks and months.
I have been wanting to write a column about this, however, I managed to allow my subscription to The Economist to lapse. As such, I have not seen Thomas Friedman’s call on the situation, so I am somewhat reluctant to express an opinion. I will try anyway.
Recall in recent decades, we have seen the collapse of the Soviet Union without a shot being fired, sort of, as well as the fall of the Berlin Wall – two events never dreamed of in our collective imagination. And now, it is beginning to look like we may very soon see another seismic shift – the fall of some or many of the remaining oligarchies, those countries ruled by tyrants and/or their royal families. What happened in Egypt seems to be picking up steam. It is spreading, and we are on the brink of -- well, I guess we may soon see. The world may gain a number of new and legitimate democracies, or we may see an increase of extreme theocratic regimes bent on the destruction of the West and the ascension of radical worldwide Islam.
There is a transition in process. Against all odds and contrary to historical precedent, the “overthrow” of the Egyptian government has been relatively orderly and nonviolent – a bloodless coup facilitated by the masses and executed by the military. We have not seen the catharsis of mass executions by firing squads, or the ascension of an extreme and venomous anti-Western theocracy that came to pass in Iran with its revolution. Right now, it appears that Libya, Bahrain, Yemen and possibly other countries of the Middle East and North Africa are at risk. If a change occurs in these countries, it may occur smoothly as it so far has in Egypt – or not. The existence or absence of a significant and educated middle class as is characteristic of Egypt may be one of the critical factors in determining how these transitions go. Unfortunately, more countries in play do not have an established middle class than do - and that is a problem for the West.
Historically, we have had the bad habit of supporting any form of government that was opposed to Communism, even when that government was essentially a dictatorship in some form – Iran with the Shah, Cuba with Batista, Uruguay with Stroessner, Chile with Pinochet, Saudi Arabia with the al-Saud family and so on. So new regimes – if there will be new ones – are not, by default, inclined to be pro-Western.
The Internet seems to be the primary driving force behind this change – Twitter, Facebook, YouTube. Access to information and connectivity seem to be the spark and the fuel for this fire that has the potential to consume – or save - the Middle East. This is the good and the bad news. The potential for change that brings with it more freedom and better lives for large numbers of people is great. The fact that the change factor is the Internet – something that we cannot control and that has a life of its own – may be the bad news. Either way though, there is probably no turning back at this point.
So why should you care? I have been struck by how removed and disconnected most people seem to be from the events taking place right now. Truth be told, I am stunned. We have never before in history been faced with change of the potential magnitude and that can take place with such incredible speed as we are today – right now. The only comparison that comes to mind is a world at war. The primary difference at the moment is that large numbers of people are not dying. But the magnitude of the events and the potential for change are of the same scale.
So, you should care, because the probability is relatively high that the events occurring on the other side of the world will directly affect you. Oil is in play, and so is the status quo and “order”. If you think that those “problems over there” that have been largely staged by the Internet will not spread over here, you are probably quite wrong.
Personally, I am cautiously optimistic that the current situation may pass in a manageable fashion. However, if it does not, before they start rioting in Riyadh, make sure that your gas tank is full and that you have stop-losses in place in your stock portfolio. And in the longer vista, be concerned about the 800-pound gorilla in the room that we all need to worry about. That is, what could happen if the change in Egypt and possibly other countries in North Africa and the Middle East, happens in China – but not so successfully.