tribal tensions and regional splits, the 33-year rule of the autocratic Ali Abdullah Saleh, its low per capita incomes, and what is thought to be the strongest Al Qaeda affiliate. Adding to the significance of what happens to Yemen is its position on the narrow Bab el-Mandab choke point, the entrance into the Red Sea, and its rugged 1,100-mile border with Saudi Arabia. The specter of chaos and violence in Yemen leads some Saudis to talk about the threat of having “our Afghanistan” on its frontier.
Altogether, unfolding events throughout the region had demonstrated that social instability had become a critical factor for energy security. In Libya protests turned quickly into a civil war that divided the country between rebels in the east and Ghaddaffi forces in the west. As Ghaddaffi’s forces advanced on Benghazi and what seemed likely to be a bloodbath, the Arab League called for a no-fly zone, and U.S. and European forces, operating under U.N. and NATO authorization, intervened on the side of the rebels.
By March of 2011, virtually all of Libya’s oil production was disrupted, removing about 1.5 percent of supplies from the market. But that, combined with rising demand, started to narrow once again spare capacity. As unrest and turmoil continued in the Middle East, anxiety rose about the potential for further disruptions to supply. Oil prices surged once again both on the actual disruption and on fear of “what would happen next,” taking the Brent price at least for a time, toward $130 a barrel. The rising oil prices were now seen as the biggest risk to global economic recovery. And, as long as there was uncertainty about the Middle East, oil prices would reflect the risk premium. Thus, the social foundations and the now uncertain geostrategic balance of the region would prove to be crucial in the formation of world oil prices, which in turn would have much wider impact.
Yet there is no single answer to how the uncertainty will be resolved. The differences among the countries in the region are very great. Egypt, like Iran, has about 80 million people, and per capita income in Egypt is about $5,800 a year. By contrast, many of the key oil producers have small populations; depend on a large number of expatriates to make their economies work; and are, in effect, cradle-to-grave welfare states with high per capita incomes.
What all the countries share, whatever their differences, is an enormous youth bulge. About a third of the population in the region is between the ages of ten and twenty-four. Historians have observed, going back to the European revolutions of 1848, the link between such bulges and turmoil and upheaval. In addition, what these countries lack is jobs, especially for frustrated and educated young people. Unemployment may range as high as 30 percent, and many of those who are not unemployed are underemployed. In addition to disappointed expectations and economic difficulties, the mass lack of employment feeds smoldering resentment against the governing system for all the reasons already noted.7
What made the critical difference was the galvanizing power of new communications technologies, which eroded the control of information that is so essential to authoritarian regimes. The development of Arab satellite networks, beginning in the 1990s, was already bringing both views of the outside world and domestic news that was not censored by the ministries of information. For many, these networks became the most important source for news. But then cell phones and the Internet—in particular e-mail, Facebook, and Twitter—provided a way to share information, mobilize for action, and outwit the traditional instruments of control. Lack of political participation was offset by participation through these new channels, as social networks came to challenge the traditional prerogatives of national sovereignty.8
It has been recognized for years that creating opportunity and jobs is a challenge in much of the Middle East, owing both to rapid population growth and the nature of the economies. This need has now gone from chronic to acute. But industries like oil and gas and petrochemicals are capital intensive; that is, they create good jobs but not a lot of jobs. This is where countries face the risk of the resource curse and the structural problems of the petro-state. That applies even to the wealthy petro-state that can provide cradle-to-grave welfare. These industries are so big and so dominant that an entrepreneurial economy gets squeezed out. Subsidies can ease the tensions, but they are not a substitute for job creation.
THE MIDDLE EAST YOUTH BULGE
Percentage of the population 29