This week, crude oil prices fell on the news of sinking petroleum consumption, with oil futures at the New York Mercantile Exchange down more than 5 percent to below $38 a barrel. While this news sounds like music to the average driver worldwide, it has been a nightmare for oil producing countries, especially those in the Middle East.
Just less than a year ago as oil prices soared, Arab Gulf countries were the envy of wealth-seekers across the globe. Once hailed as the economic superpower of the Middle East, Dubai in the United Arab Emirates is now looking like a ghost town.
Hundreds of billions of dollars worth of property projects have been scrapped or postponed in the United Arab Emirates, Saudi Arabia, and other Gulf countries causing major layoffs across most sectors. Foreigners, who make up 80-90 percent of the population in places like Dubai and Abu Dhabi, have been on the receiving end of the inevitable layoffs. Without jobs, these ex-workers lose their work visas and then must leave the country within a month.
According to local newspapers, thousands of cars sit abandoned in the parking lot at the Dubai Airport and others, left by fleeing, debt-ridden foreigners. Many of those foreigners are Arab nationals from countries such as Egypt, Syria and Lebanon.
The petro-bonanza has come to an end.
Unemployment is at its highest and most dangerous levels in the Middle East with some estimates putting it as high as 15 per cent. According to Amat Alsowa, the head of the UN Development Program's regional office, the average unemployment rate is 15 per cent in the Arab world, "but it reaches 40 per cent among people between the ages of 15 and 24, totaling 66 million out of the total Arab population of 317 million.
To travel through the Arab world right now is to experience a mood of disgruntlement and doubt, especially amongst those under 30. One of the countries hit the hardest is Egypt, where according to the World Bank, 20 percent of the population of 78 million lives under the poverty line of two dollars a day. Egypt's economic growth rate could fall by 50 percent in the current fiscal year, as the global financial meltdown pummels Suez Canal and tourism revenues -- two financial mainstays for the Arab world's most populous nation.
Last year, rising food and oil costs prompted a wave of discontent across Egypt. People have been killed in fights that broke out over bread shortages in bread queues. More than half a million Egyptians earning their living abroad are expected to return to Egypt by the end of 2009, adding more burden to the already faltering Egyptian economy.
Along with the several already troubled spots in the Arab world, such as Iraq, Lebanon, Palestine, and Algeria, it seems that this present dangerous level of unemployment will certainly engender political, social and economic disorder in many other Arab countries as well.
Jamal Dajani produces the Mosaic Intelligence Report on Link TV