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Discusses a formula to predict new areas of social unrest in the the developing world.
There are some including the IMF, as well as a cadre of preeminent central bankers and economists, who have pegged the true cause of the current financial crisis as trade imbalances which left the world awash in too much currency–the effect of which lowered rates on investments and fueled significant “fat tail distributions” (or bubbles as they are called these days), etc., etc., etc., ad nauseam, ad infinitum, and add any other Latin term you may wish to substitute. This is a limited view of significant if not ridiculous proportions: however, it contains at least a modicum of truth. But let’s briefly look at the real “imbalance” problem, which if not handled, threatens the entire geo-political landscape.
In an earlier Post on this website entitled, Speculative Economics…, Section IV. , a few countries are represented in terms of their 2009 GDP. The U.S. is first at $14.25 T, followed by Japan at $5T with China a close third at $4.9 T. Lower on the list is Iran, at $330B. To our point, Egypt’s GDP is $217B. Also included in the same Post is the population of each country. This very bluntly, tells an interesting story–quite relevant to the current social unrest occurring in Egypt today.
The U.S. has a population of some 313M with a yearly per capita GDP of about $46,000. Two current examples of social unrest in the Middle East are Egypt and Iran. Both have populations of about 80M. Per capita GDP is approx. $2,770 and $4, 100 respectively. Yemen has a per capita GDP of $1,230 and Jordan’s is $4,400– however, in its Palestinian sector, fares much worse. We could go on about other parts of the world. But the truth: most of the world lives in poverty and yearns for a livelihood, freedom and government infrastructure stability.
In contrast, Kuwait’s per capita GDP is $54,000–no social unrest. Saudi Arabia’s per capita GDP is around $26,000–some social unrest. The relative correlation of per capita GDP to social unrest would be an interesting study and could conceivably be predictive (a priori) rather than reactive (posteriori) in the universe of geo-politics.
