The “Arab Spring” and car markets in MENA and beyond

Originally published in 2011. this paper was updated and re=-published in 2017   “Progress lies not in enhancing what is, but in advancing toward what will be”, Kahlil Gibran Only a few wise birds predicted the Arab Spring and its financial and economic impact. But, as it progressed, it didn’t take long for the immediate impact of actual regime changes in Tunisia and Egypt – and the threat of them in Bahrain and Libya – to become clear. Between the day the protests broke out in Tunisia in January, the price of oil (Brent Crude) rose from US$94.90 on the 4 January to US$116 a barrel in early March, its highest level since January 2009 when it traded at $40. Still off its $145/barrel peak of July 2008 but already worryingly high for European motorists and hauliers. Of course, while European governments wring their hands about the impact of oil prices, keep in mind that their taxes on oil consumption far outstrip the income to the oil producers. For example, in 2011 at current prices, the UK will generate about 1.8 times as much tax as the oil costs. In Germany it’s twice as much and in Italy 2.4 times in tax as the oil costs! But, if the price for long-term stability is only a few months of excruciating pump prices, many consumers might be willing to pay it. However, as we have seen, the human and financial costs turned out to be more expensive and enduring than that. 

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