Tag Archives: OECD
Last Friday, while the world concerned itself with matters such as the contents of a mobile telephone belonging to the courier of the deceased ‘CEO’ of Al Qaeda and the ‘second chance tickets‘ applications process for the 2012 Olympics, we at Mediolana were instead transfixed by a story run by that rarest of things, a newspaper of record: the Financial Times reported on the move of the International Energy Agency (‘IEA’) to release 60m barrels of oil from its emergency strategic stocks during July 2011 to compensate for the loss from the market of Libyan output since that nation’s descent into a surreal international war. The 60m barrels are to be supplied in the ratio of 50:30:20 by the US, Europe, and Japan and South Korea.
The International Energy Agency is made up of 28 member states, all of which also belong to the Organisation for Economic Co-operation and Development (‘OECD’), the elite grouping of the ‘traditional’ global economy which includes countries such as the United States, Japan, the United Kingdom, Germany and France; the measure detailed above is only the third occasion since the IEA’s 1974 inception that it has released oil, and the first since 1991.
The more prescient of our readers might already have realised why Mediolana is staring at this development in much the same way as dot-com investors gawped at the paper valuation of their shares during the course of 13th March 2000:
1. Libya’s contribution to the world oil market in ‘normal’ circumstances is less than 2%. Yet disruption in what should be a peripheral energy supplier has engendered the kind of response usually reserved for events of huge geopolitical and energy market significance, such as the First Gulf War. The IEA – and by logical extension, the OECD – must therefore be extraordinarily exposed to any sustained upward movement in oil prices.
2. Any instability in a country which is actually an important player in the global oil market – Saudi Arabia, for example, which was estimated in 2009 to hold 18% of all proven oil reserves – could shatter any contingency plans that the IEA has in place.
The recent unrest in the Middle East – which has thus far resulted in regime changes in Tunisia and Egypt – has prompted a catalogue of commentary on the role of social media in enabling mass uprisings in the region. Some eminent commentators have tended to minimise the part played by the ilk of Twitter and Facebook in these revolts: writing in the New Yorker, Malcolm Gladwell reminds us that despite the scarcity of landline connections in 1980s East Germany, demonstrations involving hundreds of thousands of people were not rendered an impossibility. Others, such as the increasingly omniscient tech deity Dennis Anderson, have emphasised how new information technologies and Web 2.0 tools are having a profound impact on political change.
While the jury is still out on the precise extent to which social media is facilitating dramatic expressions of popular dissent, there does seem to be an interesting pattern emerging with regard to the shutting down of communications services such as the Internet and mobile telephony by authoritarian states in the midst of serious social disruption: in both Tunisia and Egypt, severe restrictions on and/or total shutdowns of the Web and cellular phone networks marked the final days of the ancien régime. The Tunisian government doubled the number of blocked sites as cyberwarfare between the Tunisian Internet Agency (known by its French acronym, ATI) and dissident hackers ensued, while Egypt turned off the Internet and mobile telephone networks entirely for an extended period.
This appears to be especially significant for the following reasons:
1. The economic cost of such steps is high. A recent article by the Organisation for Economic Cooperation and Development (‘OECD’) estimates that the direct revenue losses from Egypt’s communications blackout were $18m per day, or 3-4% of GDP; the secondary effects, such as the impact on industries such as tourism and information technology are much harder to quantify – and in all likelihood, much deeper;
2. The social consequences, even in developing countries such as Tunisia and Egypt, are immense: nothing less than a grinding to a halt of normality. As of 2009, Egypt had over 55 million mobile telephone subscribers, or 66.7 subscribers per 100 inhabitants. Curbing a population’s freedom to communicate via mobile devices – many of which have Internet browsing facilities – in some senses means curtailing communication, period.
With the economic and social price of shuttering the Internet and mobile telephony clearly completely unsustainable, it is no exaggeration to state that if any government begins to implement measures of this kind, its shelf life is probably rather limited; in time, political scientists may come to recognise this as a new, extraordinary tipping point.