Saudi arabias king abdullah announced a 35bn package

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Unformatted text preview: ation Council to create local defenses, and for US strategic cooperation with the Southern Gulf states. It plays a critical role as a counterbalance to a radical and more aggressive Iran, it is the source of the Arab League plan for a peace with Israel, and it has become a key partner in the war on terrorism. The US strategic posture in the Middle East depends on Saudi Arabia having a friendly and moderate regime. 101 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Stability – Oil Shocks – Economy 102 Oil DDW 2012 1 Saudi instability collapses global economy – Oil shocks and reverses confidence The Guardian, 11 The Guardian, 2-27-11, [“Still-fragile world economy braced for effects of another oil shock,” Heather Stewart, http://www.guardian.co.uk/business/2011/feb/27/world-economy-braced-for-oil-shock] At the same time, some analysts are pointing out that it is important not to rule out more extreme scenarios in the Middle East in the months ahead. Saudi Arabia's King Abdullah announced a $35bn package of handouts to calm his restive nation last week, including the introduction of unemployment benefit for the first time. Most experts believe Saudi Arabia is stable, but many would have said that about Egypt, Tunisia and Libya even a few months ago. Saudi supplies can easily offset the shortage of oil production from Libya; but if the chaos spreads to Riyadh, all bets are off. Kidd adds that even without a revolution on the streets of Saudi Arabia, some other scenario could hit the world economy by shattering confidence: the oil shock could be compounded by another, unexpected and unrelated, event bursting into the markets' consciousness – a renewed fiscal crisis in Spain, for example. That could send markets spiralling downwards, by shattering the sanguine world-view of many investors and causing confidence to collapse. 103 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Economic collapse causes global nuclear war Merlini, nonresident senior fellow at the Center on the United States and Europe, 11 Cesare Merlini, nonresident senior fellow at the Center on the United States and Europe, chairman of the Board of Trustees of the Italian Institute for International Affairs (IAI) in Rome, expert in transatlantic relations, European integration and nuclear non-proliferation, with particular focus on nuclear science and technology, April–May 2011, “A Post-Secular World?,” Survival, vol. 53 no. 2, pp. 124, http://www.brookings.edu/~/media/Files/rc/articles/2011/04_international_relations_merlini/04_international_relations_mer lini.pdf Two neatly opposed scenarios for the future of the world order illustrate the range of possibilities, albeit at the risk of oversimplification. The first scenario entails the premature crumbling of the post-Westphalian system. One or more of the acute tensions apparent today evolves into an open and traditional conflict between states, perhaps even involving the use of nuclear weapons. The crisis might be triggered by a collapse of the global economic and financial system, the vulnerability of which we have just experienced, and the prospect of a second Great Depression, with consequences for peace and dem...
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This note was uploaded on 01/30/2013 for the course ECON 101 taught by Professor Burke during the Spring '13 term at Southern Arkansas University.

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