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Newsletter #288

October 19-25, 2008

What's New on SUSRIS

Update on Global and Local Financial Conditions - Oct 25 - Brad Bourland

"..Opec has indicated that if oil prices continue to slide it could meet again before its next scheduled meeting in December. Analysts will be watching how closely Opec members comply to their new quotas, as historically compliance has generally not been strong. We think there is a chance that oil prices will drop further as the deterioration in the outlook for demand has been accompanied by a reversal in speculative positions. It takes some time to physically lower oil production so it will be a few months before the real effect of the production cut back can be judged. Under the new agreement Saudi Arabia’s production quota was reduced by 466,000 barrels per day from 8.943 million barrels per day to 8.477 million barrels per day. Production has been persistently above quota over the last 12 months, though we understand that it had already been cut back over the last two months. Lower production combined with lower prices will impact negatively on economic performance. Nonetheless, we believe that the strong internal growth dynamics within Saudi Arabia means that economic performance will remain healthy.."  [more]

The Vulnerability of Arab Economies - Anouar Boukhars

"..The perfect financial storm now descending on the Middle East threatens to derail the economic ambitions of the oil rich Gulf states and wipe out the modest economic growth and progress witnessed in the non-oil producing areas of the region. Perhaps even more troubling, the crisis has exposed the vulnerability and inadequacy of the institutional foundations of Middle Eastern economies and raised serious questions about the economic judgment of the region's authoritarian leaders and their ability to weather the current financial tsunami.."  [more]

OPEC Slashes 1.5 MBPD from Production Ceiling

"..The Extraordinary Meeting having been convened in order to allow the Conference to discuss the current global financial crisis, the world economic situation and their impacts on the oil market, the Conference began by emphasizing that it shared the concern of the international community – of which OPEC Member Countries are an integral part – over ongoing developments in financial markets. The Conference observed that the financial crisis is already having a noticeable impact on the world economy, dampening the demand for energy, in general, and oil in particular. This slowdown in oil demand is serving to exacerbate the situation in a market which has been over-supplied with crude for some time, an observation which the Organization has been making since earlier this year. Moreover, forecasts indicate that the fall in demand will deepen, despite the approach of winter in the northern hemisphere.."   [more]

Needed: A New Vision of Inter-State Cooperation - Soli Ozel

"..The next decade will undoubtedly be a hectic one in the region. One does not have to be a genius to divine as much. The American-led war against Iraq both brought to an end a particular strategic balance that existed in the region since the modern Middle East was shaped and destroyed the social basis of political power in Iraq--with serious spillover effects elsewhere. In addition, the failure of that American enterprise, or at least the failure of its originally declared aims, combined with the unwise disinterest of the Bush administration in the moribund Middle East peace process, created a vacuum. As in all such cases, this vacuum is being filled by diverse regional actors.."    [more] 

Update on Global and Local Financial Conditions - Oct 22 - Brad Bourland

"..Oil prices have stabilized over the last few days (WTI is around $71 per barrel) as the markets wait to see what occurs at the Opec summit on Friday. It seems inevitable that Opec producers will agree to a cut in production. Ahead of the summit, figures of between one and three million barrels per day have been floated. Opec will be keen to put a floor on oil prices, which have halved since early July, but will not want to damage the exceptionally weak global economic outlook. Lower production for Saudi Arabia will reduce GDP growth and lower the budget and current account surpluses. However, it is important to consider that economic performance was very strong in 2007 when WTI averaged $72.3 per barrel and production was 8.7 million barrels per day; a potential scenario for next year.."
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Saudi Strategies to Counter Terrorism: The War of Ideas - Abdullah Ansary

"..The global war on terror - what have we learned?.. ..Obviously we have learned that countering terrorism requires coordinated multilateral efforts that go well beyond operations to capture or kill terrorist leaders. Fighting terrorists has become a "war of ideas." Terrorists have crafted and disseminated a compelling narrative that resonates with audiences around the world, expanding and energizing their ranks. Their "center of gravity" - their source of strength - are these ideas and their ability to spread them. Al-Qaeda propagates a message that combines dubious religious justifications with tales of an imaginary "Clash of Civilizations." Muslims around the world are told, by an impressive media infrastructure run by the terrorists that it is their individual religious duty to join the terrorists and take up arms in defense of Islam against the West. Military force alone will never beat this narrative and, in some cases, simply makes the problem worse. As long as this narrative can be effectively propagated, it will draw in new converts to the terrorists' radical ideology. Going on the offensive against terrorists requires attacking their center of gravity, their narrative.."   [more] 

In the News

Saudi king to attend UN interfaith dialogue

"..The ruler of conservative Saudi Arabia said he plans to attend a meeting at the United Nations next month to discuss his initiative to promote interfaith dialogue.. ..Abdullah has taken a leading role in bringing adherents of different sects and religions together. In the past few years, he has encouraged dialogue between the kingdom's Sunni majority and Shiite minority. Earlier this year, he brought together different Muslim sects for a meeting in the holy city of Mecca. In July, he presided over a gathering of Jews, Muslims, Christians, Hindus and Buddhists among other religions hosted by Spain.."  [more]

Saudi Arabia indicts 991 suspected Al Qaeda militants

"..Saudi Arabia has begun the judicial process for putting on trial nearly 1,000 suspected Al Qaeda militants accused of terrorist-related crimes dating back to 2003.. ..This is the first time the government has disclosed the number of defendants accused in connection with the wave of terrorist violence that hit the nation.. ..Prince Naif said that 90 civilians, both foreigners and Saudis, were killed in 30 violent operations between May 2003, when three residential compounds in Riyadh were targets of suicide bombers, and a foiled attack on an oil-processing plant in 2006. In addition, 74 members of Saudi security forces died as a result of the violent campaign of "Al Qaeda in the Arabian Peninsula," as the extremist movement here called itself, according to the official statement carrying Prince Naif's remarks.  [more]

Israel Considering Saudi Peace Plan

"..Israeli leaders are seriously considering a dormant Saudi plan offering a comprehensive peace between Israel and the Arab world in exchange for lands captured during the 1967 war, Defense Minister Ehud Barak said Sunday. Barak said it may be time to pursue an overall peace deal for the region since individual negotiations with Syria and the Palestinians have made little progress. Barak said he has discussed the Saudi plan with Prime Minister-designate Tzipi Livni, who is in the process of forming a new Israeli government, and that Israel is considering a response. Saudi Arabia first proposed the peace initiative in 2002, offering pan-Arab recognition of Israel in exchange for Israel's withdrawal from Arab lands captured in 1967 - the West Bank, Gaza Strip, east Jerusalem and the Golan Heights.."   [more] 

Saudi Arabia, citing security, delays Iraq embassy

"..Saudi Arabia said Tuesday it would delay sending an ambassador to Baghdad, saying there was no point sending a diplomat who would end up forced to remain inside a "fortress" to stay safe. Several of Iraq's mainly Sunni neighbors have sought over the last year to restore ties damaged by Saddam Hussein's rule and the U.S.-led invasion, as violence in Iraq has declined. But Saudi Arabia is hoping for further security improvements before it posts an ambassador to Baghdad.."  [more] 

Calendar

[details]

Middle East Institute 62nd Annual Conference
"US Middle East Policy: Pathways to Renewal"
November 20-21, 2008
Washington, DC

[details]

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