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Financial crisis has flattened emerging markets
by Scott Gilbreath ~ October 28th, 2008
The financial crisis began in the United States, but the effects on markets in developing countries have been far more devastating than in the US. Asia Times columnist Spengler says that the long-term fallout will be terrible to behold and, if Obama is elected, America will just stand back and watch events unfold.
The financial crash exposes the fragility of large swaths of the world. The political consequences will be terrible. The worst of it is that America will not be around to moderate the melee, not if Democratic Senator Barack Obama is elected president, that is. Those who objected to America’s role as world policeman will get what they wanted, but they won’t like it: a religious war reaching from Lebanon to Pakistan, and Colombian-style narco-war spreading to Mexico and Brazil.
The wave of American self-pity that may carry Obama to the White House stems, in turn, from a global crisis that has sunk a good deal of the developing world. Worst affected are the most populous Muslim countries, and Russia’s “near abroad”. Pakistan, Ukraine and Belarus are out of funds and have applied for help to the International Monetary Fund. Indonesia and Turkey face drastically increased borrowing and import costs. Iran’s economy will implode with oil in the mid-US$60s.
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The economic crisis buoyed Obama out of his post-convention slump and exposed the emptiness of the Republicans. But it also has crushed the aspirations of the most populous Muslim countries. Even before the financial crisis, Pakistan and Turkey had turned towards political Islam. Pakistan’s intelligence service is providing support to the Taliban in Afghanistan, jeopardizing the Western position. The financial crisis will push Pakistan further towards radical Islam. Now this proclamation will be preached from every mosque from Tyre to Lahore: “The corrupt West tried to seduce you with consumerism. Now the poisoned gifts of the West are shown to be an illusion, and those of you who lusted after them are left only with your humiliation.”
Spengler predicts the Middle East from Lebanon to Pakistan will be engulfed by “a Shi’ite-Sunni version of Europe’s 17th-century Thirty Years’ War”.
Poor economic prospects also portend dangerous instability in Latin America, Eastern Europe, and Central Asia.
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October 30th, 2008 at 02:21 PM
[...] FINANCIAL CRISIS has flattened emerging markets; Financial bail-out becomes another public trough …. [...]