The Global Economy in Turbulent Times

CHAPTER 12 A Check-up at Mid-Year, 2011¹

My early 2011 essays in The Star were set in a rather optimistic mood, hoping it would be a stress-free year for the world economy. Early in January, the financial crisis seemed to be well contained and the euro sovereign-debt crisis had become less acute. The US economy was poised to be better able to tackle unemployment. Investors began building up their equities and sold some bonds they had bought as cover for troubled times. The main worry, then, was to await progress by the major emerging countries in slowing down growth, which otherwise was pushing commodity prices further up. But that was not to be.

MENA Jasmine Revolution

First, came the Arab Spring. Few would have imagined that among the many Middle East and North Africa (MENA) unpopular governments, Tunisia would be the first to face a serious attempt to foment an Eastern European–style velvet revolution. Since December 17 last year, when a jobless youth set himself on fire in protest, spontaneous reactions spread nationwide. On January 11, protests in Tunis galvanized near-moribund opposition into action, bringing about the president of 23 years’ dramatic scuttle into exile on January 14. Some Egyptians jokingly called it a Tunami.

Unexpectedly, a Tunisia-tinted jasmine revolution tidal wave soon hit Egypt. The nationwide protest on January 25 turned out to be the largest act of civil disobedience in 30 years of President Mubarak’s rule. Mubarak was eventually toppled on ...