Do Higher Oil Prices Mean Poverty for Middle East?
It seems counter intuitive– how can higher oil prices possibly make oil rich countries like Saudi Arabia worse off? Well, these prices are certainly hurting the middle class. Today’s New York Times article is a must read on the subject: Here in Jordan, the cost of maintaining fuel subsidies amid the surge in prices forced the government to remove almost all the subsidies this month, sending the price of some fuels up 76 percent overnight. In a devastating domino effect, the cost of basic foods like eggs, potatoes and cucumbers doubled or more. In Saudi Arabia, where inflation had been virtually zero for a decade, it recently reached an official level of 6.5 percent, though unofficial estimates put it much higher. Public protests and boycotts have followed, and 19 prominent clerics posted an unusual statement on the Internet in December warning of a crisis that would cause “theft, cheating, armed robbery and resentment between rich and poor.” The inflation has many causes ranging from
