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February 22, 2011 at 09:17 AM
PIMCO CEO Mohamed El-Erian wrote in a Tuesday op-ed in The Financial Times that while global markets initially paid little attention to the unfolding events in Tunisia and Egypt, those countries have sparked a region-wide “tipping point” for change in the global economy that is beyond the control of Western nations.
El-Erian (left) pointed out that, although the two nations that saw the beginning of social unrest now spreading throughout the region were not significant players in the world economy, they have been “catalysts for a broader phenomenon of change that is gaining systemic importance.” He went on to cite two developments that he said were of particular importance “when it comes to global demand and price dynamics.”
First is the increase in oil prices because of the involvement of oil exporter Libya and the global response to greater supply uncertainty. Second is the change in dynamics, as demonstrations that were popular in Tunisia and Egypt gave way to violence in other Middle Eastern/North African (MENA) nations with governments responding to protests with force.
